Best practices in supporting micro and self employed businesses
AREA SCIENCE PARK – ITALY
The AREA Science Park near Turin is the oldest and currently the largest science park in Italy. Formally launched in 1979, it has been a multi-disciplinary centre since 1982. Today it is home to over 70 organisations, including laboratories and research bodies both public and commercial, with a total of 1,700 employees. The initial aim of AREA Science Park was to provide a concentration of highly specialised research centres and to promote the creation of two international projects of global importance: UNIDO Centre for Genetic Engineering and Biotechnologies, and ELETTRA Synchroton Light Machine. The number of industrial research laboratories on site has increased since the early 1990s, and new enterprises have also appeared. By the end of 2001,
AREA hosted 16 national and international research institutes, 24 R&D laboratories owned by external companies, as well as 29 high-tech industries. In 1997, AREA launched an initiative designed to structure the activities of diffusion of innovation and technology transfer to SMEs in order to operationally promote and give visibility to the institutional role it plays in this area of services in the Friuli-Venezia Giulia Region. The initiative draws its strength from the structures AREA is able to exploit by being one of the leading science parks in Italy located within a system of enormous potential in terms of production of skills and innovation that can benefit the business world. A work programme has been drawn up for the initiative, with the aims to:
- exploit the output of research and promotion of its take-up in the business world;
- expand the area of collaboration between the world of research and that of the economy;
- build up technological development that supports enterprise competitiveness.
Major emphasis has been placed on activities promoting direct relations with companies through door-to-door services. Between July 1997 and September 2001, in total 1,500 businesses have been contacted, 539 of them have been visited and the number of interventions totals 533.
An analysis has recently been conducted to assess different aspects of the work carried out by the AREA Science Park:
- Socio-economic impact: The average company assisted in the implementation of innovation projects has 18 employees and a turnover of €2.28 million. Assistance in product innovation is much more important than in process or organisational innovations (in terms of money spent). On average, the turnover of the businesses assisted increased by 13% and jobs by 8%.
- Assessment of the factors determining acceptance and refusal of the innovative services: The most common reason for refusing the services offered by AREA is the fact that innovation is not a priority in the daily agenda of an entrepreneur. It therefore is important to keep in mind that promoting the diffusion of innovation also means intervening in the complexity of business, where success factors belong to more than one system. The AREA Science Park is working to overcome a negative attitude of entrepreneurs towards innovation by establishing a proximity between the consultant and the entrepreneur, using an understandable language, and by offering compatible proposals.
- Customer satisfaction analysis: This analysis has revealed that the most important strength of AREA is its good communication with the clients - a clear and effective language is spoken - and the availability of the staff is praised.
ALMI FÖRETAGSPARTNER - SWEDEN
ALMI Företagspartner (‘ALMI Business Partner’) is a public integrated support system very well known among small enterprises in Sweden. Its mission is to stimulate SME growth and development. Through its regional network, ALMI is in a position to adjust the support offered according to the needs of the enterprises in different regions. The parent company ALMI Företagspartner AB in Stockholm is 100 % publicly owned by the Swedish Department of Industry. ALMI Företagspartner holds 51% shares in the 21 regional ALMI companies, the other shares are held by the county administrative board and some of the municipalities the subsidiaries are located in.
The services provided by ALMI cover a wide spectrum of different support activities, such as information and advice, counselling, networking, but also financial support. In co-operation with the local government, ALMI provides various kinds of meeting places where entrepreneurs can get together and discuss business issues. When providing support to small enterprises, ALMI does not seek to compete with existing commercial services, it rather initiates programmes where there are no commercial alternatives available.
ALMI was originally formed some decades ago to exclusively promote the manufacturing sector. Although today it aims at stimulating growth and development in all sectors, ALMI is still known best among companies in the manufacturing sector (32 % of companies in the manufacturing sector have already had one, several or regular contacts with ALMI, compared to 16% of those in the services sector). ALMI applies a great variety of different tools to promote the services offered, but it also benefits from its background as a large, long-standing public institution. ALMI sees its role in being a partner of dialogue, follows a personalised advertising approach, thereby seeking face-to-face contact with entrepreneurs and initiating information seminars. Nevertheless, recently ALMI has also developed a concept for Internet publication that contains general information valid for the ALMI group but leaves the option to each district to produce material specific to their programmes and activities.
