Growth and productivity performance of account managed companies

The research is an analysis of Scottish Enterprise (SE) and Highland and Island Enterprise’s (HIE) Account Managed (AM) Companies’ performance in terms of growth in employment, turnover and productivity compared to a sample of non-AM companies of similar size/sector. As the aim of the AM service is to generate additional economic impact in Scotland by supporting companies with high levels of growth ambition achieve their growth aspirations, this work aims to identify the added value of the account management approach.

A dataset of SE and HIE Account Managed firms was imported to the Secure Lab area of the UK Data Service with firms categorised into their segmentation groups. The dataset was linked to the Business Structure Database (BSD), an annual snapshot of the IDBR, and other ONS business surveys available in the UK Data Service secure data lab. Two separate control groups were constructed using ONS business population data; one drawn from a pool of non-assisted firms in Scotland and a second, drawn from a pool of non-assisted firms in Northern England; the latter used as a robustness test. A Difference-in-Difference model compared the impact of AM over two time periods. The use of control groups and a Difference-in-Difference model ensured growth was compared over time and between similar subjects.

Overall, the results support the conclusion that there is a positive effect on the productivity growth for AM firms. Similar results across both control groups indicate the results are robust. In absolute terms growth is faster for AM supported firms in both periods examined between 2000 and 2014, although the difference in growth for AM supported firms (between the earlier and latter periods) tends to be lower than that for the comparable difference for non-assisted firms for both turnover and employment. This productivity differential arises due to a better performance by AM supported firms in the period up to 2014 in contrast to a declining productivity growth at the start of the decade. The analysis provides some evidence that the SE/HIE interventions to business are working but a lack of time series data prevents an analysis of the interventions that are driving the performance of AM firms.

Developing a more robust time series dataset to fully validate the role of the AM system in the increase in productivity of SE/HIE clients. Such a dataset could be achieved through the annual collection and validation of key performance metrics via SE/HIE CRM system.