eoincostello

The proposed new Local Enterprise Offices must be innovative in the services they will provide

In My views on February 23, 2012 at 8:20 am

Last week’s Jobs Action Plan included a plan for setting up of a new “One Stop Shops” for Micro Enterprise in the Local Authorities in place of the Local County/ City Enterprise Boards.

My views in respect of the structure of the proposed Local Enterprise Offices (LEO)

From my experience of mentoring startups perceptions are key, the perception of confidentiality, independence and impartiality is of the utmost importance. A key strength of the County Enterprise Board structure is autonomy, flexibility in response to local needs and the trusted advisory function of the board of directors(which gives the Boards the ability to tap into local knowledge and energies). These are core values that need to remain in place within the proposed LEO structure.

While the detail of the proposed entity structure for LEOs is not clear any step that involves the loss of the involvement of hundreds of locally-based  business people, and others, that  participate on a voluntary basis in the work of CEB Boards and Evaluation Committees, should be avoided.

Potential conflicts of interest: While completing my Dissertation I interviewed a number of local authorities. They referred to the fact that if those paying commercial rates see any support/preferment  by the County Council of individual SMEs (that have the potential to compete with them) there is a significant backlash. While CEBs currently observe the requirement to avoid displacement as much as possible it can be a fact of life in supporting the growth of innovative micro-enterprises.

The One Stop Shop has to be about focussing expertise where it can have most impact

In speaking to contacts in the enterprise support sector the introducation of the “One Stop Shop” concept is generally welcomed and the associated expectation of joined up thinking on enterprise and innovation is also welcomed. However the “One Stop Shop” policy does has potential downsides, namely dilution of expertise and focus. While attending the annual conference of a prominent EU enterprise support agency last year, I attended a debate on whether the agency should move from its stated policy of being a “One Stop Shop” to specialisation in prioritised sectors and activities. Speakers felt that the “One Stop Shop” policy had stretched resources too thinly and prevented in depth specialisms developing within the agency.

What services should the Local Enterprise Offices offer?

Resource limitations may force the proposed “One Stop Shops” to make a decision on operational specialisation (for example becomming specialised in offering advice and referrals as opposed to filtering applications from start-ups for grant supports). While the overall level of start-ups in Ireland is in line with the norms of economies we wish to emulate, the quality and sustainability of many of these is questionable and could be improved. In talking to my mentees they receive ample supports when on the incubation programmes but at the end of the programme are somewhat cut loose. Unless they fit into Enterprise Ireland’s pre High Potential Start up support programme the roadmap for their growth is not defined.

Indeed perhaps current policy is excessively focussed on the startup phase as opposed to the development phase of micro businesses. While the “Action Plan for Jobs” identifies “Better support for indigenous companies to improve their performance” as a priority it cites the Enterprise Ireland Lean programme as catering for this priority. However this programme is limited to current EI clients and quite specific in its application.

In contrast to when the CEBs came into existence, Ireland now has an infrastructure of  approximately 22 Incubation Centres located in strategic locations around Ireland. They provide considerable specialisation in terms of start up support.

Due to the focus of many CEBs resources on startups they often don’t have sufficient time or resources to focus on the business development aspect of their mandate. Arguably more “winners” in terms of employment will emerge from the support of sustainable early phase businesses as opposed to startups. However the provision of specialised business development supports are sparse in the Irish enterprise support landscape.

Therefore one could argue that specialisation should take place where the start up support mandate of Incubation Centres is broadened to the task of identifying sustainable, high growth potential startups from those referred to them by the LEOs. This would enable the LEOs to develop strength in capacity building/development of micro-businesses providing Ireland with a cohort of growth businesses capable of creating sustainable jobs. From my research I believe that the specific programme that could best aid LEOs in this objective would be the creation of a national Business Development & Innovation coaching programme.  

The opportunity should not be missed for LEOs to add value to the Irish enterprise and innovation ecosystem

Any new services facilitated by the LEOs must be about sustainable job creation irrespective of whether they are in prioritised sectors or not. In speaking to one SME owner recently (emplying 10 staff) she felt that the policy of “If you are not in certain sectors or exporting we are not interested in you” is a big challenge for her business.

The link between expert interventions in the area of small business development and innovation and sustainable growth is widely accepted. When I was working on a national project with the Enterprise Europe Network last year for DG Enterprise our goal was to identify the obstacles that prevent Irish SMEs from engaging in innovation.

Of the 33 individual recommendations that arose from our focus groups 14 concerned a need for a role best summarised as a “Business Development & Innovation Coach” and 8 concerned the lack of education provided to SMEs development of their businesses and innovation. Commercial business development & innovation consultants are too expensive for the majority of small businesses therefore there is a market failure in this space which the proposed LEOs could productively address in the national interest.

 How would it work: An outline of the role of Business Development & Innovation Coach

The objective of such a programme offered by the proposed LEOs would be to seek to engage as many companies as possible in the the sustainable development of their business and engagement in the discipline of innovation from an early stage. The coach would need to be a practitioner themselves as opposed to an advisor. The individual actions that the BDI coach would undertake under this programme would include:

  1. Get the message across to SMEs that innovation is not necessarily technology/R&D intensive. SMEs need to understand that innovation embraces a while spectrum of activities such as knowledge management, product design, management practices etc. Innovation that has an impact on their profitability can take place in any aspect of their business.
  2. SMEs want practical solutions that will contribute immediately. Many SMEs are  constantly told “In business you need to keep re-inventing yourself” however support in approaching this challenge in a structured way is lacking. The trained BDI coach would agree with the client which tools from the spectrum of BDI tools and applications now available would have the potential to have the most impact in the short term in the cleint business. The Coach would follow up over a period of months via virtual meetings on Skype (to save the “time poor” owner manager travelling time) to ensure that these tools become embedded in day to day work practices of the client.
  3. The programme would be available across the spectrum from post Incubation Centre start ups to non EI companies up to 50 staff. The key criteria is are they sustainable rather than the sector they occupy.
  4. The BDI coach would be familiar with the complete range of relevant supports across all the agencies and could help the client engage with the supporting agencies and get going successfully with relevant innovation within their businesses.
  5. The coach would be outcomes focussed. A key performance indicator for each BDI coach would be how many successful SME BDI case studies they generate per annum. This will help provide evidence to Ireland’s SME base that business development works and that innovation doesn’t have to be risky.

And finally, innovation in provision of services at LEOs

 When established in 1993 the CEBs involved two significant innovations, the formalisation of supports to micro-enterprise and a concommitant relaxation of the previous mainstream industrial policy emphasis on manufacturing and internationally-traded services in respect of these micro-enterprises.

In my opinion the introduction of LEOs must involve a simliar commitment to innovation in provision. This can be achieved through the introduction of a national programme of Business Development & Innovation Coaches interventions. There is a good case from a national competitiveness perspective to ensure that all small and micro-enterprise in Ireland receive training and coaching in professional business development practice and engage in continual improvement and innovation.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: