Pioneer Programme supporting entrepreneurial students at Birkbeck kicks off with a bang

Students on the Pioneer programme began the journey to develop their entrepreneurial skills with an inspiring session on Innovation and left feeling energised and motivated for the year ahead.

On Saturday 17 November, nearly 200 Birkbeck students started their journey on the Pioneer programme, a 7-part course that develops their entrepreneurial skills and knowledge and culminates with a Pitch and Celebration Evening in June 2019.

The programme, in partnership with Santander Universities, began with an inspiring and energetic session on Innovation from serial innovator and entrepreneur Julie Holmes, who motivated the students to pursue their ideas and turn them into reality. In between science-experiment style fireworks and top tips for starting a business, Julie kicked off the Pioneer programme with a bang and prepared the audience for a brilliant programme ahead.

Students also heard from Ambi Mistry at Creative Entrepreneurs, a movement that brings together the resources, roles models and networks creative people need to turn their ideas into successful businesses. Ambi delivered an invaluable networking session to encourage students to collaborate and think outside the box when it comes to making connections for their business ideas.

Jenna Davies, Programme Manager for Pioneer said, “Pioneer offers a fantastic platform for students who have a business idea or who are keen to develop entrepreneurial skills. Julie and Ambi have started this year’s programme in incredible fashion; the students were genuinely buzzing when they left the building.”

Baldeep Hothi, Programme Coordinator added, “The students will benefit immensely from Pioneer and it’s clear that they have already gained so much from this first session. Santander’s support has made this happen and we can’t wait to continue the journey in the coming months.”

Pioneer continues in December followed by a monthly workshop on a range of topics including Lean Business, Start-up Marketing, Funding, Pitching and more.

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The future of management research

A recent workshop from Birkbeck’s Centre for Innovation Management Research and publisher Wiley saw debate about the new directions that research in entrepreneurship and innovation could take, including the potential future role of Artificial Intelligence.

On Monday 29 October, Birkbeck’s Centre for Innovation Management Research (CIMR) hosted a research workshop in collaboration with Wiley, publishers of the Strategic Change: Briefings in Entrepreneurial Finance Journal. Professor Helen Lawton Smith and Professor Carlo Milana in the Department of Management are editors of the journal.

The aim of the workshop was to stimulate debate on new directions in research in entrepreneurship and innovation, in order to encourage new submissions, reach wider audiences, and highlight opportunities for more dynamic research contributions in the field. The workshop also provided an opportunity for current Management PhD students to discuss their research and progress with the audience, demonstrating the Centre’s diverse and unique research expertise.

Future Directions and Artificial Intelligence Research

Professor Carlo Milana opened the workshop with a discussion of the journal’s “business model” – a thematic approach whereby each issue deals with a particular topic, encouraging a variety of submissions that provide different perspectives on key issues in entrepreneurial finance, sustainable business models, and emerging economies, among other areas of innovation management and entrepreneurship. He also expressed his interest in contributions that will address important questions around the future development of artificial and social intelligence; for example, how will artificial intelligence (AI) engage and impact entrepreneurship? Professor Milana concluded his presentation with a list of practical issues with AI, such as technological unemployment, jobs displacement, security and privacy, and the reliability of automated systems.

Continuing with the theme of artificial intelligence in business and management, Professor Damir Tokic (International University of Monaco) joined the workshop via Skype to discuss his research on the implications of AI for executive decision-makers, asking whether AI can replace human discretion. The world’s largest investment management firm, BlackRock, recently announced the launch of the BlackRock Lab for Artificial Intelligence, suggesting that it intends to “keep tapping into artificial intelligence” to improve the financial wellbeing of its clients. Thus, Professor Tokic asks in his research: “Can AI replace the human discretion in investing?

The answer is yes, technically, because AI programmes can use econometric methods to extrapolate historical data and can interpret and use economic forecasts embedded in financial assets, ultimately ensuring market efficiency. However, legislation, unpredictable geopolitics, and the justice system might prevent the rise of “Robo decision-makers”, meaning that while machines can be fed with all possible human knowledge and available data, as long as human imperfections are preserved, AI-powered machines will not be able to replace human discretion.

Birkbeck PhD candidate Dina Mansour

Open Research, Transparency and Relevance

When we talk about research in the current academic environment, the topic of impact inevitably comes up. In his presentation, Chris Graf, Director of Research Integrity at Wiley, asked what it means for research to be “open”, saying that open science/access is a way of doing research that brings about new opportunities for publishers by: (1) driving forward new models of publishing to emphasise relevance, (2) creating new services for researchers to support their requirements through innovation, and (3) taking a thought leadership position through community engagement. He also discussed issues of reproducibility in research and publication bias, whereby reviewers and editors may be more inclined to accept manuscripts based on the direction of findings, potentially neglecting lesser known research and making some studies seem more significant than they are. His recommendation was to increase the transparency of the research process and products to improve research reproducibility.

