Growth Hub Summary Document This document has been prepared to assist potential partners and providers to the Growth Hub to understand the objectives, principles and activity of the Growth Hub. Overview Liverpool City Region LEP and partners are committed to addressing four issues in the current business support landscape: Lack of clarity and consistency across the City Region as to where to go for independent business support. The large number of business support offers and services that businesses often find confusing, difficult to navigate and of minimal benefit to them. The need to ensure that publicly funded business support is responding to need, market failure and is effective not crowding out private sector providers and dampening local business willingness to invest in higher quality support. The need to ensure that publicly funded support for business is aligned with long term strategic objectives and delivers economic impact. The Liverpool City Region is committed to developing a new more strategic approach to business support with three objectives at its heart: Simplification: simple to access help which allows businesses to quickly find the support which best fits their growth needs. Commercialisation: making best use of the wide array of private sector suppliers of business support and aligning public sector interventions round the commercial principles of this market place. Coherence: targeting investments of public money where it can best contribute to strategic economic objectives of the Liverpool City Region economy. 1
Liverpool City Region Growth Hub Objectives The Growth Hub will not primarily be a direct supplier of services to businesses. Instead it will have a crucial interface role operating in the space between suppliers, businesses and strategic partners. The Growth Hub will have four objectives: 1) Simplify routes to support: the Hub will provide information to businesses on a range of support options in one easy to access location. This will be delivered on-line and face to face. 2) Encourage business to take up support: the Hub will promote business support generally and specific priority services to ensure businesses understand the help on offer and the potential growth benefits it can unlock. 3) Help businesses understand their specific support needs: the Hub will offer a review service to help businesses explore the challenges they face and identify the best long term package of assistance to help them grow. 4) Oversee public investment in business support: the Growth Hub will have a privileged position advising the Liverpool City Region on how public money should be invested in business support services and (where required) will administer subsidies for business support. 2
Growth Hub Guiding Principles A great deal of thought has gone into the design of the Growth Hub. Liverpool City Region LEP has looked at the approach adopted by other LEPs, reviewed national business support policy and research and drawn out lessons drawn from partners own experiences in the City Region. A set of principles emerged during the planning phase which will guide what the Growth Hub does and how it will operate. Simplifying routes is the key: the Hub needs to make it easier for more businesses to access appropriate support and at the same time must avoid complicating the market-place. Guiding not controlling: some businesses and services can operate effectively without additional help. The Growth Hub should not be at the centre of all business support engagements. Client choice is critical: businesses must be free to work with support providers which they trust and value, the Growth Hub s role is to offer businesses informed options wherever possible. Clarity between support and sign-posting: Growth Hubs which also deliver support as well as providing a gateway service need to be transparent on these two roles to avoid being accused of not being impartial. Targets can distort behaviours: contractual arrangements and the separation of responsibilities work best when delivery partner organisations do not need to share/compete for clients and assists. Flexible approach to understanding needs: an objective check to assess support needs can help guide businesses to the right support but risks being a barrier to uptake if it is too onerous and/or a pre-requisite to accessing support. Gateway marketing needs to be complementary to existing Hub organisations: as the Hub will comprise existing organisations and not the creation of a new one the Hub brand needs to be clearly secondary and umbrella rather than competing to avoid confusing SMEs without adding value or boosting levels of uptake. Service providers should always be able to promote their own services: lead generation most naturally sits with service providers as they have existing resources and insights, as well as contractual incentives to generate demand for their services. Growth Hubs should avoid trying to control all marketing and client engagement activities where it is demonstrably working well but can sensibly and cost effectively stimulate demand and usage. Client intelligence is a valuable commodity: sharing contact information and support needs between the Growth Hub and across service providers can help the market work more effectively but there will be natural resistance (especially from commercial operators) to releasing market valuable intelligence. A shared CRM platform is critical but the Growth Hub needs to be realistic about what information will be shared and needs to ensure partner s commercial information is protected so as to build confidence in information sharing arrangements 3
