Evaluations of three forms of advice and assistance provided to SMEs are reviewed. These are marketing advice, general business advice and export promotion assistance. The evaluation in Table 2.11 shows a Step 6 evaluation of the impact of the provision of marketing advice and assistance to SMEs
Tables 2.12 to 2.16 show, in a variety of very different countries, evaluations of the impact of the provision of general business advice upon SMEs. These countries are: Belgium, Bangladesh and the UK.
Table 2.9. Graduates into business, UK
Available online www.ingentaconnect.com/content/routledg/tepn/2001/00000013/00000002/art00004
Country United Kingdom
Time period of study 1994-7
Title of report Outcomes reported by students who participated in the 1994 Shell Technology Enterprise Programme [STEP].
Date of report 2001
Author/details P. Westhead et al., Entrepreneurship and Regional Development, Vol. 13, No. 2, pp. 163-185.
Objective of policy ●To provide undergraduates with experience of working in an SME over 8 weeks in the summer.
●To raise awareness of the possibility of working in, or starting a SME after graduation.
●To give SMEs experience of having graduates in their firm.
Key findings ●Students and SMEs found the projects very helpful.
●Upon graduation students were less likely than the control group to get a job in an SME, but more likely to enter quickly into employment.
●This is because their STEP project made them more attractive to larger companies.
Sophistication of evaluation Step 5:
●STEP students were “matched” with other similar non-STEP students.
Comments
Table 2.10. Investment readiness, New Zealand Available online www.med.govt.nz/templates/MultipageDocumentTOC____1246.aspx
Country New Zealand
Time period of study 2000-2003
Title of report BIZ Investment Ready Scheme.
Date of report 2003
Author/details Nick Davis, Ministry of Economic Development.
Objective of policy ●Provide entrepreneurs with improved understanding of raising external equity.
●Provide entrepreneurs with awareness of investment readiness.
●To achieve this by providing workshop based training.
Key findings ●99% of respondents from the workshops were satisfied with content and relevance in 2002/3.
●Slightly more than 1 in 10 participants actually raised external capital.
Sophistication of evaluation Step 2:
●Does track workshop participants.
Comments
Table 2.11. Impact of marketing advice, UK Available online http://oep.oxfordjournals.org/cgi/content/abstract/54/2/334
Country United Kingdom
Time period of study 1988-1994
Title of report Evaluating the effects of soft business support upon small firm performance.
Date of report 2002
Author/details C.M. Wren and D.J. Storey, Oxford Economic Papers, Vol. 54[2], pp. 334-365.
Objective of policy To enhance the performance of SMEs by providing subsidised consultancy advice by marketing consultants.
Key findings ●Overall the policy does not have impact.
●But in the target group of 10-80 employees participation raises longer run survival rates by 4% and sales by up to 10%.
Sophistication of evaluation Step 6:
●Applicants are compared with non-applicants, then Stage 2 applicants are compared with Stage 3.
Comments
Table 2.12. Impact of business advice, Belgium Available online www.informaworld.com/smpp/content?content=10.1080/0898562042000338598
Country Belgium
Time period of study 1997-2001
Title of report An Evaluation of Public Support Measures for Private External Consultancies to SMEs in the Walloon Region of Belgium.
Date of report 2005
Author/details Johan Lambrecht and Fabrice Pirnay, Entrepreneurship and Regional Development, Vol. 17[2], pp. 89-108.
Objective of policy ●To provide three person days of a free diagnostic advice.
●Subsequently different forms of advice are provided with different levels of subsidy.
Key findings ●Consultants recorded favourable evaluations from SMEs.
●However they have no significant influence on net job creation, turnover or financial indicators.
Sophistication of evaluation Step 4 approach but careful analysis.
●Distinguishes usefully between “supply” and “demand” effects.
Identified “adverse selection issue”.
Comments An important recent study
Table 2.13. Impact of advisory support, Bangladesh Available online http://findarticles.com/p/articles/mi_hb177/is_199704/ai_n5784454
Country Bangladesh
Time period of study 1993
Title of report The Importance of Support Services to Small Enterprises in Bangladesh.
Date of report 1997
Author/details J.H. Surder, D. Ghosh and P. Rosa
Journal of Small Business Management, April, Vol. 37, No. 2, pp. 26-36.
Objective of policy To enhance the performance of SMEs by the provision of business support services.