Research on Gender and Entrepreneurship

Professor Colette Henry (Dundalk Institute of Technology) provided greater insight into the nature of research on gender and entrepreneurship, noting that in the entrepreneurship literature, “gender typically means ‘women’s entrepreneurship’”, and there is urgent need for new perspectives on the topic, such as: (re-)conceptualising the gender perspective in entrepreneurship, the influence of gender on the entrepreneurial ecosystem, leadership styles, and business model innovation.

She also shared data on women’s participation in entrepreneurship, highlighting that more women are engaged in ‘necessity entrepreneurship’ than opportunity-based entrepreneurship. This means that women across the world are more likely to become entrepreneurs due to gender-specific issues, such as childcare challenges and restrictive workplace policies; and in some cases, some women simply become entrepreneurs to meet basic economic survival needs as they have no other options.

A Publisher’s Perspective: Maximising Research Impact

After a full day of discussing future areas of research in entrepreneurship and innovation, it was only appropriate to end with the publisher’s perspective on how to maximise the reach and impact of publications. Shannon Canney, Senior Editor at Wiley, began by asking the audience which metrics mattered to them. For most people, the answer was citations, which was consistent with Wiley’s research findings: most people think citations are highly important, whereas some think downloads come next, and a smaller percentage believe social media sharing matters.

Joshua Tufts, Editor at Wiley, said that all these metrics matter for research impact, as they contribute to a comprehensive view of a paper’s performance. It is important for researchers to use various channels to publicise their research because search engine optimisation (SEO) is vital in a digital age, and between June 2016 and July 2017, 54% of visits to Wiley Online Library came from search engines (26% had no referrers, 18% came from other websites, and 1% came from social media). Academics and researchers can maximise their impact through SEO in 4 easy steps, including: usage of relevant key words/phrases throughout the article, choosing a smart, descriptive title which incorporates key phrases, writing a good abstract by expressing key points from the article in simple terms, and creating a network of inbound links and citations to one’s article.

Wiley provides a useful self-promotional author toolkit that researchers can utilise to help ensure their work is seen, read, and cited.

It was a very insightful event for researchers in entrepreneurship and innovation, and the organisers would like to give particular thanks to the sponsors, Wiley, and all speakers:

  • Shannon Canney, Senior Editor, Wiley
  • Chris Graf, Director, Research Integrity & Publishing Ethics, Wiley
  • Colette Henry, Adjunct Professor of Entrepreneurship, Dundalk Institute of Technology
  • Carlo Milana, Editor in Chief, Strategic Change: Briefings in Entrepreneurial Finance
  • Damir Tokic, Professor of Finance, International University of Monaco
  • Joshua Tufts, Editor, Wiley

Birkbeck PhD Students

  • Maryam GhorbankhaniExploitation of Public Sector R&D
  • Maximillian Giehrl – Open Innovation Collaborations in German Manufacturing Firms
  • Dina MansourEntrepreneurship and Economic Development in Developing Countries: The Case of Egypt
  • Peter RossTheories of Diffusion of Innovation and Medical Engagement: Successful Adoption and Assimilation of Healthcare Reform

Presentations from the workshop can be downloaded from the CIMR website.

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Birkbeck’s day out with the London Venture Crawl

Jenna Davies leads the extracurricular Enterprise activities at Birkbeck and recently took a group of students on the London Venture Crawl, an event aimed at connecting them with businesses and experts.

Wednesday 14 March saw a group of entrepreneurial students from Birkbeck join an event that was unlike any other; six double-decker buses, nine London Universities and over 200 students made up the London Venture Crawl and celebrated everything the city offers to budding entrepreneurs.

Birkbeck teamed up with University of the Arts and the University of East London and transported students to a range of enterprising spaces around the capital to inspire them to pursue their start-up ventures, meet successful entrepreneurs along the way and ultimately check out a snapshot of what London offers on the start-up scene.

The day started bright and early with students ready for the first stop of the day at Campus London, a Google space in Shoreditch. Hearing from Creative Entrepreneurs, an innovative community of creative individuals, the group woke up and boarded the double decker bus that was to be their mode of transport for the day.

On board, they were greeted by serial social entrepreneur Benjamin Western, Co-Founder of Gaggle and indiGO Volunteers to pump them up for the rest of the journey.

The second stop was at Amazon Fashion, catering nicely for the group as they got an insight into the impressive warehouse where all of Amazon’s fashion items go for checking, photographing and packing. A panel discussion with the top operators gave a glimpse into life at the leading online retailer.

