Design a local entrepreneurship development strategy.
A clear and mutually agreed strategy for entrepreneurship aims to formalise the aspirations and co-operation of key partners locally. Such a strategy should be the product of public debate, deliberation and consensus building amongst relevant local institutions, as well as consultation amongst relevant communities, and seek to develop a comprehensive and integrated approach in enhancing entrepreneurial activity. Translated into an action plan clear priorities and roles for partners, timescales and resources can be defined. It might be also relevant to include a discussion about the role of the place in some wider region with a certain economic relevance, also beyond administrative borders.
Tailor policies to local and regional contexts.
A more proactive, future-orientated approach to entrepreneurship promotion, ways to increase policy co-ordination and local tailoring of policy and programmes should be fostered. Given the potential this creates for policy divergence and diversity, efforts will be required to maintain co-ordination and integration between different institutions working at different geographical levels.
Establish clear priorities.
An entrepreneurship development strategy, local institutional framework and a systematic approach to locally-oriented policy provide a means for identifying key priorities. A clear focus can help local institutions to be more discerning about the quality of entrepreneurship, potentially seeking to encourage and support those entrepreneurs and businesses with growth and sustainability potential. Priority policy areas can also be targeted at key needs and/or bottlenecks locally, for example developing micro-finance instruments together with local financial institutions to address the weak capital base of local SMEs, and extending current knowledge transfer activities to encourage innovation in SMEs.
Adopt and further expand the application of the policy cycle methodology.
Policy and programme development at all governance levels should be thought of as involving four linked stages – problem definition, design, delivery and evaluation. These stages underpin a potentially stronger and more systematic approach to entrepreneurship policy. Linking target and objective setting in different programmes and initiatives is further a key ingredient of building sound local development strategies. The introduction and further expansion of systematic evaluation efforts of programmes and initiatives is a valuable source of information that helps to integrate lessons learned and findings about framework conditions for delivery success in new programme and initiative development. A participatory evaluation of previous and on-going programmes and projects, involving major local and regional stakeholders, can help to create an inventory of experience made and helps to align different strategies and action plans.
Identify and segment categories of enterprises.
Growth companies can emerge from all sectors. Programmes of advice, support and funding should be tailored to the growth needs and growth prospects of different segments of companies. This process is about recognising new business plans and company features that can form the foundation for business expansion and lead to growth, and then identifying and segmenting the companies that display such features. It is crucial that transparent categorisation procedures and objectives following clear criteria are applied. A well functioning network of business support organisations and industry experts can be used to prepare and regularly update a detailed inventory of local companies, their growth intentions and orientations.
Expand technology support and activities.
SMEs in OECD countries, given cost structures and others, increasingly need to compete on technology or other added value features that give them competitive edge on international markets. The establishment and further development of external R&D services could help local SMEs to innovate. It might be that the Districts perceive themselves as too small to create by themselves the innovation support infrastructures necessary for SMEs. In this case, collaboration with neighbouring Districts or thematically related higher education institutions should be sought.
Foster institutional innovation. Institutional arrangements characterised by high levels of integration, co-operation and transparent co-ordination are likely to positively influence entrepreneurial development and firm growth.
It is important to strengthen and increase co-ordination and integration in functional policy areas. Inter-ministerial working groups can contribute to further flag entrepreneurship development as priority and foster integration and co-operation. This process would also contribute to the identification of hindering framework conditions that need to be addressed and to how procedures related to entrepreneurship development could be streamlined. At local level key local partners may benefit from more formalised joint working, for example using partnership and network models, which may also go beyond administrative borders.
Co-ordination and co-operation mechanisms to bundle local development efforts of existing networks.
Participation in policy and programme design could be increased by bringing together different networks. The establishment of a sounding board has proved to be a useful instrument to receive feedback on effectiveness and impact of entrepreneurship policies and measures. Further, effective co-ordination mechanisms and the existence of social capital can be market as a strong local development asset.
Keep existing networks open for new members.
The involvement of other actors should be sought in order to address new issues such as provision of apprenticeship places, business succession and rural tourism development. Existing local initiatives should also seek a stronger involvement of local governments and their agencies. This would help to further streamline procedures related to business registration and administrative matters depending from local authorities.
Increase international networking efforts.
Active involvement in international networks would help to contribute to the internationalisation of the local economy. It is important to expose leading local development actors to their peers in other jurisdictions and to establish working networks with the people involved. This could be tackled through active involvement in international networks of economic development practitioners such as the European Association of Development Agencies (EURADA), which is currently planning to launch a European network of universities and regions, the International Economic Development Council (IEDC) in the US, the European Business Angels Network, and the National Business Incubation Association as well as the activities of the OECD LEED Programme.
Increase private involvement in infrastructure development.
Whilst public subsidy and support may continue for enterprise promotion in East Germany for a long time to come, it is strongly recommended that private finance is introduced into the real estate component of the enterprise strategy as speedily as possible. In addressing future needs of companies for a greater diversity in quality and size of physical innovation infrastructure, private high-tech facility developers and managers should be consulted, at an increased level of current involvement, and potentially attracted to develop and operate space. For the future viability of these facilities it will be important to see the real estate as an asset capable of producing a commercial return, against which maybe also further funds could be secured. Successful firms will need to develop rapidly in the next years. Places must be ready for this otherwise there might be a risk that successful start-ups and existing firms will seek space and people elsewhere.
Discuss the establishment of an Enterprise Agency.
The establishment of an enterprise agency, which as a one-stop shop is familiar with the specialisations of local SMEs and that can build on long-standing formal and informal relationships with business support organisations and the local business community can help to increase efficiency and effectiveness of public support programmes, provide potential beneficiaries with information on existing programmes to increase science-industry linkages, and contribute to a further tailoring of policy interventions to local needs and streamline procedures. A successful agency would require the active support of local and regional stakeholders such as the Chambers, the larger private and public sector employers, including the hospital, and financial institutions whose services are key to small business development. Assembling such stakeholder support is likely to be a difficult task without a previous record of co-operative working. Therefore strong leadership from the local authority, with both a political and practical dimension, would be so important. Such an agency could be tasked with the development of the entrepreneurship strategy.
Make the existence of a “Small Business Charter” widely known.
To achieve most effect, the existence of the "Small Business Charter" needs to be made widely known. There may be involvement of representative business organisations in drawing up the terms of the Charter and reviewing its effectiveness periodically. Including a reference to the existence of such a Charter in international marketing efforts might increase the attractiveness of the borough as business location by highlighting the local administration’s commitment to working effectively with small business.
Review procurement policies of the local authority in order to open up the possibility of more small firms tendering to supply goods and services.
The conditions which apply to eligibility to bid for local authority contracts often make it hard for small firms to qualify. Whilst the introduction of restrictions is for risk protection, experience in a number of jurisdictions has shown them to be unduly cautious whilst at the same time denying public policy a valuable tool in boosting the small business sector. There needs to be promotional activity to bring the changes and opportunities to the attention of small businesses. Officers need to be trained to ensure that conditions and eligibility criteria allow small businesses to bid. Training and support programmes to the small firms themselves can help in making them more capable in biding for contracts.
International Learning Models
Good Practice in East Germany