The Hub in Summary The Growth Hub will not: Create a new business gateway organisation Instead it will: Enhance/Promote existing entry-points Create or control the market for business support Deliver direct business advice Compete with commercial deliverers Rush to fill all gaps in provision Develop a dominant new lead brand identity Be the sole lead generator for commercial and other support services Over-reach too early Co-ordinate & animate suppliers and inform commissioners of market need & opportunity Provide gateway support, particularly information, diagnostics & brokerage Refer to commercial services and only provide support where there is market failure Identify market failure & assess strategic fit before intervening Operate brand as umbrella/family signifier or kitemark eg Fair Trades approved Allow providers to promote their own services and promote/refer to them where appropriate Progressively build trusted collaborative working relationships 4
The Hub s Role and Services 1) Gateway Services to SMEs Services on Offer SMEs in the Liverpool City Region will be able to approach the Growth Hub and receive a combination of the following services: Information: on the range of business support services, including promotional material setting out the general benefits of business support. Advice Finder: an online database of services to help SMEs understand what is available. www.advicefinder.co.uk Diagnostic: help to better understand their immediate and longer term support needs via a review of business aspirations, market opportunities and operational challenges. Brokerage: handholding guidance to agree a package of help from a business support service, including help to secure subsidised support where available and eligible. Scope of Service The Growth Hub will offer its Information and Advicefinder service across the full spectrum of support services. Its diagnostic and brokerage role will be more concentrated on the following business support service areas: Clients Investment readiness: equity investments, loans and grants to help business grow. Innovation: support to develop new products and implement new processes including undertaking R&D, help with IP protection and market testing. New Markets: guidance to help SMEs expand and diversify their customer base including into new markets inc. exports, supply chains etc. Sustainability: assistance to new and small businesses to improve their survival rates including help with business planning, financial control, pricing, management, sales etc. Skills/People Resources: initially concentrating on services to enhance businesses management and leadership capacity to unlock growth, but in due course exploring scope to broker in support around staff retention and training for employers seeking to up-skill their workforce. The Hub will support all existing and pre-start businesses but will apply varying levels of intensity of support according to need and impact. This will include: Growth Potential Businesses: the Hub will endeavour to drive up the take-up of commercial advice among businesses with the appetite and capacity to grow. Growth businesses will need to commit to expanding their turnover or employee numbers 5
Sustainable Businesses: The Hub will seek to help those businesses that need or present for support to improve their sustainability and develop the foundation for future growth Pre-Start and Start-Ups: to boost the rate of creation of new businesses and support during the early stage of establishment of the business SMEs in priority growth sectors ie Low Carbon Economy, Knowledge Economy, Visitor Economy and SuperPort will be an important focus of the Growth Hubs client base but all sectors will be catered for. The Hub will work with a broad range of agencies to maximise awareness of the services it offers. 2) Facilitate Greater Take-Up of Priority Services The Growth Hub will offer business support providers, sector agencies and local economic development partners with a gateway service for SMEs that will: Scope Boost demand for business support: the Hub will offer a forum to business support providers to explore opportunities to better promote services and undertake joint campaigns which make use of existing events, channels and networks. The Hub will also provide SMEs with information on services and the advice finder facility. Generate flow of referrals: the Hub s brokerage role will generate leads and opportunities for the business support providers operating in the city-region. Develop tools to understand support needs: the Hub will develop a Customer Relationships Management database which will allow the Hub partners to better map demand/need/use of business services and co-ordinate efforts to reduce duplication. The Hub will also establish a framework for diagnosing businesses support needs and protocols for capturing benefits from support and offering on-going after-care. Gather intelligence on SME growth and support needs: the Hub will use its central strategic role in the city-region to assemble analytics and insights into market opportunities and sector threats facing SMEs in the city-region. This will help service providers engage in better plans for future service provision. Subsidy for Priority Services: the Hub will seek to subsidise, where required and subject to funding, the cost of critical commercial support services. The Hub will provide match funding up to 35% of total costs to help priority SMEs secure the intensive and sometimes costly help they need to realise their growth ambition. The Hub, whilst being available to all, will focus Support on Local and City-Region strategic growth priorities. It will endeavour to boost the supply and uptake of a range of services including: advice information finance networking training consultancy 6