Third stop of the day took the group to Grant Thornton, after hearing from their Head of Growth Finance, Sarah Abrahams. Lunch was served and the students met Crate Brewery Founder Tom Seaton who shared his story starting up Hackney’s well-known venue.

The venture continued on to Hello Fresh, the extremely impressive and relatively new organisation that saw its revenues grow from €2.3m in 2012 to €304m in 2015 – here the students met some of the key players at their London hub and toured the quirky space.

The penultimate stop for the group was Innovation Warehouse, a co-working space and community for digital high-growth start-ups. The students were able to hear from the founder Ami Shpiro along with some of the entrepreneurs within the community.

The final stop brought all six buses together where students from across the nine universities to could network over a pizza and beverage while hearing from the inspiring Lawrence Kemball-Cook, founder and CEO of Pavegen, as well as take part in the cross-bus pitching competition. Birkbeck stormed through to the final, with Business Innovation student Bobette Kenge rounding off the day on a high and ending what was an extremely eventful, inspiring event for everyone involved.

Birkbeck Business & French student Jennifer said: “The Plexal building was fantastic, the talk at Grant Thornton with the Founder of Crate Brewery was great and gave an insight into the different types of investments, investors and how it all works, and Amazon Fashion was heaven to me! I would love to come to a similar event again and meet more people.”

This was an incredible opportunity for our students to network with a huge range of fellow London students, plus receive invaluable advice from the speakers throughout the day. The energetic atmosphere lasted right to the end of the day and was fantastic to see.

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The Impact of Entrepreneurial Finance, Education and Religion on Entrepreneurship

This post was contributed by Prof Carlo Milana, Prof Helen Lawton Smith and Ning Baines of the Birkbeck Centre for Innovation Management Research (CIMR). The article focuses on a workshop held by the Centre on Friday 15 April titled ‘The Impact of Entrepreneurial Finance, Education and Religion on Entrepreneurship’, sponsored by Wiley

Wiley logoRaising finance is critical for small firms and medium-sized enterprises (SMEs) to survive, innovate and grow. Innovation is typically underfinanced. In this workshop, attention was focused on the influence that entrepreneurial finance and other mitigating cultural factors such as education and religion may exercise on reducing risk in entrepreneurship in the current economic hardship.

Speakers:

  • Jonathan Potter (OECD, Paris) Recent Market and Policy Trends in the Development of Mezzanine Finance and Hybrid Debt-Equity Instruments for SMEs.
  • Victor Martin-Sanchez (King’s College, London) Unemployment and Growth Aspirations: The Moderating Role of Education
  •  Kwame Ohene Djan (University of Agder, Kristiansand, Norway) Does Religious Affiliation Influence the Design of Corporate Governance? Evidence from the Global Microfinance Industry

Chairs:

  • Carlo Milana and Helen Lawton Smith

 

CIMR logo

Mezzanine Finance and Hybrid Debt-Equity Instruments for SMEs

The first speaker Jonathan Potter presented recent and innovative work undertaken by the OECD on the Mezzanine Finance and Hybrid Debt Equity Instruments for SMEs. This is an area of financing that is relatively understudied and is one which is beset by ambiguity in definition. This ambiguity led to a series of challenges to the speaker on the nature and merits of mezzanine finance for SMEs.

Dr Potter explained that the SME sector is characterised by a wider variance of profitability and growth than large enterprises. Survival rate of SMEs is lower. It is difficult to distinguish the financial situation of the firm from its owners. Relations between the firm and its stakeholders are likely to reflect personal relationships to a higher degree than in larger firms. SMEs often obtain funds from informal sources. The problem of asymmetric information between the entrepreneur and the lender is more serious for small firms because of the blurring of the line between the firm and the entrepreneur. Various financial instruments can help overcome the asymmetric information and agency problems. An efficient financial system should have a range of instruments that matches needs of firms. If the right instrument is available for the risk/return profile the market could provide finance for a viable project.

Mezzanine finance is a hybrid instrument – typical mezzanine facility blends several instruments, such as subordinated loan (interest rate above senior loan; principal normally repaid at end as “bullet”), participation in ongoing revenue or profits, or participation in upside share price growth with equity “kicker” (commonly an “equity warrant” allowing purchase of shares at floor price, or equivalent remuneration). It operates in private capital market, in private investment partnerships (with up to about 100 private investors). Funds are supplied by private investors (Limited Partners) – high net worth individuals; family offices; pension funds; other institutions. It has a defined life span (5-10 years) – tend to select investees and do deals in first 3 years, then hold and close fund taking returns at around 8-10 years. At maturity fund, it is liquidated and money returned to investors. Rules are determined by market practice.

