Abstract
Within the context of recent government proposals for the reform of small business advisory services, this article assesses whether an organisation such as the United States Service Corp of Retired Executives (SCORE) would be a desirable component of a future UK system for informing and advising would be business founders and SMEs. Following a review of SCORE, UK Government proposals and the transferability of the concept, it is concluded the idea of a ‘UK SCORE’ is worthy of further consideration.
Introduction
The UK SME advisory system has been subject to extensive criticism (Bennett, 2008; Richard, 2008). Accepting much of this criticism, the present UK Government has dismantled the existing system and is in the process of designing a new, cheaper, restructured ‘system’ more dependent on the market, private sector and volunteers (BIS, 2010, 2011). While the literature has provided impact evaluation and critique of the business advisory system (Curren and Storey, 2002; Mole et al., 2008), it has contributed little to inform the development of an alternative approach. Exceptions are lessons drawn from US policy for high tech entrepreneurship through discussions of, for example, Silicon Valley, venture capital, commercialising university research and the Small Business Innovation Program (Connell, 2009; Cosh and Hughes, 2010; Hughes, 2010). However, at least in the UK, much less is known about, and few policy lessons have been drawn from, the US’s long established and extensive system for informing, advising and educating all small firms.
To date there has been little public debate surrounding the Government’s proposals. This article hopefully begins, and informs, a discussion of how SME advisory services might be beneficially restructured while accepting the need to reduce government expenditure. It does so by presenting a case study of the US Service Corp of Retired Executives (SCORE) and assessing whether a similar organisation could be both a desirable and feasible component of a future UK system.
While cross-border policy transfer has become increasingly common, it is recognised the process is not straightforward and often less than successful (Dolowitz and Marsh, 2000; Wolman, 1992). This may be because of an incomplete understanding of the policy, its performance and the wider context in which it operates (i.e. SCORE in the US), failure to pay sufficient attention to the environment into which the policy is being transferred (in this case, the UK) or a failure to recognise (and make) the complementary changes in the host country necessary to enable effective transfer and implementation. This article seeks to address some of these potential pitfalls by examining the US SCORE in some depth in the first section, outlining the UK business advisory environment in the second and then, in the final section, discussing issues relating to the transferability of the model and what needs to change in the UK to increase the probability of successful transfer.
Service Corp of Retired Executives (SCORE)
SCORE today
SCORE is a not-for-profit charitable association offering free and low cost advice and training to all SMEs wishing to access its services at all stages of the business life cycle. In 2009 it had 378,100 clients of which 45% received one-to-one, face-to-face counselling with the remaining 207,000 participating in some form of group activity such as seminars, training courses and workshops (SCORE, 2010). Services are delivered by approximately 13,600 unpaid volunteers. Between them, they delivered 203,000 face-to-face counselling sessions and a further 119,000 via email. Its mode of operation is reactive (i.e. for those approaching it). It also has a limited number of proactive programmes targeting specific clients (e.g. SMEs in disaster areas) and a highly informative, well-developed website with information and advice for all market segments including young people, women, veterans, ethnic minorities and third age entrepreneurs in both English and Spanish.
The Association consists of Headquarters in Washington, in which its 15 paid staff are located, and 364 local chapters. HQ is responsible for liaison with Federal organisations such as Congress and the Small Business Administration, financial management, fund raising, allocating a small annual grant to the chapters and the provision of ‘infrastructure’ to support them. This infrastructure includes a national website, guidance and training for volunteers and policy such as the ethical standards to be observed by volunteers and chapters. Services are delivered by the chapters through approximately 800 outlets which are usually housed in host organisations such as Chambers of Commerce. Chapters are managed by the volunteers and are responsible for service delivery, statistical reporting, quality assurance, recruiting volunteers, local marketing and a local website. These sites both draw heavily on (and link to) the national site and cover specific local information, events, office hours and details of, and how to contact, counsellors, Clients can simply drop in to an outlet during advertised office hours but are advised to make an appointment.
Data on the characteristics of volunteers are not readily available. However, the majority are retired and between 60 and 70 years of age with around 25% being female or from ethnic minorities. The majority are highly experienced former business owners or corporate executives. A substantial minority are ex-SCORE clients (Yancey, 2009).
