ERC Transition Funding - Supporting recovery, enabling transition

Small and Medium Enterprises (SMEs) provide 60 per cent of UK private sector employment (BEIS, 2020) and young and scaling new firms create a disproportionate share of all new jobs (Anyadike-Danes and Hart, 2017, 2018). Effective policy to support entrepreneurship and SMEs will therefore be critical to sustaining employment and rebuilding prosperity in 2021 and beyond. Supporting business dynamism will also be important for maintaining inclusive growth in poorer and more remote parts of the UK. Rebuilding strength in the economy also creates opportunities to implement policies to pivot SMEs towards net zero, emphasising innovation and investment in low carbon technologies and business models. Our research and impact proposals - developed in consultation with policy makers - aim to support these national policy priorities - rebuilding growth, net zero and levelling-up - through an ambitious programme of research, knowledge curation and engagement. Previous research has shown that new and young firms are responsible for most of the job creation and innovation in a country and ultimately drive growth and prosperity (Anyadike-Danes and Hart, 2018). Entrepreneurship has also been proposed as a key route thorough which societies can combat sustainability challenges such as climate change and inequalities (Frese et al., 2016; Gras et al., 2020; Shepherd & Patzelt, 2011). Our future research programme builds on these observations while recognising that sustainable business models which address social and environmental challenges as well as creating economic value - a 'triple bottom line approach' - involve potential trade-offs between priorities and increases decision-making complexity (Belz & Binder, 2017). Indeed, sustainable entrepreneurs tend to face greater challenges (Pinkse & Groot, 2015) and perceive greater financial, administrative and information-based barriers to starting their ventures than regular entrepreneurs (Hoogendoorn et al., 2019). Policy measures designed to support SMEs' moves towards net zero face similar complexity and potential trade-offs. Reflecting these challenges, our research programme is organised into four Work Packages which reflect key areas of policy development - rebuilding strength, international competitiveness and enabling the dual transition. WP1, led by Prof Mark Hart (Aston), focuses on building strong and resilient enterprises with a focus on longitudinal data analysis and the diversity of entrepreneurs. WP 2, led Dr Kevin Mole (Warwick) focuses on the enablers of innovation with a specific focus on national and local policy supporting the digital and net zero transitions. WP3, led by Prof Stephen Roper (Warwick) focuses on the implementation of innovation within the firm focusing on low carbon and digital innovation in SMEs and their relationship with business performance. WP4, led by Prof Jun Du (Aston), focuses on SME internationalisation, the relationship to growth and productivity, and the impact of different localities' extent of international engagement. Three horizontal themes link each of the WPs: a focus on policy-relevant research topics and developing actionable recommendations; a concern with spatial disparities in SME growth and productivity; and, a clear differentiation between performance drivers in different sub-groups of the population of SMEs (i.e., by firm type, location and the characteristics of the owner-management team - the latter to permit analysis of diversity and inclusiveness). The research programme will be complemented by a programme of knowledge curation and engagement activities outlined in the case for support.