ALMI’s clients typically have fewer than 20 employees. ALMI meets with approximately 100,000 clients each year and of these, 24,000 become involved in extensive development programmes. ALMI also assists in the evaluation of approximately 3,500 new technology projects and products annually and financially contributes to about 2,000 innovations. In 1999 ALMI had a budget of € 60 million for its activities and a financial fund of €450 million.
Internal annual client surveys show that enterprises that have made use of ALMI’s services perform considerably better than their non-participating counterparts in terms of survival, turnover growth and the creation of sustainable employment.
CRECE INICIATIVE - SPAIN
Escuela Organizacion Industrial (EOI), the Spanish School of Management, has since 1989 been working in entrepreneurship and consolidation of SMEs. Since 1994, through a programme approved by the European Social Fund (ESF), the volume of EOI’s work in this area has risen sharply and in 2000 the Ministry of Science and Technology of Spain, as Ministry repsonsible for EOI, began to directly contribute to this line of support through the CRECE INICIATIVE (Creation & Consolidation of SMEs).
Currently, EOI gives 50,000 training hours per year in the field of entrepreneurship and consolidation of SMEs. The CRECE INICIATIVE, which uses different ways of awareness creation, is a programme that is divided into three stages:
- From the idea to the viable project: During three and a half months all entrepreneurs develop a viable project of an idea for a business. With the help of the lecturers-consultants, the entrepreneurs conduct an exhaustive and customised study of each case and at the same time they acquire the basic tools for running their firm.
- From the viable project to the opening of the firm: In this next stage, a team of lecturers-consultants monitors the projects and assists the entrepreneurs in setting up their firms.
- From the opening of the firm to its consolidation - REDEPYME: With the firms now operating, the third phase, called consolidation, begins.
For this, REDEPYME has been set up as a network of firms to encourage consolidation and co-operation among the operating firms. This network currently has more than 2,600 member firms of diverse business sectors throughout Spain and is managed by EOI. In the group of people trained in the scope of the EOI programmes the response to any activity that Escuela Organizacion Industrial promotes (seminars, counselling, web site, congress, etc.) is very high. Depending on the activity developed by EOI, passive visibility is combined with an active information and awareness campaign for local groups of entrepreneurs and SMEs in two ways, media (press, radio, posters, local TV, etc.) and local advisors (SME associations, town halls, local partners, etc.). Passive visibility is achieved through Redepyme´s web site (www.redepyme.com). This web site is linked to the main Spanish web sites (Vodafone, Auna, etc.), which enables companies to find a wide range of tailored services (such as counselling, design of its own web site, training on-line, newsletters, EOI information, etc.).
Statistics show that the majority of applicants in entrepreneurs’ programmes learned of EOI’s activities through the press (62%), and only 20% through other ways (local advisors, Redepyme´s web, etc.). People who owned a firm or were sole proprietors knew EOI’s activities mainly through their local advisors. EOI knows that nowadays the best way to make SMEs aware of their need for support is through their local advisers. Consequently, EOI is putting strong efforts to the selection of suitable advisers.
Contact: EOI – Escuela de Negocíos, Mr. Luis Sánchez Henríquez, Ciudad Universitaria, Avda. Gregorio del Amo, 6 28040 Madrid Tel: +34 91 349 5630 Fax: +34 91 554 2394 mailto://LuisSanchez@eoi.es Internet: http://www.eoi.es
FAST GROWTH PROGRAMME - IRELAND
In 1983 the Dublin Institute of Technology set up the Project Development Centre (PDC). Among others, the centre currently runs two enterprise programmes and the Small Enterprise Seed Fund. Its innovation and training programmes aim at assisting indigenous Irish companies in their start-up and development phase, the PDC has been very active in supporting small enterprises since the beginning of the 1990s. The PDC method is one of facilitation – entrepreneurs are helped to draw from their collective experience, focus on priorities and apply their skills in a way that allows them to confidently take key decisions in their business. PDC applies a methodology that specifically focuses on the needs of the smallest businesses with regard to tackle well defined barriers to enterprise growth (such as insufficient management skills, inadequate planning or problems with accessing capital).
