Anchor institutions and small firms in the UK: a review of the literature on anchor institutions and their role in developing management and leadership skills in small firms

Smallbone, David, Kitching, John and Blackburn, Robert ORCID: 0000-0002-6488-0284
(2015) Anchor institutions and small firms in the UK: a review of the literature on anchor institutions and their role in developing management and leadership skills in small firms. [Report]

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Executive Summary Introduction Defining anchor institutions • The aim of this literature review is to assess the type of anchor institutions best suited to supporting management and leadership development in small firms and to present recommendations on how organisations might perform this role better. • The concept of ‘anchor institution’ emerged in the 2000s as a new paradigm for understanding the role that place-based institutions could play in building successful local economies and communities. Anchor institutions can play a critical role in terms of coordination and support of economic activity. Key characteristics of anchor institutions include spatial immobility, embeddedness in the local economy and community, and a large resource base that is manifested in local purchasing, employment and business support. • The concept of anchor institutions emerged from the US where it has become an integral part of urban regeneration policy and practice. It is typically related to spatial immobility, large size and strategic contribution to the local economy as purchaser and employer. The longer history of the concept in the US compared with the UK is associated with greater diversity in terms of the organisations that are included in the definition. • Anchor institutions must have a social role, a social purpose which enables it to develop mutually beneficial and sustainable relationships within the host community. • Possible anchor institutions include non-profit organisations such as higher education institutions (HEIs), for instance, university business schools, academic medical centres, cultural institutions including museums, libraries and performance arts facilities, religious and faith-based establishments and performance arts centres, utility companies, military bases, sports clubs and, under certain circumstances, large private sector organisations. • HEIs might perform an anchor role through their activities in research, the provision of knowledge-focused services to businesses and other employers, and educating people to support the labour requirements of innovative local employers. This latter function might include provision of management and leadership development support to small firms, who constitute the vast majority of the business stock in every locality and are important providers of goods and services, employment and income. vii Anchor institutions and small firms in the UK How anchor institutions might support management and leadership development in small firms • Management and leadership development might be defined as the various social processes through which those tasked with the responsibility for managing organisations acquire the knowledge and skills intended to enhance organisational performance. • Anchor institutions must perform the following interrelated tasks, and address the associated challenges and barriers, if they are to contribute to small firm management and leadership development: o Defining the objectives of development support initiatives and identifying and specifying a target population; o Reaching the target population; o Designing development support; o Delivery and facilitation of development support; o Monitoring and evaluating the outcomes of development support; o Anchor institution developmental learning. Developing management and leadership skills in small firms • The small firm population is highly diverse in terms of size, ownership, business activities and sector, nature and shape of markets, the relevance of product and process innovation as a means of creating and sustaining a competitive advantage, and growth intentions. Each of these owner and business characteristics has implications for the nature of management and leadership within the firm, the mix of knowledge and skills required for effective management and leadership, and for how management and leadership capacity might best be developed. • Most small firms typically have a simple management structure, with one tier of management and sometimes just a single manager, operating according to informal customary norms rather than formal procedure. Many owner-managers do not possess formal educational qualifications and lack any specific formal training, relying largely on prior employment and managerial experience, and their own experiential learning onthe-job to provide them with the managerial knowledge and skills they use to operate their businesses. viii Anchor institutions and small firms in the UK • Management and leadership development is a situated and context-dependent activity arising from participation in planned and unplanned activities in the workplace and elsewhere. There is substantial evidence pointing to the ubiquity and importance of onthe-job, experiential learning for owner-managers and employed managers arising from participation in working activities and from interaction with suppliers, customers, employees and others. • Anchor institutions seeking to support small firm managerial and leadership development should facilitate this process of contextualised learning. Support providers must attend to the diverse managerial skills and development needs observed in small firms. Organisational and market contingencies mean that small firm managers develop their capabilities in diverse and often unique ways. A review of the evidence base • The report reviews the evidence for a number of possible anchor institutions—including HEIs, Local Enterprise Partnerships (LEPs) and, in the US at least, hospitals. • In the UK the most commonly identified anchor institutions are universities. Specific forms of interaction between the universities and small businesses include consultancy and contract research specific to business need; continued professional development; and graduate start-ups. Universities vary in their capacity and willingness to undertake such activities. • Past experience suggests that, in the absence of intervention, collaboration between universities and small firms tends to be low because of a combination of demand and supply side influences. • On the supply side, universities often lack a real understanding of SME knowledge transfer needs; second, third sector (or enterprise) activity is not always reflected in promotional criteria for university staff and, third, the bureaucratic culture within universities tends to favour fewer links with larger enterprises as being more efficient. • On the demand side SMEs have a low intensity of research and innovation, particularly in low and medium technology industries. This limits their demand for collaboration, especially since universities tend to be perceived as ivory towers by business owners. SMEs also face difficulties in finding out how to approach complex organisations such as universities. ix Anchor institutions and small firms in the UK • LEPs are non-statutory bodies that have taken on many of the responsibilities of the former regional development agencies and also hold responsibility for enterprise zones. They are part of the government's local growth agenda. LEPs must be chaired by a business person and at least half of their membership must come from the private sector. • There is some concern that LEPs need to engage more with small businesses. They need to consult with them more often and deliver forms of support relevant to their selfdefined needs, for example, procurement advice. • Three case studies are presented and their good practice points extracted with regard to identifying and reaching a target population, designing and delivering support, and to monitoring and evaluating outcomes. • Although the cases demonstrate elements of good practice experience with regards to cooperation between SMEs and the university sector, it is doubtful whether this is sufficient to warrant the description of ‘anchor institution’.

Item Type: Report
Depositing User: Symplectic Admin
Date Deposited: 01 Oct 2020 14:52
Last Modified: 03 Mar 2021 10:47
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