When moving information online diminishes change: advisory services to SMEs

Abstract

Improving the performance of private sector small and medium sized enterprises (SMEs) in a cost effective manner is a major concern for government. Governments have saved costs by moving information online rather than through more expensive face-to-face exchanges between advisers and clients. Building on previous work that distinguished between types of advice, this article evaluates whether these changes to delivery mechanisms affect the type of advice received. Using a multinomial logit model of 1334 cases of business advice to small firms collected in England, the study found that advice to improve capabilities was taken by smaller firms who were less likely to have limited liability or undertake business planning. SMEs sought word-of-mouth referrals before taking internal, capability-enhancing advice. This is also the case when that advice was part of a wider package of assistance involving both internal and external aspects. Only when firms took advice that used extant capabilities did they rely on the Internet. Therefore, when the Internet is privileged over face-to-face advice the changes made by each recipient of advice are likely to diminish causing less impact from advice within the economy. It implies that fewer firms will adopt the sorts of management practices that would improve their productivity.

Keywords:

• SME policy
• Business Link
• online
• management practices
• advice
• advisory services

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Corrigendum

Acknowledgements

The authors gratefully acknowledge support for this research from the UK government's Small Business Service (now Enterprise Directorate, Department of Business, Innovation and Skills). This article is a recritique using the programme theory of empirical analysis originally completed and published in the ‘Economic impact evaluation of Business Link local services’ (BERR, 2007). The views in this paper are those of the authors and do not necessarily reflect those of BERR.

Notes

1. BL operated in England. Scotland and Wales had their own counterparts, Scottish Enterprise and Business Connect respectively (Mole and Keogh 2009). BL ended their face-to-face provision of business advice in November 2011.

2. The study distinguished between intensive advice that involved a diagnostic process, an action plan and a subsequent intervention versus non-intensive advice that is a simple response to a query.