SCORE’s marketing material ‘sells’ volunteering as an opportunity to give something back to society, community recognition and leadership, professional and personal development, lifelong learning and peer networking. For new volunteers there is a formal application and acceptance process followed by a six-month probationary period during which there is a training programme in mentoring and a final assessment by an experienced volunteer. To join the Association, volunteers commit to at least four days per month and sign up to the code of ethics and professional practice covering issues such as rules designed to avoid conflicts of interest and the maintenance of administrative records. Volunteers not performing as required can be put on ‘inactive service’ and corrective action taken (SCORE, 2011).
In 2009, the Association had income of $10.38m and expenditure of $10.35m. The 1.2m hours devoted by the unpaid volunteers are un-costed. The main costs are the paid HQ staff, volunteer expenses and training, national infrastructure, a small budget for chapters and a limited number of proactive targeted programmes. Its income consists of a $5m Federal grant (via the Small Business Administration), in kind donations such as free office space, receipts from its services ($2.31m) and gifts/donations ($2.34m). While all counselling is free, there is a small charge for many training courses and workshops. A review of Chapter websites suggests these cost around $45 for a one-day event. The gifts and donations are generated largely by the SCORE Foundation set up explicitly to raise finance. In 2009, it raised $1.75m of which 11% was from individuals and 89% from corporate sponsors. Generally corporate sponsors prefer to fund specific products, programmes and initiatives (i.e. something to which they can attach their name) rather than SCORE’s core advisory services and organisational infrastructure (SCORE, 2010).
History and context
As with the wider US SME advisory system, the history of SCORE is one of longevity and relative stability. The House of Representatives Small Business Committee was established in the 1940s and the Small Business Administration (SBA) in 1954. The SBA was to provide management assistance and finance to SMEs and to lobby for entrepreneurship and the SME sector. Both continue to exist today.
From the outset the SBA made some informal use of volunteers due to a shortage of resources for its management advisory role. With Congress giving priority and resources to its financial remit, in 1964 it had just 61 paid counsellors outwith Washington. Recognising the importance of its advisory role (especially for businesses to which it had made loans), it advertised for volunteers in 1963. Rather than the ‘hoped for’ 600 responses, it received 7500 applications. It formerly set up SCORE in 1964. Subsequently, it expanded incrementally but rapidly. The number of chapters gradually increased and spread to cover most of the United States. Their creation was (and still is) dependent on local initiative and volunteers rather than any central planning. However, acceptance of a new chapter into the Association is subject to it meeting criteria such as a minimum number of volunteers (although the criteria may be relaxed in hard-to-serve places such as rural areas). By the early 1980s it had 44,000 clients, around 10,000 volunteers and was the main source of small business advice and management assistance (Brudney and Gazley, 2002). Following a Congress sponsored study which identified some duplication between SCORE and SBA counsellors (Rockville Consulting Group, 1980), SBA counsellors were re-assigned to other duties further strengthening its financial remit.
Despite this, other SME advisory services began to develop in the early 1980s. In 1977 the SBA introduced a pilot programme, University Business Development Centres, to make available academic expertise to SMEs. This passed into law in 1980 as the Small Business Development Centre (SBDC) Program using paid staff to deliver advisory services to SMEs. The Federal Government, via the SBA, meets up to 50% of the cost which has to be matched by local funding. As local and State interests have initiated and part funded the formation of centres, the network of SBDCs has gradually spread so that it now has over 1000 outlets, some 5000 staff with a SBDC in each State. The total budget for SBDCs is now just over $200m (Small Business Administration, 2010). In part, the original rationale for SBDCs was that SCORE dealt with ‘mom and pop’ businesses while SBDCs, with their access to academic expertise, would provide more in-depth and technical management assistance to more ‘sophisticated’ SMEs.
Reflecting the view that women business founders and owners face gender specific issues and that SCORE was overly male dominated, in 1988 Congress passed the Women’s Business Ownership Act which provided funding, via the SBA, for Women’s Business Centers (WBCs). As with other SBA programmes, it is up to ‘locals’ to initiate the creation of a centre. There are now around 100 WBCs in the US, most of which were set up in the early 1990s. In addition to SCORE, SBDCs and WBCs, there is a wide variety of other advisory services funded by State and local government and a plethora of industry and private sector sources of management and technical assistance.
From being the main source of SME advice in the early 1980s, by 2009 SCORE had become part, although a substantial part, of a larger advisory system. Of the 1.1m established SMEs using one of the three sources (i.e. SCORE, SBDCs, WBCs), 52% used an SBDC, 40% SCORE and 8% a WBC (SBA, 2010).
While entrepreneurship and SMEs are seen as fundamental to economic development and economic recovery, given the level of US Government debt, not surprisingly the SBA’s budgets are under pressure. Under these circumstances, SCORE wishes to further develop its services. Its current plans are to increase client number to one million and its volunteer force to 22,000. It also proposes to introduce an online mentoring service via video, a Mentor Certification programme, a 24-hour national call centre and develop communities of specialist advisors/volunteers. To implement these proposals it has asked Congress to increase its annual Federal grant to $15m from $5m (SCORE, 2010, Yancey, 2009).
Performance and impact
Early reviews of SCORE concluded that it was a low cost-effective service (Chase, 1973; Nellis, 1989; Rockville Consulting Group, 1980; Rosenbaun, 1984) and generally argued that it had been given inadequate priority and somewhat under-funded by the SBA. The criticisms related to inadequate training and management of volunteers. Both training and management were subsequently improved. More recent reviews are not readily available. Nor have evaluations estimating net impacts been undertaken (Gu et al., 2008). 1 However, a Gallop survey of 2009 SCORE clients claims that it helped set up 68,450 new businesses, create 30,800 jobs at a cost to the SBA of $100 per new business and $300 per job. (Gallup, 2010). It is not clear how these figures have been estimated.
SCORE and SBDC clients 2009.
Source: Concentrance (2010).
Notes: Characteristics measured at the time of the first advisory session. Nascent entrepreneurs have taken at least one step to start a business and a new start has been in business for less than a year.
At this level of analysis there are few differences between SCORE and SBDC clients. While marginally larger, the majority of SBDCs clients are also micro-businesses. A marginally greater proportion of SCORE clients are female and third age. Given that the majority of volunteers are retired, the later characteristic is perhaps not surprising. Both organisations serve clients more or less equally at all stages of the business life cycle and provide advice on very similar topics with the main ones being business planning, marketing, general management, cashflow analysis and pricing strategy (not shown in Table 1). Nor is there any evidence that SCORE clients are less likely to be in manufacturing or technology-based businesses.
Performance of SCORE and SBDCs; % of 2009 clients.
Source: Concentrance (2010).
Notes: Life cycle stage defined when advice began; start-ups in business for less than one year.
Comparing SCORE and SBDCs, Table 2 suggests that SCORE clients generally believe advice was marginally less useful and the perceived impacts to be marginally less than SBDC clients. At least in part, this is because SBDCs have a greater number of larger SME clients receiving longer periods of counselling. For both organisations, perceived usefulness and impact increase with company size and the length (or amount) of counselling. Consequently, the differences are not surprising. However, the differences are not great and SCORE is highly appreciated by both start-ups and existing businesses. Such differences also perhaps pale into insignificance from the perspective of public sector value for money. A follow up survey of 2007 and 2008 clients found that SCORE clients did at least as well as SBDC clients in terms of survival and growth (Concentration, 2010).
The UK scene
History and development of advisory services
Compared to the US, the UK advisory system is recent, fragmented and has been subject to more or less continuous organisational change driven, in part, by debates over whether it should be developed and managed locally or centrally. The first UK SME information and advisory service (Small Firm Service) was not established until 1973. Managed by the Department of Industry in London, the Service gradually expanded to employ around 1000 advisors. The next major development was the launch in 1988 of the Enterprise Initiative which was again managed centrally from London. This offered eligible SMEs 50% of the cost of hiring consultants for specific business topics such as marketing, design and production systems. To obtain assistance, firms had to be both able and willing to pay their share of the costs. Both the Small Firm Service and the Enterprise Initiative were concerned only with established small firms. Both had disappeared by the mid-1990s.
