What do the Green New Deal and National Bank mean for the UK’s Innovative Green SMEs? | Call for Papers
There is a fundamental need for public policy to address the early innovative green SME financing gap, our research finds. CUSP and the Institute for Small Business and Entrepreneurship (ISBE) is therefore issuing a Call for Papers for a Special Issue of the journal IEEE Transactions on Engineering Management to focus on this issue.
Amidst all of the rising talk of a Green New Deal (see for example Green Alliance; New Economics Foundation) and National Post Office Bank (see Labour Party Vision) in the UK, what do these actually mean for the UK’s innovative green Small and Medium-Sized Enterprises (SMEs)? For far too long the potential contributions of small business to impacting on climate change have been overlooked. This is particularly the case for early stage innovative green SMEs—what might be termed the forgotten and underserved potential game changers in key sectors like renewable energy, recycling, transport and advanced manufacturing, for the low carbon climate change revolution we require.
Recent research from CUSP and the Centre for Enterprise and Economic Development Research (CEEDR) at Middlesex University highlighted the paucity of public policy globally to support innovative green SMEs. Policies such as Green Investment Banks, including in the UK, have focused on leveraging private finance for large-scale projects such as wind farms, but made little or no demonstrable impact on financing small businesses. Furthermore, whilst the UK Small Business Survey indicates that banks remain by far the main source of external finance for UK SMEs, it also exhibits falling demand for bank finance in recent years, and proportionally increasing use of alternative non-bank finance. Crucially, there is a wealth of evidence (see for example ERC Paper No.53; BEIS Research Paper No.23) that bank finance barely addresses the needs of early stage innovative businesses—much less the often large-scale—multi-million pound – patient capital financing required by early stage green innovators.
There has been a rise in equity crowdfunding in recent years, but tax breaks have encouraged a large proportion of this investment to go into shorter horizon tech software. Furthermore, whilst the 2017 UK Patient Capital Review underlined the need to address the Rowlands gap in long horizon investment, it failed to fully recognise that green investment is both long term and a priority for public policy accelerated investment in order to save the planet.
Therefore, there is a fundamental need for public policy to address this early innovative green SME financing gap, and build upon the UK’s global leading public intervention instruments for early stage green innovative SME finance, such as the Low Carbon Innovation Fund in the East of England (LCIF) and the UK Innovation Investment Fund (see BEIS UKIIF Early Assessment).
Call for papers | Entrepreneurial Finance for Green Innovative SMEs
CUSP and Institute for Small Business and Entrepreneurship (ISBE) is therefore issuing a Call for Papers for a Special Issue of the journal IEEE Transactions on Engineering Management to focus on this issue. We welcome original paper contributions that showcase the interplay of policy and contemporary new innovative forms of entrepreneurial finance for early stage green innovative SMEs. This is also part of a series of conferences and workshops planned over the next two years, the next being on 20/06/2019 at Kingston University, London. For further details please contact CUSP Research Fellow Dr Robyn Owen (firstname.lastname@example.org).