The government's review of sub-national economic development and regeneration: key issues

We are now in the midst of another concerted attempt by Government to make sense of and tidy up the sub-national governance of economic development and regeneration. This is a challenging task made all the more difficult by being undertaken in a UK context following a period of uneven devolutionary change and cross-cut by new and existing scales of institutions and spatial policies at the sub-regional, city-regional, regional and pan-regional levels as well as the economic slowdown. The current endeavour has taken the form of the Review of Sub-National Economic Development and Regeneration led by HM Treasury, Department for Business, Enterprise and Regulatory Reform and the Communities and Local Government department and the consultation Prosperous Places: Taking Forward the Review of Sub National Economic Development and Regeneration (hereafter SNR). We recognise that SNR is emergent 'policy-in-the-making', containing some potentially radical steps for government across a range of geographical levels, and represents a laudable attempt to establish a clearer framework replete with challenging opportunities for RDAs, local authorities and other existing and emergent spatial institutions. Our purpose here is to raise some key issues for debate and reflection as part of the process of addressing sub-national economic development and regeneration policy and governance

Determinants of voluntary audit and voluntary full accounts in micro- and non-micro small companies in the UK

This is an Author's Accepted Manuscript of an article published in Accounting and Business Research, 42(4), 441 - 468, 2012, copyright Taylor & Francis, available online at: http://www.tandfonline.com/10.1080/00014788.2012.667969.This study investigates the link between the auditing and filing choices made by a sample of 592 small private companies, which includes 419 micro-companies. It examines decisions made in connection with the 2006 accounts following UK's adoption of the maximum EU size thresholds in 2004, and the impact of the proposed Directive on the annual accounts of micro-companies. The research extends the model of cost, management and agency factors associated with voluntary audit, and develops a complementary model for voluntary full accounts. The results show the benefits of placing full audited accounts on public record that outweigh the costs for a significant proportion of companies. In non-micro small companies, voluntary audit is determined by cost and agency factors, whereas in micro-companies it is driven by cost, management and agency factors. In both groups, the predictors of voluntary full accounts include management and agency factors, and choosing voluntary audit is one of the key factors. The study provides models that can be tested in other jurisdictions to provide evidence of the needs of micro-companies, and the discussion of the methodological challenges for small company researchers in the UK makes further contribution to the literature

Regional construction sector: sector implementation plan (SIP)

This Sector Implementation Plan (SIP) forms an integral part of the Regional Economic Strategy (RES), acting as a high level plan for the region’s construction sector, and providing an overview of the strategic actions and interventions which will deliver the outcomes required to achieve progress against each key challenge

Manufacturing in Scotland

Set against the backdrop of current thinking that UK manufacturing needs to move into higher value, this report, commissioned on behalf of the Scottish Manufacturing Advisory Service (SMAS) Board, set out to: Give an account of the current status of manufacturing SME’s in Scotland including current activities, aspirations, strategies and challenges facing them; Assess the progress Scotland has made towards high value manufacturing; Make recommendations as to the type of support needed to enable Scottish manufacturing SMEs invest in their long-term future. The resulting report is based on findings of a survey that delivered responses from 435 Scottish manufacturing companies and in-depth interviews with directors of 45 companies. This research was carried out during the period April to September 2008. Our research suggests that there have been significant shifts within manufacturing SMEs in Scotland. The most notable shifts include: A shift in the basis of competition. Our research suggests that the primary basis of competition for Scottish manufacturing SMEs is not price. Increasingly Scottish SMEs are adding value through quality and customer service. A shift in the nature and scope of operations. Whilst the primary business function of manufacturing companies remains production, there is evidence of increasing levels of design and service activity taking place. Companies reported they expected this trend to continue as the shift in the basis of competition away from price towards innovation and customer service gains pace. These changes suggest a move towards high value manufacturing. However there are major challenges facing Scottish SMEs if they are to compete on new value propositions. Of particular concern are: Lack of strategic vision and understanding of the capabilities and competencies needed to compete on the new value propositions. Whilst companies largely recognise the need to improve manufacturing efficiency, many have not embraced the need to develop and improve processes that deliver value to the customer (eg. Customer service processes, new product development processes etc). If customer service, innovation and quality are key differentiators and the way they add value, then companies need to ensure they have sustainable processes to deliver this value. Changes in operational activity have tended to be the result of evolution and opportunity rather than coherent operational strategy. Many companies need help in generating and enacting strategic change There is a lack of appreciation of the potential value of innovation in delivering value (and indeed the understanding of innovation in its many guises). Almost all companies interviewed reported some problems finding and retaining staff. Whilst in some cases labour shortages were due to specific skills and knowledge, there was also a general problem recruiting people with basic employability who had a desire to work in manufacturing. The poor image of manufacturing was a worry to the vast majority of interviewees. Many companies recognised the potential to exploit opportunities overseas. Some alluded to the fact that it might not be enough to market and export overseas, but that a manufacturing presence may be needed to fully exploit the opportunity. In terms of the support needed, companies stated that they would be looking increasingly for help and support in the areas of manufacturing efficiency and sales and marketing. Supply chain was also an area where companies reported they would be looking for help and support. Companies also suggested that they would like to see improvements in terms of “community”, with a number of interviewees looking for help in accessing not just help and support, but also introductions to other organisations. The research team believe that whilst not always recognised by the companies, support is also needed in the areas of strategy (and linked to this leadership) and in developing and improving processes that add value. Finally, the research suggests worryingly low levels of manufacturing entrepreneurship in Scotland, with only 3% of companies surveyed established within the past 5 years. This is worthy of further investigation. 4 Key findings and recommendations are expanded upon in Table 1. However the key recommendations can be summarised as: Manufacturing SMEs continue to require support in manufacturing efficiency, sales and marketing and supply chain. As companies move away from price as the main basis for competition and towards alternative value propositions, they also need support in developing and enacting strategy. Of particular urgency, companies need help in developing and improving the processes and capabilities that deliver value (beyond traditional manufacturing) Establishing processes that support innovation and product development will be central to the sustainability of many Scottish SMEs Further work needs to be done to investigate the apparent low levels of manufacturing start-ups Further work is needed to understand the areas where Scottish SMEs can actually compete on high volume /low complexity – often due to “localisation” factors Consideration should be given to supporting companies who wish to establish manufacturing overseas to exploit global opportunitiesA skills strategy must be created in line with the needs of manufacturing industry The poor image of manufacturing in Scotland needs to be addresse