Advice for start-ups became more widely available with the growth of the Enterprise Agency movement from the late 1980s. Enterprise agencies were local companies limited by guarantee generally funded by large corporations (from social responsibility budgets) with matching public sector funding. They used paid advisors some of whom were seconded from corporate sponsors. The system was further localised and fragmented with the creation of Training and Enterprise Councils (TECs) in 1991 responsible for labour force and SME training and Business Links (BL) in 1993, responsible for SME advisory services (Oztel and Martin, 1998). While formerly managed by government departments, these were essentially local or sub-regional organisations. Originally, the BL network consisted of 85 local agents which were supposed to be an area’s one-stop-shop (i.e. a monopoly). Each local agent consisted of a group of local suppliers (such as TECs, Chambers of Commerce, Enterprise Agencies) which remained more or less independent. Each BL developed its own priorities, eligibility criteria and mode of delivery. However, they were dependent on government for finance and expenditure grew rapidly.
Responsibility for Business Links transferred to the Small Business Service (SBS) which was set up in 2001 as an ‘arm’s length’ quango. With a view to creating a more effective and consistent system of advice, it re-tendered BL contracts nominally as ‘franchises’ under a national SBS brand. This resulted in a restructuring of BL agents into 45 across England. However, in practice around 2000 organisations continued to provide advisory services. These obtained funding not only from SBS but also a variety of other public sector bodies and the European Union. This produced a large number of generally local, small-scale, limited duration products and programmes with their own objectives, targets, rules and eligibility criteria. Over time the public sector system gradually absorbed the Enterprise Agencies making them subject to the same policy agendas, targets, reporting and accountability required for the receipt of public finance.
The SBS was quickly taken back into government and then abolished. With its demise, responsibility for BLs transferred to the Regional Development Agencies (RDAs) in 2007. Each RDA set about reforming its BL network to create a more consistent system within its region and to take forward its regional economic strategy. Each RDA developed a somewhat different system and approach. At the same time central government sought, rather unsuccessfully, to implement a simplification agenda to reduce the number of products and services on offer. In addition to this public sector system, organisations such as the Prince’s Youth Trust (young disadvantaged individuals) and PRIME (‘third age’ business founders) have advisory services targeting specific market segments using unpaid volunteers. A number of Regional Business Links have also recently begun to experiment with using volunteers as mentors. However, these are small-scale formal ‘public sector’ schemes with specific rules and client eligibility criteria targeting business activities such as growth, exporting or technology transfer.
While organisational change has been continuous, several characteristics of advisory services (throughout the UK) have been more or less constant since the early 1990s. Most advisory services, products and initiatives are relatively small scale and short term, targeting specific clients thought to be important for economic development, regeneration or social inclusion. Because the funding system tended to provide short-term project funding, organisations spent much time and effort seeking finance which often necessitated introducing something new and different under the guise of innovation. While almost all providers used paid staff, many were on short-term project specific contracts increasing the urgency of raising fresh finance. The majority of funders have their own policy agendas and objectives. These are rarely the provision of independent advice to all entrepreneurs and SMEs. In part reflecting the targeting culture, many providers seek to deliver a proactive service (rather than responding to all who wish to use it). Consequently, the UK does not have a ‘universal’ small firm advisory service. Given the tradition of using paid, essentially public sector employees, such a service is simply seen as too costly.
Criticisms and current proposals
The system was extensively criticised by academics (Bennett, 2008), policy advisors (IoD (Institute of Directors), 2010; Richard, 2008) and the present Government (BIS, 2010, 2011). It was seen as high cost with at least 30% of the expenditure going on administration. Specifically the present Government did not see the £145m per annum spent on BLs as value for money. Despite the costs, services were perceived to be ‘thin on the ground’ (IoD, 2010). It was argued relatively few SMEs chose to use public sector services which were perceived to be marginal compared to private sector sources of assistance. In part, this was because some were perceived to be low quality. In addition, it was argued public sector employees are not trusted and not the right people to advise business. Public sector services are driven by public sector policy objectives with the funders, not SME users, being the real customer. Consequently, services were not focused on user (i.e. business founders and SMEs) needs. Finally, the system failed either to obtain the economies of scale possible with a national, centrally planned and managed system or the potential benefits of a localised system with responsiveness to local needs and clients. Whether justified or not, such views influenced the present Government’s proposals.
