15 minutes with… Bev Hurley, chair, Institute of Economic Development
Bev Hurley is the chief executive officer of the YTKO Group and was recently appointed chair of the Institute of Economic Development. She talks to New Start about what’s needed for a thriving entrepreneurial economy.
On the UK’s obsession with start-ups:
My company, The YTKO Group, is focused on helping small businesses to grow and scale. In our public sector work, we run a number of services, including Outset, Enterprising Women and Get Set for Growth, and have supported 15,000 businesses over the last decade. I’m always shocked by the failure rate of businesses in the UK, where only 60% survive to three years, and within micro businesses and disadvantaged areas that failure rate anecdotally is a lot higher. To me that is a waste, and we’ve proved that it can be significantly improved. Also small businesses in the UK are very small, with 96% having fewer than 9 staff and 75% are sole traders. We are a nation of small shopkeepers and that’s fine, but we must have services that support businesses up the growth ladder if they have that ambition – and many do.
On creating a more resilient small business sector:
The UK is one of the best places to start a business but the point is, will they survive and thrive? For stronger local economies and wealth creation, we need to improve business survival rates and better education about the support that small businesses need at each stage of the journey. It’s easier for government to talk to Glaxo than to talk to 5000 small businesses, but a thriving and successful entrepreneurial economy is vital, and we need to do more to build significant world class companies.
The key challenges we consistently come across, and help SMEs to overcome, are access to customers – generally we’re not good at sales – and access to finance. We also need to be much better at educating new start-ups on the realities of commercial success, and to improve the quality of publicly-funded business support.
On solving the under-representation of women in small businesses:
Women are hugely under-represented in SMEs, where four out of five are owned by men. That’s a massive source of untapped economic potential as not enough women are starting businesses and therefore there are fewer growing them. There are many reasons for this, including the fact that women choose a good quality of life and don’t want to work 18-hour days, have less capital, and tend to be more cautious around risk. Women don’t need ‘special’ treatment but they do need a different approach. I think that business support organisations need to be assessed on their level of engagement with female entrepreneurs. If less than half of their client base is not made up of female-led businesses, then questions need to be asked.
On inclusive growth:
Partnership across boundaries is needed if we are to align social and economic policies, but currently lots of organisations are still operating in silos. Collaboration is still a challenge and silo thinking obstructs the sharing, and adoption, of best practices, of innovation from outside. I’m not convinced local authorities and local economic partnerships really understand how to create resilience and inclusivity, and the third sector itself is very fragmented. I think economic development professionals have a significant role to play in driving forward a collaborative cross-boundary approach to address these major issues.
On challenges for economic development:
There is a really challenging time ahead with the impact of Brexit, with councils having to raise funding to offset cuts and increased pressure on education and health. Economic development is not a statutory function in the UK and the profession is under pressure. We need to make a better case that economic development is an investment, not a cost. The whole field of economic development has broadened and is now much more about partnership and about understanding the macro as well as the hyper-local. My advice for those working in economic development is to hold fast to what they know to be a good thing and keep making the case for sound economic development policies despite the challenges. If they give up I fear the worst.