Juliane Schwarz and Fumi Kitagawa discuss the ever-changing landscape of business support, and what role Universities can play.
This article was written for the Birmingham Economic Review.
The review is produced by City-REDI / WMREDI, the University of Birmingham and the Greater Birmingham Chambers of Commerce. It is an in-depth exploration of the economy of England’s second city and a high-quality resource for informing research, policy and investment decisions.
Challenges for businesses and business support have been long recognised and particularly pertinent at the present time. Business scale-up and growth, not to mention survival, depend on their capability to tackle and solve problems in different phases including production, business processes and development, as well as managing supply chain relationships.
For businesses to gain a competitive advantage, diverse forms of knowledge are necessary, but it is not always easy for businesses, particularly for Small and Medium Enterprises (SMEs) to access the state-of-the-art technology, knowledge or skills they require. This is where public and private business support could make a big difference.
This article provides an overview of recent changes in the local governance structures affecting business support provision and discusses challenges as well as opportunities for businesses and business support in the Greater Birmingham and the West Midlands Combined Authority areas. We identify strengths and a variety of forms of business support offered by regional universities and highlight growing regional collaboration opportunities within the emerging business support landscapes.
Evolution of Business Support Landscapes and Current Challenges
Over the last two decades, a variety of forms of business support mechanisms have evolved. In the mid-2000s, with an increasing ‘devolution of business support to the regional level’, business support functions of Business Links were transferred to the Regional Development Agencies (RDAs). After the Coalition Government came to office in 2010, the abolition of RDAs meant the end of funding to many of the regional business support mechanisms. Advantage West Midlands (AWM), the RDA for the West Midlands, was closed, and the Greater Birmingham & Solihull Local Enterprise Partnership (GBSLEP) was created in 2011 as one of 38 Local Enterprise Partnerships (LEPs). Across England, Growth Hubs led by LEPs were put in place to be the centre of local business support mechanisms providing practical support and guidance to local employers and businesses.
The GBSLEP Growth Hub was created as part of the GBSLEP, part-funded by the Department for Business, Energy & Industrial Strategy (BEIS), and the European Regional Development Fund (ERDF) as ‘a central point of contact for free business advice and guidance for small and medium businesses across the Greater Birmingham and Solihull region’.
The West Midlands Combined Authority (WMCA) was set up in 2016. The WMCA area includes 18 local councils and 3 LEPs (Black Country LEP and Coventry and Warwickshire LEP in addition to GBSLEP). In 2022, along with the Levelling Up White Paper, as the government withdrew its commitment to LEPs, their functions would be integrated into the WMCA.
This means, local business support structures are being re-structured and relationships have to be newly (re)built when businesses are struggling with a multitude of crises including the Brexit fallout, the pandemic, the war in Ukraine, and the energy and cost of living crisis.
New developments – Innovation Accelerators and role of universities
In the West Midlands, a new business support landscape emerging. Businesses across the West Midlands can now get advice on funding and growing their companies through Business Growth West Midlands, the newly established business support service. It is funded by a £42 million investment from the UK Shared Prosperity Fund (UKSPF).
The Levelling Up White Paper published in February 2022 opened up further devolution opportunities and new collaborative opportunities for businesses in the WMCA area including the West Midland Innovation Accelerator.
Innovation Accelerators were first mentioned in the Levelling Up White Paper. The WMCA, the Greater Manchester Combined Authority and the Glasgow City Region were chosen to host one of the three pilot regional Innovation Accelerators each. They are funded through a share of a £100m fund from Innovate UK over the next two years. The West Midlands Innovation Accelerator Programme led by the WMCA aims to improve capability and capacity for innovation.
Projects within the West Midlands Innovation Accelerator focus on specific clusters identified in the West Midlands Plan for Growth. It aims to support businesses to develop new products, processes and services in CleanTech, HealthTech and MedTech. It is noteworthy that universities in the region play a central part by leading individual projects, partnering and delivering key elements of the accelerators.
- The University of Birmingham leads the 6D Innovation Accelerator to support innovation in health and medical technologies and to increase the speed at which research is translated into products and processes that can be used by the NHS.
- Coventry University together with the Black Country Innovation Manufacturing Organisation are partners in Clean Futures led by the Connected Places Catapult and delivers their accelerator programme. Clean Futures aims to support transport manufacturing supply chains in the West Midlands in transition to clean-tech solutions.
- Aston University leads Biochar CleanTech accelerator. It supports the development and production of low-carbon products to target export contracts worth £200m.
- Aston University, Birmingham City University, the University of Birmingham together with Birmingham City Council, and Greater Birmingham Chamber of Commerce are partners for the Digital Innovation Transformative Change (DIATOMIC) accelerator led by the Connected Places Catapult. DIATOMIC aims to improve the management of housing, parks and waste for Birmingham City Council, better engagement with citizens and training of service delivery teams.
Conclusion – challenges and opportunities
The business support landscape in the West Midlands, as within England, has been changing and in a state of flux during a turbulent and highly disruptive time for businesses. Public investments, such as UKSPF and Innovation Accelerator aim to leverage private investment, however, sustainability of funding is rather short-term and not as secure as the European funding (e.g., ERDF) used to be.
New opportunities are also emerging as exemplified by the West Midlands Innovation Accelerator programme with growing collaborative mechanisms across public and private sectors. A variety of factors including universities and intermediary organisations (e.g., Catapult Centres) are engaged in business support, recognising the importance of place-based approaches to the business needs and potentials. There seems to be a momentum for universities in the region to work collaboratively drawing on complementary capabilities and strengths. However, while regional collaboration is growing, there is an inherent tension – universities are competing with each other for research funding, student markets and business engagement, which might undermine regional collaborative approaches.
To realise sustainable regional advantage in the long term, strategic alignment between various actors is required. For instance, universities need to be part of industrial policy – by combining sector-specific expertise with place-based approaches and coordination. Business support available at the universities in the region needs to be better publicised for businesses, particularly SMEs. Universities can work more closely with public sector partners to better understand local needs.
One of the key challenges for business support is to understand diverse firms’ needs and identify appropriate interventions for specific types of firms. One size does not fit all, while it is important to build trust and working relationships across business, government and academia.
As a professor active in business engagement and support critically points out: “Longevity, consistency, and resources are all important” for business support.
This blog was written by Dr Juliane Schwarz, Research Fellow and Professor Fumi Kitagawa, City REDI, University of Birmingham.
Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI / WMREDI or the University of Birmingham.