The RDAs, which had become the major funder of services, have been abolished and BLs were closed in late 2011. With the demise of the RDAs and pressures on local authority budgets, service providers will be unable to access EU funding due to the absence of matched funding. The Regional Growth Fund, with a planned life of just three years, will not be a source of funding for SME advisory services and it is difficult to see a role for Local Economic Partnerships even if they see such services as a local priority (Bentley et. al., 2010). Along with their funding, many existing services will disappear.
The main positive proposals are for information to be provided by a revamped government website and telephone contact centre, a network of 40,000 experienced business mentor volunteers and a national programme of Business Coaching for Growth targeting the small number of firms which NESTA (2009, 2011) believe are responsible for most job creation. As noted in the White Paper (BIS, 2011: 9) ‘Government investment in helping businesses to improve will be focussed on accelerating the ability of firms with high growth potential to grow, creating jobs and wealth’. Business founders in receipt of the new Enterprise Allowance (i.e. the unemployed) will be given access to the network of mentors. There are several other targeted government initiatives such as Growth Hubs, Technology Centres and the continuation of some services such as the Manufacturing Advisory Service. However, it is hoped that advice will be offered (rather informally) by volunteers online and the private sector.
These proposals continue the policy of government services targeting those business founders and SMEs believed ‘worthy’ of support. The vast majority of business founders and SMEs are presumably expected to access the network of 40,000 mentors. The details and how to implement the idea are still under discussion. The network is to be supported by industry, existing networking groups and the British Bankers’ Association with some form of coordination provided by the Lloyds Banking Group. The intention is to bring the many (online) networking organisations into a ‘network of networks’ with email access via a national online gateway. The Government is appealing for companies to join the scheme and commit staff, presumably on a pro bono basis, as volunteer mentors. It also wants organisations such as the Prince’s Trust, PRIME and online networks such as Horsesmouth to sign up to the network and contribute their volunteers to the scheme (although nobody seems to have asked their volunteers whether they wish to be volunteered). How it will operate was still not clear at its launch in July 2011 when it appeared as a Banking Association network of 200 current and former bank employees. The practicality and sustainability of the idea has yet to be seriously considered or demonstrated.
A search of the Web currently shows organisations such as local chambers of commerce advertising for volunteer mentors to operate as part of the network of 40,000. These generally emphasise mentoring for the New Enterprise Allowance Scheme. There are also several networking sites ranging from social networking for business people (from which informal advice can be sought) to sites offering more formal online advice (sometimes free, sometimes for a fee and sometimes from anonymous advisors). A review of these sites found a wide variety of information, advice and mentoring being offered and sought including mentoring for such activities as passing the driving test. It is not self-evident that they are particularly useful for individuals wanting to discuss the feasibility of their business idea and how to take it forward. Nor is there any shortage of concerns expressed about such networks as a source of business advice. For example, blogs note that advisors are often trying to sell something, do not always respond to those seeking advice (which is not surprising given most ‘volunteers’ are busy people for whom being a mentor is not a priority) and there are concerns about quality assurance. If BL could not guarantee quality with paid employees, how is this to be achieved in a loose network of networks with little management (which appears to be what is emerging).
While not mentioned in Government White Papers (BIS, 2010, 2011), StartUp Britain was launched in July 2011. This initiative, supposedly private sector lead, is strongly backed and promoted by the Prime Minister as part of a ‘policy’ to stimulate entrepreneurship. It is to be a campaign for start-ups. It consists of a web portal for start-up information and an assistance package of up to £1500 for every start. While far from clear, it seems this is to be provided by its large corporate sponsors (e.g. free advertising, accommodation, etc.) who are currently ‘signed up’ to the initiative (around 60). It is not obvious how start-ups access this assistance or how it relates to the New Enterprise Allowance scheme. In contrast to the US White House version of the campaign, the initiative is not backed by government finance. Currently the web portal simply provides links to a multitude of existing sources of information and advertising for its sponsors (and the Prime Minister). It is not a source of independent advice, training or management assistance. It is far from clear how it will (or can) work or is likely to have a long-term future.