The ‘Fast Growth Programme’ is exclusively targeted at small enterprises (with 10-49 employees) that have been in business for 3-10 years and are intended to grow. The programme lasts for one year and comprises three complimentary elements:
- interactive workshops,
- individual strategic business counselling and
- intensive banking and investment counselling.
An enterprise that has participated in that programme has to develop a strategic plan for the following years and has access to a network of growing businesses. The ‘Fast Growth Programme’ basically addresses small businesses in the manufacturing and services sector (especially internationally traded services and services to industry) and is offered in Dublin. The services are provided to the enterprises free of charge.
Initially, this programme - established in 1996 as a pilot scheme - was funded under the Small Business Operational Programme. An impact study that has been carried out among the 47 participants of the first three years confirms the success of the ‘Fast Growth Programme’, as it indicates that since committing the programme these enterprises have, on average, increased their turnover by 150 %, raised profits by 300 % and doubled their employment.
MEDIA TAMPERE – FINLAND
In Finland, as well as in many other European countries, public authorities have been outsourcing business support with determination in the last couple of decades. This has mainly been achieved by setting up development companies specialising in the provision of support services. Media Tampere, established in December 1998, is such a company, but in a very special way, as the City of Tampere owns less than 20 % of the company’s shares. Media Tampere is situated in the Finlayson area/Tampere, which is the second largest urban region in Finland and has a very broad development role which goes beyond the regional level. The company has also been designated ‘National Centre of Expertise’ by the Finnish Government.
Media Tampere mainly operates with small businesses from the media and IT sector to provide integrated business support in the form of development projects, consultancy and incubation activities. Support provision is found to be most effective through company networks, but services provided by Media Tampere also address businesses in an integrated manner, through the ‘mobile one-stop shops’. Media Tampere and the programmes the company is engaged in work with different methods of support provision. In the following, three cases where the regional integration of support services has proven to be an efficient way of delivering services for small businesses are presented:
- eTampere: This regional framework programme is to develop the Tampere region into one of the world’s leading IT regions. Business development is in the core of the programme and a main business development instrument is eAccelerator, that works in chronologically advancing stages, starting from the marketing and training stage; to company evaluation; pre-incubation stage; incubation stage; and finally targeting the stage of global growth. For each stage of development, the incubator provides sufficient know-how and suitable financial instruments.
Visibility of the services of this Accelerator is created through a nationwide business idea competition. All participating companies get full evaluation of their business plan and the best are selected to participate in this development programme. In the first round over 80 business plans were evaluated.
- Craftnet: Craftnet is a national programme to prepare the way to electronic business for craft enterprises. It offers craft enterprises tailored training and coaching in on-line business activities by making use of different guidance methods, such as classroom teaching, business-specific instruction and virtual craft workshops on the Internet. The main parts of Craftnet’s services are mobile, i.e. they go to the entrepreneurs at their working places. This is made possible by the web service that hosts all guidance materials and company profiles. 150 craft enterprises have so far joined the project.
- Intelpolis: The Intelpolis project currently aims at the development of a competence centre based on company networks in the Siikalatva region (an Objective 1 region in central Finland). Sector groups of enterprises have been brought together with educational establishments and public authorities to plan regional support mechanisms together.
The main source of support is seen to lie in company networks and the project develops service production schemes for such networks. Three company networks with over 80 participants have been brought together so far. These networks operate autonomously and get technical support from the regional development agency which is co-ordinating the competence centre.
Contact: Media Tampere Ltd., Mr. Petri Lintula, Satakunnankatu 18 A, 33210 Tampere. Tel: +358 3 316 7870 Fax: +358 3 316 7871 mailto://email@example.com Internet: http://www.mediatampere.fi
PLATO - BELGIUM
The idea of PLATO was conceived in the Turnhout region in Flanders, Belgium, in 1987, by the regional economic development organisation Strategic Planning Team for the Kempen (‘Strategisch Plan Kempen vzw’). Since PLATO´s inception, this region has seen significant small business sector development through the PLATO network. In 1996, the Plato concept was transferred to other countries by an international steering committee and has been registered to ensure the maintenance of standards and quality.
32 PLATO business networks have so far been established in various regions of six countries of the European Union (Belgium, Denmark, France, Germany, Ireland and Sweden) plus Slovenia. These networks involve nearly 7,000 SMEs and 500 of Europe’s largest companies. A new PLATO network in Spain is currently under development.