The anatomy of high growth firms in Scotland

There is a growing volume of scholarly evidence from various countries which points to high growth firms (HGFs) as a key force fuelling economic growth. These businesses are typically highly dynamic enterprises which undertake very rapid growth, generating substantial levels of turnover and employment growth over relatively short periods of time (BERR, 2009; Anyadike-Danes et al, 2009; Mason et al, 2009; Henrekson and Johnannson, 2010)

The growth dynamics of technology-based firms in Scotland

In recent years high growth firms (HGFs) undertaking rapid, transformative growth, have been identified as important contributors to economic growth (Acs et al, 2008; Anyadike-Danes et al, 2009; OECD, 2010). For a wide variety of reasons, notably their contribution to employment growth, high export intensity, strong contribution to productivity growth and innovation, HGFs have been hailed as vital drivers of economic competitiveness (Henrekson and Johansson, 2010). As a consequence, these firms (often referred to as 'gazelles'), have been accorded a central role in many economic development strategies at both national and regional levels, especially during a time of economic austerity where employment growth has been an overriding policy goal for many governments (BERR, 2008; NESTA, 2011; OECD, 2010; Scottish Enterprise, 2011). Yet despite the strong policy focus on the promotion of HGFs in recent times, much remains unknown about these organisations and how best to support them (Henrekson and Johansson, 2010; Anyadike-Danes et al, 2012; Mason and Brown, forthcoming). Scottish Enterprise recently commissioned research on Scotland’s population of HGFs (Mason and Brown, 2010). This was the first comprehensive analysis of these firms ever conducted in Scotland and some of the findings were published in this journal (Brown and Mason, 2010). One of the most significant conclusions from this study was that they are extremely heterogeneous in terms of their age, size, ownership and industry sector. Few fit the stereotypical ‘gazelle’ definition which refers to young high growth firms that are less than five years old. The vast majority are over 10 years old, with some significantly older (Mason and Brown, 2010). Furthermore, only a relatively small proportion of these firms are in high-tech areas of the economy. According to some scholars, there is ‘no evidence that Gazelles are overrepresented in high- technology industries’ (Henrekson and Johansson, 2010, p.240). Despite their strong prioritisation by policy makers, the reality is that the representation of technology based firms (TBFs) in the population of HGFs is roughly on a par with their proportion in the economy (Mason and Brown, forthcoming). In view of these twin priorities of promoting high growth in general and high tech firms in particular, Scottish Enterprise commissioned further research to explore HGFs, especially in high tech areas of the economy. The objectives of this paper are twofold: to provide an update on the level of HGFs in Scotland and to assess the population of TBFs in Scotland. The paper proceeds as follows. First, the terms high growth and technology-based enterprises are defined. Second, the methodology is outlined. Third, the aggregate evidence on the levels of HGFs in Scotland is presented. Fourth, the population of TBFs in Scotland, including analysis of high growth TBFs is profiled. Fifth, some of the key characteristics of high growth TBFs in Scotland are examined. Sixth, some of features of these firms which were captured during the qualitative part of this research process are summarised. The paper finishes with some brief conclusions and issues for further research

Audit exemption and the demand for voluntary audit: A comparative study of the UK and Denmark

This is the accepted version of the following article: Collis, J. (2010), Audit Exemption and the Demand for Voluntary Audit: A Comparative Study of the UK and Denmark. International Journal of Auditing, 14: 211–231, which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/j.1099-1123.2010.00415.x/abstract.This study investigates the sufficiency of turnover as a surrogate for demand for voluntary audit and compares the determinants in the UK and Denmark. Empirical data for the study were drawn from government surveys of the directors of small private companies in both countries, which were based on the same research instrument, Bivariate tests support the hypothesised effects of turnover and a range of firm-specific factors suggested by economic rationality and agency theory. The main contribution of the study is the finding that turnover alone is not a sufficient surrogate for the costs and benefits of audit. The main predictors are turnover and a slightly different combination of management and agency factors in each country. The study provides a model that can be tested in other jurisdictions and its findings should be of interest to the accountancy profession and national regulators planning to introduce or revise audit exemption for small companies