Key findings Significantly better performance is shown by SMEs receiving support services.
Sophistication of evaluation Step 5: Authors recognised that their results may reflect non-random selection process by support agencies.
Comments Despite being an “early” study it is well conducted and reaches appropriate conclusions.
Table 2.17 is an important methodological table which takes the use of business advice as its example. It shows that, although the vast majority of firms that received business advice were happy with that advice, there was little evidence that advice provision lead to enhanced performance amongst recipient firms.
Export promotion programmes are a favoured way of assisting SMEs.
Evaluations of the impact of such programmes seem rare, but the Swedish evaluation presented in Table 2.18 is helpful.
Table 2.14. Bank customers receiving business advice, UK
Available online No
Country United Kingdom
Time period of study 1999-2001
Title of report Profiting from Support.
Date of report December 2001
Author/details Barclays Bank SME Team.
Objective of policy ●To provide advice and assistance to individuals before or at the time of starting a business.
●The purpose is to enhance their chances, post start-up, of survival and growth.
Key findings Those seeking advice, compared with the match control group have:
●Higher survival.
●Fewer closures in financial distress.
●Faster and more sustained growth amongst surviving firms.
●Signs of better overall financial management.
Sophistication of evaluation Step 5:
●Comparison between clients of the National Federation of Enterprise Agencies.
●Matched control sample of Barclays Bank clients.
Comments Real risk of selection bias as those approaching Enterprise Agencies may differ from the “norm”.
Table 2.15. Assistance and advice for mature SMEs, UK Available online www.informaworld.com/smpp/content~content=a739469376~db=all
Country United Kingdom
Time period of study 1979-1989
Title of report The use of external assistance by mature SMEs in the UK: some policy implications.
Date of report 1993
Author/details David Smallbone, David North and Roger Leigh, Entrepreneurship and Regional Development, Vol. 5, pp. 279-295.
Objective of policy To encourage the use of consultants to assist SMEs.
Key findings ●45% of firms made no use of external assistance over 10 years.
●Mature firms have different requirements from newly established firms.
●Banks and accountants have an important role to play as a point of entry for firms into the support system.
Sophistication of evaluation Step 2:
●Not concerned with individual elements of policy.
Comments
Table 2.16. Use and impact of business advice, UK
www.ingentaconnect.com/content/routledg/raef/2000/00000032/00000013/art00005
Country United Kingdom
Time period of study 1997
Title of report The use and impact of business advice by SMEs in Britain: an empirical assessment using logit and ordered logit models.
Date of report 2000
Author/details P.J.S. Robson and R.J. Bennett, Applied Economics, Vol. 32, pp. 1675-1688.
Objective of policy ●To encourage the use of external business advice.
●To link business advice to SME performance.
Key findings The factors influencing the likelihood of firms seeking external advice are:
●Firm size [+].
●Rate of growth [+].
●Innovation [+].
The “impact” of advice depends on the field of that advice but for business strategy advice the significant effects were:
●Firm age [-].
●Firm size [+].
●Export [-].
Sophistication of evaluation Step 3:
●Firms are asked to assess the impact of advice on a scale of 1-5.
●No verification on selection issues is addressed, but a multi-variate framework is utilised.
Comments
Table 2.17. Evaluating entrepreneurial assistance programs, US Available online www.questia.com/googleScholar.qst?docId=5002434866
Country United States
Time period of study Not specified
Title of report Some Problems in Using Subjective Measures of Effectiveness to Evaluate Entrepreneurial Assistance Programs.
Date of report 2001
Author/details Ed McMullan, J.J. Chrisman and K. Vesper, “Entrepreneurship Theory and Practice,” Fall, pp. 37-54.
Objective of policy The paper reviews these programs:
●Western Economic Network [WEN] which is 13 evening class sessions each of 3 hours.
●SBDC activity, consisting mainly of counselling and consulting, rather than coursework.
●They argue that the economic development impact sought from entrepreneurial assistance programs is the creation of tacit and explicit knowledge that will lead to competitive advantage.
Key findings ●The subjective views of course clients [Step 2] are uncorrelated with the attribution and objective measures [Step 3].
●The authors question the merits of the Step 2 approach.
Sophistication of evaluation Step 2
●Clients’ opinions are compared with Step 3.
●Client estimates of impact suggest the Step 2 approach has limited value.
Comments