Role: Associate Director
Date: 20th December 2017
It is difficult to know what to make of the statements about growth hubs in the Industrial Strategy. After a challenging few years for the business support world, it’s great to see the words ‘continued funding’ used with reference to any business support policy. I was really pleased to see this commitment to growth hubs in the Industrial Strategy but as I’ve reflected on the statements and looked again at the wording I’m left feeling a little unclear about what this could mean in practice.
Anyone involved with the growth hub agenda will know that they have a pretty tough brief. When growth hubs were established they were asked to do a range of things to help improve the coordination and delivery of business support:
The challenges that growth hubs face
Despite these wide-reaching expectations, the steer from government on which areas growth hubs should focus on and how they should seek to address these challenges was unclear. In theory, this flexibility provides an opportunity for LEPs to tailor their respective growth hubs to respond to local needs. Yet, in practice this was often hampered by the funding available.
Core funding has been limited and often short-term. This has made it difficult to develop the strong local presence needed to influence the coordination and delivery of services. To counter this, many growth hubs sought to boost their resources with ERDF or RGF. This helped strengthen their local presence but meant that they needed to manage and deliver their own services at the same time as working to coordinate and influence services provided by others.
This has been a difficult balance to strike, particularly in areas where the business support landscape is already crowded. By setting up yet more services, some growth hubs have been seen to add to the problem they were asked to solve.
The situation has been exacerbated in some areas by the targets such as businesses assisted and jobs created that come with ERDF/RGF funding. The 3 hour assist in the current ERDF programme has helped but many growth hubs have still found themselves needing to deliver a lot of more intensive assists. Without careful management, these targets can disincentive the referral activity which is so important to a growth hub’s coordinating role. It is easy to see how competition between services can emerge in a crowded business support landscape where funded services have targets to meet. Competition gets in the way of coordination and undermines good-will between providers. More importantly, it makes it more difficult for businesses to access the right support and it can act against the public sector’s efforts to stimulate and engage with the commercial business support market.
What will the future role of growth hubs be?
All of these factors have made it difficult for some growth hubs to make headway as influencers and coordinators of support. But, looking on the bright side, the delivery-focused growth hubs have generally achieved a good level of penetration into their local business bases. This could turn out to be a key platform on which to deliver elements of the Industrial Strategy, in the coming years.
BEIS want to work with and improve the performance of the long tail of lower productivity firms. Growth hubs are well positioned to offer access to and insight about these businesses, their support needs and how best to engage with them. It isn’t entirely clear whether this is what BEIS have in mind. I would hope that the planned review of business support will provide some clarity on:
SMEs play a crucial role in the UK economy and the Industrial Strategy rightly highlights the importance of effective business support in maximising their performance. I just hope the proposed review will set out a clear plan for how growth hubs can make a meaningful to contribution.
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