In the Balkans, investors operate within a devil’s circle

Promoting entrepreneurship is often viewed as a key component for generating growth in the transition economies of eastern Europe. Tim Vorley and Nick Williams write that tackling corruption has an important role in this process. Drawing on recent research in Bulgaria and Romania, they assess the challenges posed by corruption for entrepreneurs in the region, noting that the issue must be understood and tackled effectively if entrepreneurship is to have a positive and productive impact on national economies. Currently, investors cannot break out of a ‘devil’s circle’ in which they are forced to engage in corrupt practices themselves, if they are to get anything done

Understanding the firm-level effects of regulation on the growth of small and medium-sized enterprises

Small and medium-sized enterprises (SMEs) represent an important part of the UK economy. The impact of regulation on these firms is important to understand, especially amid frequent claims that SMEs are disproportionately affected by regulatory costs and that regulation may hamper business growth. We searched major databases for relevant empirical research on the firm-level effects of regulation on SME growth. This search found that there is still very little firm-level empirical evidence of the effects regulation has on SME growth. While cutting red tape and bureaucracy is broadly welcomed as beneficial for business growth, there is very little evidence demonstrating how or when it impacts on SME growth at a firm level. It is necessary to fully understand these effects in terms of their dynamic, direct and indirect influences in order to appreciate both the ways in which they may constrain but also facilitate SME growth. Without this understanding, well-intentioned attempts to support these firms and growth-oriented owner-managers and entrepreneurs may be doomed to failure

Recovery and resilience: How can innovation policy support the response

The coronavirus pandemic has affected many of the factors shaping the R & D and innovation landscape. Innovative businesses, including early stage companies, face running out of cash due to a lack of availability of external finance or funding, and parts of sectors face being wiped out by economic contraction. R & D projects have hit the buffers due to operational restrictions. At the same time, however, there have been some potential positive effects. Businesses have had to innovate rapidly to adapt to new circumstances, resulting in business model changes and investment in new technologies, especially digital solutions. With digitally-enabled solutions becoming in demand, technology companies have made their products freely available. This chapter reviews these changes and discusses the potential impacts of COVID-19 going forward. In this context, the chapter looks at how policies and programmes could be used to best respond to the crisis in ways that may assist with longer-term competitiveness, and the challenges and opportunities that could shape a recovery that places innovation at its centre. It does this through the lens of priorities related to the 2.4% R & D target, supporting innovative companies, and improving innovation diffusion

Financing small and innovative firms during Covid-19

Previous research on the financing of smaller innovative firms has established that being small per se creates problems in accessing finance, but being small and innovative adds another layer of difficulty. This new research explicitly questions whether the Covid-19 crisis has added to the debt access problems of an already disadvantaged group of firms. Using a unique Covid-19 period dataset of 9,000 UK SMEs, we find that the most innovative firms had the highest demand for loans during the Covid-19 crisis and evidence that those firms trying to introduce new products and services faced more severe borrowing constraints. As the vast majority of Covid-19 loans in the UK were government guaranteed, we also find that several classes of innovative firms found it more difficult to access government supported loans. It was also not the case that those most impacted by the crisis had the most privileged access to government loan schemes despite a greater need for liquidity. These findings have potential implications for financing innovative firms in the post-Covid-19 world, such as proposing a specific innovation loan guarantee scheme with higher than conventional guarantee rates

The 'imaginary' challenge of remaking subnational governance: Regional identity and contested city-region-building in the UK

With the structuring of subnational governance driven primarily by economic goals, an issue that has become increasingly overlooked is that of identity. Drawing on interviews with stakeholders from the Sheffield City Region, the paper builds on Jones and Woods’ framework of 2013 of ‘material’ and ‘imagined’ coherence, demonstrating the ‘imaginary’ challenge of remaking subnational governance in the context of rescaling from regions to city-regions. It shows that historical regional identities can persist even in the absence of associated material components of governance, and that rescaling can create asymmetries between material and imagined coherence, resulting in competing imaginaries that hinder the new subnational arrangements

Intersections of gender, ethnicity, place and innovation : mapping the diversity of women-led SMEs in the United Kingdom

This article advances knowledge on the diversity and heterogeneity of women-led small and medium-sized enterprises (SMEs) in the United Kingdom by analysing how gender intersects with ethnicity and place to influence their engagement in innovation. We adopt an intersectional perspective, and base our analyses on the Longitudinal Small Business Survey (LSBS) data of 29,257 SMEs over the period 2015–2018. Our findings suggest that despite their limited number, as well as firm size and industry sector constraints, women-led SMEs are actively engaged in innovation activities. In addition, our results on the effects of intersecting categories of gender, ethnicity and place on innovation, further emphasise the heterogeneity of women-led SMEs, both with regard to their likelihood to engage in innovation, as well as the place where innovation is most likely to occur. Implications for policy and practice are highlighted

Social innovation in emerging economies: A National Systems of Innovation based approach

Drawing insights from the national systems of innovation and social entrepreneurship literature, this article examines how national systems of innovation (NSI) and social entrepreneurship interact to generate social innovation in emerging economies. Through the examination of a case study of the Emergency and Management Research Institute (EMRI), a public private partnership (PPP), social innovation is found to be an interactive bottom-up collective learning process where EMRI has developed a new model of social innovation. It also highlights the complex context in which social innovation occurs. As a boundary-spanning activity across the public and private sectors, the interactive learning process and associated capability building for social innovation has provided a catalyst for wider social reform and for the development and redesigning of NSI for social innovation-led value creation in emerging economies. Through such an approach, the EMRI has overcome the institutional voids and developed legitimacy through social innovation tailored to the local context; it thereby represents an alternative approach to the often top-down NSI organisations of developed economies

Geographies, geometries, and economies of spatial productivity in the UK

While there has always been a strong urban bias in narratives about productivity and spatial inequalities, our analysis based on micro data (LSOAs) shows a much more complex picture. High productivity does not seem to be as restricted to urban areas, and nor is the performance of a city region entirely determined by the strength of its central business district alone. The link between density and productivity is less directly deterministic than often characterised – effective density matters more than physical density, and the possibility of synergy implied by economic density does not guarantee the realisation of that synergy – other factors must also fall into place

The dark side of AI in professional services

The introduction and widespread adoption of Artificial Intelligence in the professions has the potential to deliver a number of critical public goods, such as widening access to justice and healthcare through AI-powered professional services. Yet, the deployment of AI in the professions does not come without challenges, exemplified by the concerns about explainability, privacy, and human agency. In this paper, we explore how these issues may give rise to dark sides of AI in professional services and illustrate how an uncoordinated process of adoption and deployment can threaten the scope of AI-powered services. In particular, we illustrate how the adoption and deployment of AI in services may undermine the fiduciary duty between clients and professionals that, so far, has safeguarded the relationship between them, creating a ‘market for lemons’ of professional services. We conclude with a reflection on plausible ways forward to facilitate and smooth the transition to AI-powered services