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Economic Impact Study of Business Link Local Service

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Economic Impact Study of Business Link Local Service Economic Impact Study of Business Link Local Service Economic Impact Study of Business Link Local Service URN 07/1169 Final Report ASTON BUSINESS SCHOOL University of Warwick, Aston Business School and Kingston University 1 Economic Impact Study of Business Link Local Service CONTENTS Page Acknowledgements 8 Glossary 9 Executive Summary 10 1. Evaluation Framework and Approach 1.1. The Evolution of Business Support in the UK 21 1.2. Business Link Implementation Issues 22 1.2.1. Brokerage Model in Action 24 1.3. Business Link Programme Objectives 25 1.4. Design of the Economic Impact Study 31 1.4.1. Analytical Approach to the Derivation of Value for Money 32 (VfM) Estimate 1.4.2. National VfM Estimates 32 1.4.3. Qualitative Views of Business Link Impact 33 1.4.4. Evaluation of Alternative Brokerage Models 34 1.4.5. Regional Benchmark Analysis 34 1.5. Structure of Report 34 2. Sample Characteristics 2.1. Introduction 36 2.2. Sample Confirmation and Contamination 36 2.3. Respondent Profile 37 2.4. Business Characteristics 40 2.5. Strategic Direction 45 2.6. Partners, Directors and the Background of the Business Leader 46 2.7. Main Partner/Managing Director 47 3. Nature Of Business Link Support and Business Performance 3.1. Profiling Business Link Support 50 3.2. Other External Business Assistance and Support 54 3.3. Firm Size and Performance 55 3.4. Summary 56 4. Assessing the Impact of Business Link 4.1. Introduction 58 4.2. Impact of Business Link Assistance 59 4.3. Perceived Impact of Business Link Assistance 70 4.4. Assessing the Economy-wide Impact of Business Link Assistance 73 4.5. Costs of Business Link 76 4.6. Displacement Issues 77 4.7. Summary 79 University of Warwick, Aston Business School and Kingston University 2 Economic Impact Study of Business Link Local Service 5. The Effectiveness of Alternative BLO Delivery Models 5.1. Introduction 80 5.2. Previous Categorisations of BLOs 80 5.3. Bennett-Robson (B-R) Classification 81 5.3.1. Support Service Profile 82 5.3.2. Impact of BLO Services 84 5.4. Mole Classification 87 5.4.1. The Information, Diagnostics and Brokerage (IDB) Model 88 5.4.2. Four Models of BLOs 90 5.4.3. Operationalising the Models 91 5.4.4. Support Service Profile 98 5.4.5. Impact of BLO Services 100 5.5. Summary 103 6. Impact of Business Link Assistance: Evidence from the Face-to- Face Interviews 6.1. Introduction 106 6.2. Developing the Topic Guides 107 6.3. Case Study Selection 108 6.4. Intensively-Assisted Firms 111 6.4.1. Contact with Business Link 112 6.4.2. Nature and Delivery of Assistance 113 6.4.3. Impact on the Business 117 6.5. Other-Assisted Firms 120 6.6. Summary 122 7. Developing a Spatial Perspective on the Business Link Local Service 7.1. Introduction 124 7.2. Regional Baselines 124 7.2.1. The Age Characteristics of Respondent Firms 124 7.2.2. The Legal Status of Respondent Firms 128 7.2.3. Regional Differences in the Sectoral Composition of 130 Respondent Firms 7.2.4. Regional Differences in the Strategic Priorities of 132 Respondent Firm 7.2.5. Regional Differences in Diversity, Director Numbers and 135 Firm Size 7.3. A Rural Perspective 138 7.3.1. Firm Size and Performance 138 7.3.2. Perceived Impact of Business Link by Rural Area 142 7.4. Summary 146 University of Warwick, Aston Business School and Kingston University 3 Economic Impact Study of Business Link Local Service 8. Conclusions and Discussion 8.1. Introduction 148 8.2. Value for Money 148 8.3. Comparisons with Previous Studies 149 8.3.1. PACEC (1998) 149 8.3.2. Business Link Tracker Study (2001) 150 8.4. Business Link Delivery Models 152 8.5. Sub-National Issues 154 8.6. Methodological Critique 157 References 158 Appendices 161 Appendix A Telephone Survey Questionnaire 162 Appendix B Weighting Protocols 201 Appendix C Face-to-Face Interview Topic Guide 203 Appendix D Additional Estimation Results Excluding Selection Effects 209 Appendix E Excerpt from Conference Paper on Correlates with Impact 215 University of Warwick, Aston Business School and Kingston University 4 Economic Impact Study of Business Link Local Service List of Figures Page Figure ES.1 Business Link Operator Models and Impact 18 Figure 1.1 Programme Theory for Business Links 28 Figure 1.2 Study Overview and Structure 31 Figure 5.1 Models of Business Link Operators: Intensity of intensive assistance 91 and the proportion of firms intensively assisted. Figure 7.1 Satisfaction with BL Service by Assisted Group and Rural Area 144 List of Tables Table 1.1 A Rationale for Business Link 23 Table 1.2 Business Link Outcomes and Impacts 27 Table 2.1 Respondents’ Position within the business – Selected Categories 39 Table 2.2 Age Distribution of Respondent Groups: All Firms 40 Table 2.2a Age Distribution of Respondent Groups: Rural Dispersed Settlements 41 Table 2.3 Legal Status of Respondent Firms: All Firms 42 Table 2.3a Legal Status of Respondent Firms: Rural Dispersed Settlements 