What have you missed most of being in lockdown for the last fifteen months? On a professional level, I’ve longed for the opportunity to go and talk face-to-face with businesses across Wales.
There was a month or so when I managed to get to see a few of the Fast Growth 50 winners in November to give them their trophies, but then we went back into lockdown again for several months.
Just having the chance to talk and share ideas with others is increasingly seen as important to the competitiveness of businesses. More importantly, there is growing evidence to show that greater collaboration between businesses leads to increased performance in terms of growth, profitability and productivity.
Yet it would seem that many businesses are reluctant to invest in good practices such as increased networking to improve their competitiveness. Indeed, it would seem that Welsh businesses are not fully engaging with this agenda outside the usual “speaker with a chicken dinner” gatherings.
For example, a recent study by the Hodge Foundation found that a key barrier to improved productivity performance was access to information. Whilst external networks are used by businesses to different degrees, they are rarely seen as transmitters for new ideas and few firms are able to fully exploit such sources of information and to act upon them.
Why is such networking important? Studies have shown that with respect to facilitating growth amongst businesses, high growth firms have higher levels of interaction with networks and external organisations than those that grow slowly.
This is not surprising as it is a critical factor in linking individuals with other individuals and organisations and in doing so, creating a ‘social platform for entrepreneurship’ via which firms develop and grow.
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Better networking can also extend access to knowledge, skills and resources - which significantly enhances the firm’s operational capabilities - and facilitate awareness of the firm which has a positive influence in gaining access to customers and markets.
It can also be an important source by which growth firms address the gaps in their requirements and enhance their credibility, market position, and growth opportunities as well as encouraging collaboration with others which can provide the inspiration for new innovations and innovative approaches.
The Hodge Foundation study also found that greater networking and collaborative activity is important for business growth and can include the use of shared resources, joint working, and mutually supportive exchange of information and expertise.
Given this, you would think that is exactly the sort of activity that would be encouraged by support bodies in Wales.
Yet research from one of my doctoral students showed that there was insufficient support for such networking in Wales especially in facilitating access between growing businesses.
This is despite owner-managers considering that there could be immeasurable value derived from networking with like-minded, similar sized firms in non-competitive areas, as it would provide an opportunity to “learn something from each other” and have a significant impact on growth.
Yes, business support in Wales has used networking to facilitate access to funding and other resources but it has largely failed to provide peer-based interactions or provide support to founders that are clearly seeking a more person centric approach which has been of significant benefit to high growth firms in other countries.
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For example, Productivity Club Scotland is a free network of businesses that offers the opportunity for businesses to engage together across all sectors and discuss common business areas. It focuses on a number of business areas including leadership and management, employee engagement and wellbeing, organisational culture, exporting and collaboration.
So, why don’t we have something similar here in Wales?
In a post-Covid economy, businesses will need to work more closely together to ensure that the sum of the parts of the Welsh economy are greater than the whole.
This could be done either by public bodies such as Welsh Government and the city deals or by businesses themselves, potentially through the expansion of existing networks such as the Wales Fast Growth 50.
But whoever drives this agenda forward, it is imperative that we create regional business networks across Wales where firms are able to come together to share experiences, to learn from each other and more importantly, improve their growth and profitability.
Simply put, better networking will result in better businesses which then leads to superior performance that, in turn, creates better jobs and higher levels of economic prosperity and competitiveness across Wales. And that, more than anything else, is what the Welsh economy needs as we come out of the pandemic.