The Challenge

• Micro-businesses rarely attract policy attention despite their importance. There are more than 1.1 million microbusinesses, employing 4.1 million people (18.6% of all private sector employees) and contributing £55bn of turnover (or £1 in every £6 of turnover from employing firms). This is far too big an economic contribution to neglect.

• Many micro-businesses are concentrated in the ‘traditional’ types of sector we focus on, rather than economic activities in the ‘new economy’ that tend to capture the attention of policy-makers and practitioners.

• Ethnic minority and migrant communities often own and run micro-businesses in traditional sectors; yet even in ‘superdiverse’ areas like the West Midlands, they rarely utilise ‘mainstream’ business support programmes and initiatives. This presents a knowledge gap in the role that trusted intermediaries offer in supporting such firms, which means in practice many are neglected.

• Management processes and working practices are often informal and opaque, which poses challenges for the assessment of productivity and performance.  Conventional productivity measures are unlikely to capture the way in which work is organised in many micro-businesses

Overview

Researchers from Aston, Birmingham and Warwick University secured funding from the Economic and Social Research Council to develop productivity-boosting interventions to support micro-businesses (with 1-9 employees) in the West Midlands.  The three-year project, located at the Aston Centre for Research in Ethnic Minority Entrepreneurship (CREME) and led by Professor Monder Ram, is undertaken in collaboration with business and civil society partners. It focuses on firms facing major challenges: retailers in deprived areas; the Bangladeshi catering sector and creative businesses with owners and workers from deprived backgrounds. Such firms rarely feature in contemporary debates and initiatives on productivity.

Methods and participants

Qualitative and quantitative methods – co-produced with academic and non-academic partners – are being used to develop a detailed understanding of management practices of these firms, with a particular focus on how owners engage their workforce to improve their growth.

The aims of the project are threefold:

1. To provide a detailed understanding of management and engagement practices and their relationship to productivity in micro-businesses, with a focus on disadvantaged communities in hard-to-reach sectors (retail, catering and creative enterprise). A survey and case studies of business owners and workers will be undertaken, focusing on how nature of management, working practices, and employee experiences relate to the performance of the firm.
2. To ensure that the business support system is responsive to the needs of micro-businesses from disadvantaged communities. Researchers, business support specialists and civil society agencies will share knowledge during the project with the aim of collectively developing policies to enhance support for micro-businesses.
3. To deliver practical solutions to micro-businesses wishing to improve productivity and performance. Research and knowledge arising from interactions with policy makers during the project will inform the development customised programme of business support for micro-businesses.

Fieldwork, findings and outputs

The project will produce important practical outcomes for businesses by providing support for evidence-based interventions that will benefit businesses that participate in customised programmes designed to upgrade leadership and management skills leading to a boost in productivity.  Insights from their experiences and will promote greater understanding of ‘what works’ that can guide practitioners in other contexts. The project will also actively support the development of a more responsive and inclusive business support ecosystem in the West Midlands by mobilising ‘mainstream’ and non-traditional intermediaries and via multiple pathways of engagement. Knowledge and interventions from the project will be ‘co-produced’ by academic and non-academic partners.

This knowledge will be shared with a range of business support providers in order to develop evidence-based solutions. Customised support for micro-businesses in line with these solutions will then be provided by the Aston Centre for Growth.

Research team

The project team is led by Professor Monder Ram, Director of CREME (Aston Business School [ABS]), and comprises Prof. Mark Hart (ABS), Dr. Judy Scully (ABS), Dr. Luke Fletcher (ABS), Prof. Anne Green (University of Birmingham), Dr Imelda McCarthy (CREME) and Prof Stephen Roper (Warwick University). They represent three leading applied research Centres with distinct but complementary perspectives are involved: the Centre for Research in Ethnic Minority Entrepreneurship (CREME, based at ABS), the Enterprise Research Centre (ERC, at ABS and Warwick University) and City-REDI (Regional Economic Development Institute, Birmingham University). They combine with non-academic partners – Ashley Community Housing (an award-winning social enterprise with a keen interest in promoting employability of migrants), the Bangladeshi Network (comprising four groups with local and national reach into the sector, and operating under the banner of ‘Skills Link’), Citizens UK (a national civil society alliance), and Punch Records (a business with a strong social mission to promote artists from deprived backgrounds) – with whom they have an established track record of collaboration. Together, this collaboration will create a business development intervention that is rooted in the concerns of (neglected) micro-businesses as well as scientific principles.

Get involved

Contact Professor Monder Ram at m.ram1@aston.ac.uk or Katherine Jones at k.jones14@aston.ac.uk

Learn More

At the recent CIPD Applied Research Conference, some of the research team shared insights from the research to date.