PLATO is a two year SME development programme aimed at helping owner-managers to develop a broad range of management skills, business linkages and strategic visions necessary to develop their enterprises. The participating enterprises typically have 3-50 employees and having completed the start-up phase, now face the challenges of enterprise growth. A unique aspect of PLATO is the network established for two years at local level between two large enterprises (‘parent companies’) and 10-12 small enterprises (‘participant companies’). These types of networks are owner-manager focused and seem to be the appropriate answer to their immediate problems. Support supplied through PLATO is delivered in the following way:
- The network model provides a highly flexible and broadly-based local framework of opportunities for advice (knowledge network), assistance (professional network), business contacts (co-operative network) and commercial opportunities (commercial network).
- PLATO seeks to overcome the traditional barriers to management training encountered by the small business sector by the provision of low cost, relevant and accessible support.
- The programme is business-led and responds to the circumstances of the local commercial and industrial environment.
- The group development approach is essential to overcome the isolation traditionally faced by owner managers.
- The programme recognises the reality of the learning and implementation stages of business development as a long term process and focuses on sustained involvement of the small businesses.
- Finally, all activities within the programme are locally delivered and administered. The proximity of the companies maximises the potential for business linkages, local training opportunities and collaborative activities.
Studies carried out by the University of Antwerp/SME Study Centre in Belgium show that companies that have completed the programme in Belgium experienced an average growth of 16% p.a. in the number of employees and 21% p.a. in turnover during the two years duration of the scheme. A study carried out in Ireland by Genesis Consultants shows that in the first Irish Programme (1993-1995) participants experienced a 15% increase in the number of employees and a 34% increase in turnover. In the Netherlands, a study by the European Centre for Work and Society shows that participants in the first Dutch programme (1994-1996) experienced a 14% increase in the number of employees and a 7.5% increase in turnover.
It can be said that through a broad range of support within a network structure, PLATO builds a framework which aims to effectively and practically overcome many of the inherent barriers to management development opportunities within the small business sector. The programme provides a wide range of activities and a unique opportunity for successful interaction between large firms, which develop owner-managers’ personal skills and is one of the most effective tested and proven examples of business networks in Europe.
REDE - PORTUGAL
The programme Consulting, Training and Support to Small Businesses ('Programa REDE') is one of three similar sub-programmes approved by the Portuguese government in 1996 in order to stimulate training and development of human resources in small enterprises in the course of its ‘SME training programme’.
The difference between this and other SME support services in the field of training is that ‘Programa REDE’ is specifically targeted at entrepreneurs and workers in small enterprises (with less than 50 employees) in all sectors of economic activity and in the growth phase. As earlier programmes aimed at improving the professional qualifications of entrepreneurs and employees in Portuguese SMEs showed only moderate success, this tailormade programme has been developed with special emphasis on non-conventional training methods and a specific infrastructure to actually reach the smallest enterprises. ‘Programa REDE’ has the ambitious aim to increase the competitiveness and growth of micro and small firms through providing appropriate managerial and training resources based on their real needs. The idea is to help the smallest enterprises to fill a number of gaps:
- improve management quality,
- adopt new methods of production organisation,
- increase the usage of IT resources, and
- take advantage of new markets.
Strategic and operational consulting services are made available to the smallest enterprises through the assignment of a seasoned professional on a part-time basis, a range of training programmes to managers and workers, and the subsidised placement of a junior university graduate for a period of one year. The support service is operated by the public National Vocational Training Institute (IEFP) and its public and private partners that also integrate the small enterprise into a network for experience exchange with other participants. All these services are offered to the participating enterprises free of charge, except the salary of the junior university graduate, which is partially subsidised (75%). On average, the programme lasts for about 13 to 15 months and starts with a situation analysis conducted by the senior expert and the preparation of an improvement plan designed to deal with the weaknesses and threats on a sustainable basis.