42 Table 2.4 Sectoral Composition of Respondent Firms 44 Table 2.5 Strategic Priorities of Respondent Firms: All Firms 45 Table 2.5 Strategic Priorities of Respondent Firms: Rural Dispersed Settlements 45 Table 2.6 Partners and Directors, Ethnic and Gender Diversity 46 Table 2.7 Highest Qualification of Owner-Managers: All Firms 48 Table 2.7a Highest Qualification of Owner-Managers: Rural Dispersed 48 Settlements Table 2.8 Age Distribution of Owner-Managers: All Firms 48 Table 2.8a Age Distribution of Owner-Managers: Rural Dispersed Settlements 49 Table 3.1 Frequency Distribution of Contacts between Intensively-assisted firms 51 and Other-assisted firms and Business Links Table 3.2 Intensity of Assistance Received by Intensively-assisted firms and 52 Other-assisted firms Table 3.3 Proportions of Intensively-Assisted Firms and Other-Assisted Firms 52 Receiving Different Types of BL Services Table 3.4 Satisfaction with BL Services among Intensively-assisted firms and 53 Other-assisted firms Table 3.5 Individual Sources of Business Advice and Assistance 54 Table 3.6 Firm Size Distributions: Sales and Employment 55 Table 3.7 Performance Indicators: Sales and Employment Growth, Sales per 56 Employee Table 4.1 Probit Models of the Probability of Receiving Intensive Assistance 61 University of Warwick, Aston Business School and Kingston University 5 Economic Impact Study of Business Link Local Service Table 4.2 Probit Models of the Probability of Receiving Other Assistance 62 Table 4.3 Impact of Intensive Assistance: Full Model 66 Table 4.4 Impact of Other Assistance: Full Model 67 Table 4.5 Impact of Intensive Assistance: Restricted Models 68 Table 4.6 Impact of Other Assistance: Restricted Models 69 Table 4.7 Assisted Firms’ Perceptions of the Impact of Business Link Services 71 Table 4.8 Time Horizons for Experiencing the Benefits of BL Assistance 72 Table 4.9 Additionality of Business Link Assistance 73 Table 4.10 National Impact Estimates for Business Links 75 Table 4.11 Income of 43 Business Link Organisations: 2003 76 Table 5.1 Profiles of Intensive Assistance: by Bennett-Robson Typology 83 Table 5.2 Profiles of Other Assistance: by Bennett-Robson Typology 84 Table 5.3 Perceived Impact of BL Services: Intensively-Assisted Firms 85 Table 5.4 Perceived Impact of BL Services: Other-Assisted Firms 86 Table 5.5 Impact Coefficients in Regression Models of Employment, Sales & 87 Productivity Growth Table 5.6 BLO Delivery Models and their Operating Environment 91 Table 5.7 Operationalising the BLO Models 92 Table 5.8 Number of Firms per Accountant in each Business Link Area 93 Table 5.9 Performance Monitoring Descriptive Statistics 94 Table 5.10 Intensity of Help - BLO clusters 95 Table 5.11 Proportionate Intensive Rate - Descriptive Statistics 96 Table 5.12 Proportionate Intensive Rate – Cluster Analysis 96 Table 5.13 Four Models of Business Link Assistance and BLOs Organisations 97 Table 5.14 Significant Correlations between Income and Intensity 98 Table 5.15 Profiles of Intensive Assistance: By Mole Typology 99 Table 5.16 Profiles of Other Assistance: By Mole Typology 100 Table 5.17 Perceived Impact of BL Services: Intensively-Assisted Firms 101 Table 5.18 Perceived Impact of BL Services: Other-Assisted Firms 102 Table 5.19 Impact Coefficients in Regression Models of Employment, Sales and 103 Productivity Growth: Mole Typology Table 6.1 Sample Derivation from Telephone Survey 106 Table 6.2 Type of Assistance by BLO 110 Table 6.3 Business Link Model by Urban/Rural Area 110 Table 6.4 Industrial Sector by Employment Size 110 Table 7.1 Age of Firms by Region and Type 126 Table 7.2 Owner Age by Region and Type 127 Table 7.3 Legal Status of Firms by Region and Type 129 Table 7.4 Test Statistics: Sectoral Composition by Region and Type 130 Table 7.5 Sectoral Composition by Region and Type 131 Table 7.6 Proportion of Firms with a Given Strategic Priority: by Region and 133 Type University of Warwick, Aston Business School and Kingston University 6 Economic Impact Study of Business Link Local Service Table 7.7 Test Statistics for Regional Differences in Strategic Priorities 134 Table 7.8 Average Firm Characteristics: By Region and Type 136 Table 7.9 Test Statistics for Regional Variation in Firm Characteristics 137 Table 7.10 Assisted Status by Urban/Rural Classification 138 Table 7.11 Urban-Rural Firm Size Contrasts 139 Table 7.12 Urban-Rural Performance Contrasts 141 Table 7.13 Proportions of Intensively-Assisted Firms receiving Different Types of 143 BL Services By Rural Area Table 7.14 Time Horizons for Experiencing the Benefits of BL 145 Assistance by Rural Area Table 7.15 Additionality of BL Assistance by Rural Area 146 University of Warwick, Aston Business School and Kingston University 7 Economic Impact Study of Business Link Local Service Acknowledgements The research team would like to thank all the members of the Steering Group who provided invaluable inputs into the various stages of this evaluation study, and to those who commented on earlier drafts of this report and advised the project: Prof.
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