Small business owners’ personal ambition and leadership skills—not just access to cash—determine whether their companies grow, yet most research has treated growth as a simple short-term outcome rather than a complex, dynamic process. This six-part project tackles that blind spot by studying how entrepreneurial teams, their firms, and their local environments interact over time. One work package examines what shapes an owner’s ambition across different countries using the Global Entrepreneurship and Development Index. Another investigates how entrepreneurs’ mental models of their ventures influence their growth intentions and capabilities. A third focuses on under-represented groups, exploring how household and community settings affect decisions to finance and expand a business. The remaining packages analyse how access to finance, innovation and exporting, and firm demographics drive job creation and productivity. If successful, the research could help policymakers, lenders, and business support agencies design more effective programmes—ones that recognise that a bakery in Birmingham and a tech startup in Bristol face fundamentally different growth challenges, and that a one-size-fits-all approach to small business support has been failing them.
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Past research has largely failed to develop a robust understanding of SME performance. There are three reasons for this: first, there has been a failure to recognise the importance of entrepreneurial ambition and leadership capabilities; second, studies have not acknowledged the variety of ways in which growth occurs and its dependence on firms' operating context; and, third, 'growth' has very often been regarded as a short-term outcome variable rather than part of a dynamic process. To address these issues our research proposals adopt a dynamic and multi-level approach embracing the entrepreneurial team, the firm and its operating environment. Our proposed research is organised into six work packages (WPs) each with a specified lead researcher. The first three months of each WP will be used to compile a thematic White Paper - a state of the art survey. WPs also have shared milestones at 12, 24 and 36 months linked to the State of Small Business in Britain report and SME Summit. Three work packages focus on the entrepreneurial leadership team and growth. These are: WP1: Entrepreneurial Ambition and Growth (Lead: Autio) - research will focus on what shapes entrepreneurial ambition in different contexts, and the interaction between entrepreneurial ambition and other drivers of SME performance. This WP adopts an econometric, multi-level approach and will build on the recently developed Global Entrepreneurship and Development Index (GEDI) methodology. Analysis will be international and comparative. WP2: Entrepreneurial Leadership, Capabilities and Growth (Lead: Lockett) - this WP focuses on the factors which influence business owners' growth intentions and capabilities and their influence on growth. How do the mental models entrepreneurs (and their teams) have of their ventures shape their growth intentions? What factors shape these mental models and the capabilities of firms' leadership teams? WP3: Diversity and SMEs in the Emerging Economy - Individual and Household Influences (Lead: Carter) - this WP builds on the work of the Enterprise and Diversity Alliance (EDA) to understand the barriers to entrepreneurial growth in under-represented groups. A central theme will be the relationships between individuals' household and community setting, ambition and their decisions to finance and grow SMEs. Engagement with the EDA will maximise practical impacts from the research. Our three other proposed work packages have the SME as the unit of analysis: WP4: Finance and Growth (Lead: Wright) - this WP will explore the impact of access to finance on growth at different points in firms' development and for different types of firms reflecting both the demand for and supply of SME finance. Research issues will include: the role of finance in explaining firm survival and growth; the relationship between growth and debt finance; borrowers' perceptions of credit supply and issues of discouraged borrowers; the determinants of banks' lending decisions; finance and growth in different types of firms. WP5: SME Innovation, exporting and growth - An Embedded Perspective (Lead: Love) - this WP will focus on the inter-related barriers and enablers of SME innovation and exporting and their growth implications. Key questions will relate to: the effect of innovation and exporting on growth performance; the key drivers and barriers of SME innovation and exports; the effects of local knowledge, innovation linkages and learning-by-exporting on SME innovation. Analysis will be international and comparative. WP6: Firm Dynamics, Job Creation and Productivity Growth (Lead: Hart) - this WP focuses on the dynamics of business demography and growth. Which types of firms are responsible for job creation and economic growth? Does the evidence suggest whether SME growth enhances national productivity in the short or longer term? What types of SMEs contribute to job creation and productivity growth?
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