The plan is then implemented during a full year and a final evaluation is conducted at the end of the programme. Small enterprises are also encouraged to further engage the trainee manager. The general merits of the programme, which applies quality standards such as certificates for its consultants, can be seen as follows:
- the entrepreneur’s management skills in very small enterprises are developed; _ the model has proven very effective especially in very small enterprises;
- the in-company support has proven to be effective for organisational problems in very small businesses;
- the junior university graduate strengthens the company structure;
- a network is established between entrepreneurs, consultants, trainers, partners and institutions. From 1996 to 2001, about 1,200 small enterprises have received support from ‘Programa REDE’ and the service has been well accepted by its participants, 40% of which had never utilised any support service before. 41% of the participating enterprises are family enterprises. The average participating enterprise has 20 employees, approximately 28% of these have been engaged in the training programmes.
More than three quarters of the university graduate trainees have been further employed by the small enterprises and the new jobs created represented on average 8% of the work force. 94% of the participants state that they would recommend REDE to other entrepreneurs. In order to assure the delivery of high quality support, a combination of several quality assurance instruments is used for the different services provided through ‘Programa REDE’. These instruments range from general and self-developed standards to regular evaluations and follow-ups with the participants.
Contact: Institute of Employment and Vocational Training (IEFP), Mr. José Sousa Rego R. Xabregas, 52 1949-003 Lisbon. Tel: +351 21 861 4510 Fax: +351 21 861 4619 mailto://firstname.lastname@example.org Internet: http://www.rede.iefp.pt
TOP - NETHERLANDS
The TOP (Temporary Entrepreneurial Places) is a ‘bottom-up’-programme which was established in 1984 at the University of Twente, when Prof. H. van den Kroonenberg began to support starting entrepreneurs in his own research group and at his own expense. The programme was subsequently supported by the European Structural Funds.
The philosophy behind TOP today is to provide a programme that closes the gap between basic research, applied research and SMEs, as it has been noticed that there is a need to promote the transfer of knowledge from universities to smaller enterprises that cannot afford their own laboratories. The objective of TOP originally was to encourage graduates of the university to start their own knowledge-based companies. Because of the success of the programme this objective has gradually been extended to staff members, graduates from other universities and polytechnics and people from industry.
Knowledge-based startups can be in the TOP programme for one year. Prerequisites for entering the programme are having a business idea that matches with the interest of staff members in one of the research groups of the university and a consistent business plan. Advice for the latter can be obtained from the project manager. Upon acceptance in the programme, the new entrepreneur can utilise facilities and is provided with support in the following areas: incubation (an office space in the research-group at the university, secretarial support, laboratory facilities), a scientific mentor (usually the member of the research group that decided to take the entrepreneur on board) as well as a course in ‘becoming an entrepreneur’. Besides that, financing is also provided in order to allow the new entrepreneur to fully concentrate on his product/business.
During the TOP year the TOP-commission monitors and gives advice, a midterm review is held after six months and an exit interview is held at the end of the TOP year. The University of Twente also fosters entrepreneurship by being a stakeholder of the Business and Technology Centre (BTC-Twente), a combination of incubation and innovation centre, where former TOP-participants can settle after their year in the programme. Moreover, the university participates in the Foundation Business & Science Park and is a shareholder of Innofund, a venturecapital fund for high-tech companies in the start-up and growth phase. All these efforts have also attracted companies from other areas to settle in the good entrepreneurial climate around the University of Twente and led to the establishment of a growth market for technological products.
(Potential) entrepreneurs in the technology sector are well aware of the possibilities offered in Twente. The TOP-programme is rather successful and has also led to the creation of networks (Technology Cycle Twente) and clusters in which former participants spread the innovative spirit and further promote TOP. But TOP is not only promoted by the positive impact it has on the region of Twente: promotional instruments such as advertisements in newspapers, technological periodicals or journals as well as information on the programme have helped to raise awareness of the programme among potential participants.
The programme achieved a success rate of 80% and has led to the direct creation of 1,400 new jobs in the region of Twente since its inception. Today, 70% of TOP-starters come directly from the University of Twente and 30 % are attracted from industry/other regions. As a result of TOP and its impact, the number of spin-offs at the university of Twente has grown from less than 50 to more than 450 in the last two decades.
Contact: University of Twente, Mr. Jann W. L. Van Benthem, PO Box 217, 7500 AE Enschede. Tel.: +31 53 489 4278 Fax: +31 53 489 2000 mailto://email@example.com Internet: http://www.utwente.nl/projecten/TOP