mentoring and, coaching premises 3) Strategic Advice to Partners The Growth Hub will provide the City Region with: Intelligence: on market trends in business support, flagging up gaps in supply and opportunities to help grow the economy. Advice: on initiatives and interventions needed to make the market work more effective and how to commission new services/interventions. The Growth Hub s advice on intervening in the market place will be: targeted upon elements of the market where there is demonstrable market failure and designed to ease that failure so the market begins to work more effectively, ideally in due course, without public intervention. The Growth Hub will adopt a six step framework to help guide decision-making on services. Figure 1.2 Six Step Framework The Growth Hub s advice on how to intervene in business support will be guided by the following principles: Improve Access First: the cheapest and least invasive means of encouraging demand and supply is to make it easier for SMEs and suppliers to better understand what is out there and how to make use of it. Free Of Charge Only By Exception: demand for a service is best demonstrated when businesses contribute financially. Making a payment also builds buy-in and demonstrates a clearer commitment to growth. Subsidise Existing Support where necessary: where effective operators with capacity, market profile, and customer bases, delivering services businesses want and need, already exist, encourage and if necessary incentivise more supply and demand 7
Build New Supply Only As A Last Resort: new organisations, services and brands should only be introduced where there is no cheaper or more effective alternative. 8
1.2 Growth Hub Structure Growth Hub Structure The LCR Growth Hub will have a light touch core Growth Hub, managed and coordinated by the LEP, with six local hubs managed by partners that have a strong visible presence and a significant reach into the local business communities. 9
Growth Hub Roles The Hub s roles will be: brokerage service delivered by a small team of business brokers to help SMEs select appropriate advice and support services commission and maintain an online business advice matchmaking service (advicefinder.co.uk) work with providers of support to ensure their services are visible and accessible to businesses and to generate a flow of referrals to and from the Hub design and promote a simple business diagnostics tool to quickly assess SMEs support needs in a consistent manner commission and maintain a shared CRM system for the Growth Hub and subsidised services Local hubs will use agreed diagnostic tool and advicefinder.co.uk alongside their local knowledge to broker support to local SMEs Local Hubs where appropriate, will deliver support directly to SMEs from their existing portfolio of services. after-care service which includes evaluation of initial support (to generate lessons and intelligence) and a review of ongoing support needs administer a subsidy where needed to reduce the costs of advice for eligible businesses and priority services. NB This role may involve a clearing house function to administer SME contribution as match funding for some support services provide the Liverpool City Region LEP with intelligence on evolving business support needs, challenges and opportunities, and offer intelligence and insight into what has worked locally co-ordinate the local hubs and ensure consistent standards are applied. Although SMEs can approach the core hub, it will sign-post SMEs to their local hub unless it is for a specific service is provided by the core. The local hubs will provide the same, high level of service based around a simple business diagnostic that ensures clients are receiving the business support and funding they need and that will add most value to their business. 10
Staff and Performance It is envisaged that the partners in the Growth Hub will employ the Growth Hub Brokers for each Local Hub, funded in 2015/16 by the LEP with funding from BIS. These may be existing staff from within those organisations, provided they meet the Broker Criteria, or may be recruited into the roles externally. Those organisations currently providing support to businesses in the local areas may also choose to provide additional people resources and there may also be the opportunity for additional ERDF Funding. Partners funded to be part of the Growth Hub will be required to sign up to contracted Service Level Agreements as to how they operate the Growth Hub, referrals, reporting etc. 11