Discussion
A UK SCORE
The UK population is almost exactly 20% of the US population. Scaling the US SCORE to the UK population implies an organisation with around 2700 volunteers, 70 chapters and 160 outlets serving some 75,000 clients per annum. Allowing for fewer economies of scale and higher UK costs, it would have perhaps six paid full-time staff and an annual Treasury grant of approximately £1.5m. It would be an independent national organisation free of vested interests such as banking dedicated to meeting the needs of its clients (i.e. all entrepreneurs and SMEs wishing to use its services). US experience also demonstrates that to be successful, organisational structure and active management (rather than simply being left to informal unmanaged networks) is required. A central organisation (i.e. a HQ) would provide the necessary infrastructure to support (and help recruit) volunteers. Long-term commitment and organisational longevity is essential. Even in the UK, the performance of advisory services improves with organisational age (Bennett, 2008). Such an organisation, and in particular the required scale, could not be achieved overnight. However, the rapid expansion of the US SCORE in its early years suggests it should be able to expand reasonably quickly. Finally, a UK SCORE should not be a monopoly supplier; customer choice should be an important characteristic of any future system. Consequently, it would not be the UK system, but part of the system.
It is not necessary that all volunteers are retired. However, it should be individuals who volunteer and not employers (or other organisations) volunteering their employees. Furthermore, retired volunteers have advantages. They are not volunteering to enhance their curriculum vitae or to curry favour with their employer. They have more time, may be looking for something useful to do and are not affected by other competing priorities. From a wider economic perspective, their time has a lower opportunity cost and an under-used asset is put to use. Given the changing population age structure of the UK, there could be a growing supply of potential volunteers. In 2001 there were 12.1m people over age 60; by 2021 the projected figure is 15.9m and 18.7m by 2031. Life expectancy for those aged 65 is now approaching 80. With increased early retirement (often forced by the shortage of employment) just 40% of 60–64 year olds are in employment. Contributing via SCORE UK could be an attractive proposition for some experienced third age former executives, business owners and entrepreneurs.
Transferability
Successful implementation of a UK SCORE probably requires government to facilitate and fund its early development but then be willing to take a (very distant) back seat. This requires fundamental change in government attitudes towards, and policies for, the SME sector. Government, and the wider community interested in entrepreneurship and SME policy, must be convinced of the need for such an organisation. It could be argued, for example, that such an organisation is not required because it is only a minority of high growth new starts or NESTA’s vital 6% that matter for job creation and economic development (NESTA, 2009, 2011). However, at least for new starts, this view is open to question (Botham, 2010, Botham and Graves, 2011). Alternatively, it may be argued that it is not necessary because other sources of information and advice, such as online mentoring networks and private sector commercial services, are widely available. However, clients of start-up business advisory services continue to emphasise the benefits of face-to-face services while the majority of would be entrepreneurs are unlikely to be willing or able to pay (Beaufort Research et al., 2010). Ultimately, the need for a UK SCORE should not be assessed in terms of such public sector debates or criteria such as its job creation impact. Rather if SMEs choose to use its services and volunteers are willing to volunteer, then this should be sufficient justification providing the public sector financial input is minimal (as it should be).
While government needs to facilitate its creation and provide a small amount of long-term funding, it must accept SCORE as an independent organisation accountable to its clients (not government) and that its function is not to take forward government agendas but rather to serve all would-be founders and SMEs choosing to use its services. Governments would need to resist attempts at top-down planning, political interference, imposition of targets, the desire to claim credit and demands for public accountability and continual evaluation. A UK SCORE would need to be seen as outwith the public sector (after all it is unlikely individuals would wish to volunteer for an overtly ‘political’ organisation especially should it become seen as part of the public sector, but on the cheap). All of this requires fundamental change in government attitudes to the SME sector and approach to policy intervention. Persuading government to take such a back seat while providing some (very small) financial support is perhaps the major challenge to be overcome in establishing a successful UK SCORE. The size of the challenge is perhaps well illustrated by StartUp Britain, a supposedly private sector led initiative. Its website appears to be more a marketing tool for the Prime Minister than an organisation offering useful independent advice to SMEs.
The experience of the US SCORE demonstrates that financing such an organisation cannot be simply left to the private sector which is reluctant to fund core organisational management and services. Given the organisation would require longevity and long-term commitment, perhaps some form of upfront endowment is an appropriate method of funding. This would also go some way towards ensuring its independence as a service for all SMEs rather than just those government believe ‘worthy’ of assistance.
Concluding thoughts
The US does not simply leave SME advice to the market. It has an extensive publicly funded advisory service. However, SCORE demonstrates that the options are not simply the (commercial) market or the public sector. It operates via market principles, in which consumer (i.e. SMEs) have choice. Its experience also demonstrates the advantage of longevity (rather than continuous organisational change) with a focus on improving implementation and delivery rather than endless strategic debate over, for example, which SMEs to prioritise and target.
While in opposition, the Conservative Party commissioned the Richard Report (2008) to review the SME advisory system and make recommendations on its future. In addition to an extensive critique of the then existing system, it suggested a set of principles for the design of a future system. It argued a future system should be, inter alia, low cost and efficient (which requires a national system to exploit economies of scale), delivered by experienced business people, serve all SMEs (rather than only those the Government selects to assist), customer focused rather than seeing policymakers as the client and recognise the importance of face-to-face counselling. While it did not examine SCORE as a possible model, a UK SCORE could meet these requirements (which current government proposals fail to get close to meeting). Specifically, if successfully implemented, it would be an independent, low cost (at least as far as the public purse is concerned), client-driven advisory service delivered by experienced business people available to all would be founders and SMEs choosing to use the service. By making use of an under-used asset (i.e. retired business people), it would maintain a face-to-face advisory service. Furthermore US experience demonstrates that the impact and performance of a system using retired volunteers can be more or less comparable to, but much less costly than, one using paid staff.
US experience also suggests an approach which could reconcile the UK debate over, and tension between, whether the business advisory system should be centralised or localised (with consequent continual organisational change). A national SCORE organisation would offer the scale necessary to enable cost effective administration, training and marketing. However, its development and delivery of services would depend on local decisions, initiative, commitment and ownership. Depending upon individual initiative, its development could bypass the local political rivalries evident in the recent efforts to establish Local Enterprise Partnerships (Bentley et al., 2010). Comprehensive geographic coverage need not be achieved and there could be less concern about the spatial consistency of services. Within this context, a UK organisation could be created. Whether services spread to Northern Ireland, Wales and Scotland (possibly in competition with current public sector services) would depend on whether individuals in these countries are sufficiently interested in their SME sector to set up local chapters.
Given the current state of the business advisory system in England (i.e. essentially dismantled), government’s on-going efforts to develop a low cost system using volunteers, the extent to which these ideas are not adequately thought through and perhaps neither practical nor sustainable, it would at least seem appropriate to give serious thought to whether a UK SCORE could be a practical and desirable component of a sustainable SME advisory system. The time appears right for such an assessment. Not only does England need a new system, but as a concept SCORE is consistent with the Government’s Big Society idea. However, the aim here should be to design a cost-effective, sustainable SME advisory system, not to take forward the Big Society as a concept. Consequently, it would be unfortunate should an assessment of SCORE get embroiled in a wider debate over the Big Society and the ‘third sector’ (Alcock, 2010). SME advisory services can hardly be viewed as a key component of the Welfare State. Consequently, the development of a UK SCORE should not be seen as an attack on the Welfare State or simply an attempt to reduce government spending. Rather it should be assessed simply as a SME advisory service. It is more than possible US experience has been reviewed through rather rose-tinted glasses. Nevertheless, given its potential cost and other advantages, a closer look at the experience of US SCORE and the challenges the creation of a UK SCORE could face appears worthwhile. This should help avoid problems of ill-informed, incomplete or inappropriate policy transfer.
Footnotes
Funding
This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.