However, with uneven presence in OECD countries, commercial mezzanine tends to be focused on larger firms and leveraged buy-outs. It is not generally issued to SMEs with modest returns and which do not want to relinquish control. Public intervention may be needed to stimulate the sector and extend to SMEs, where the private sector does not provide funding. Public intervention mechanisms can be in the form of participation in the market through mandates to private funds; direct provision of funds to SMEs and guarantees/preferential funding of private investment companies.

Mezzanine financing therefore can respond to a market failure in finance for established companies in traditional sectors seeking to grow or effect transformations. It involves features that respond to asymmetric information and agency problems affecting SME finance, allowing higher returns without taking control. It is a relevant niche in the spectrum of finance instruments. Mezzanine finance can fill the gap as the SME owner not required to cede control, can pay the principal at the end, the investor accepts more modest returns but can take a share of the upside. It should lead to more growth in existing SME sector. The public sector can play a role in stimulating this part of the market. Several OECD countries found the instrument valuable, e.g. France, Germany, USA, but in half of OECD countries there was no public mezzanine programme and officials were not familiar with the product.

An issue raised in discussion was about the nature of the UK market and activities of the British Business Bank, particularly given their strong interest in developing this form of finance. It is also clear from the questions asked that there is more research to be done in this field in a number of ways. These include aiding understanding of the extent to which mezzanine can actually impact on earlier stage financing, and how and why it is suitable for firms in some sectors rather than others. And, more evidence was needed on how mezzanine actually operates in some (e.g. European countries) in practical terms and what lessons this might carry forward to future policy.

CIMR_15_04_16_2

Unemployment and Growth Aspirations

Victor Martin-Sanchez’s theme was unemployment, entrepreneurial growth aspirations (EGA) and the moderating role of education. He argued that policies targeting human capital formation and entrepreneurial training contribute not only to enhance opportunity-seeking entrepreneurship, but also to territorial economic performance by enhancing the growth aspirations of entrepreneurs.

His research shows that the characteristics of the individual (founder/entrepreneur) and the environment in which the firm operates can act as drivers of EGA. However, during economic slowdowns, it is not clear how the interaction between entrepreneurs’ background and environmental conditions drives the EGA. The paper aims to investigate how an entrepreneur’s education and training shape the relationship between changes in unemployment rates, a variable that signals the economic and employment conditions, and EGA. Entrepreneurs’ judgmental decisions are actually beliefs or conjectures. The conjectures or beliefs depend on how they think the environment in which their firms operate will evolve. If those beliefs about new products or superior production processes are proved right, the entrepreneurs earn a profit; otherwise, they incur a loss. Through the different education processes, individuals gain knowledge and build mental frames and models used to interpret and make sense of the reality that surrounds them.

Education and entrepreneurship training experiences may enable entrepreneurs to gather and process information more efficiently. Accordingly different levels of education will be expected to moderate differently the way unemployment rate changes influence those entrepreneurs’ growth aspirations. Entrepreneurs with higher education are more likely to readjust accurately their conjectures or beliefs about the potential of their new ventures, in the light of changes in the environment. Individuals can learn opportunity‐seeking processes through the avenue of entrepreneurship training, thereby improving both the number of ideas generated and the innovativeness of those ideas. It has been commonly argued that economic crisis periods may destroy some of the old ways of doing business, while new alternatives for those who are able to identify them and dare to take them. The skills and knowledge gained through training in entrepreneurship help entrepreneurs to identify and pursue better opportunities, even in a difficult economic environment. It is shown that an increase in the unemployment rate reduces EGA. There is a connection between economic conditions and entrepreneurial behavior. The general effect of unemployment rate change is contingent upon the entrepreneurship training of the individual. Knowledge and skills gained by individuals’ opportunity identification and exploitation may vanish the influence of global economic conditions. Opportunity identification is a unique capability that might be developed in parallel with other capabilities.

The implications of the research are that there needs to be improvement in the design of public support policies towards entrepreneurs. A better understanding of the determinants of growth intentions will be relevant for anyone with a stake in growing venture, such as venture capitalist, customers, and suppliers.

Does Religious Affiliation Influence the Design of Corporate Governance?

Kwame Ohene Djan’s take on individual and cultural influences on the availability and use of SME finance was that of the influence of religious affiliation, in particular Christianity, compared to secular lending bodies, on the design of corporate governance. His work is inspired by a previous study that investigated the impact of religion on agency costs finding that religion has a significant negative influence on owner-manager agency costs. He points to the mitigation of regulation of religious affiliated firms by the national banking authorities. He drew on evidence from the global microfinance industry.

Like the other speakers, the importance of temporal context was raised. The context here is the debate which began with Max Weber’s classic work. The Protestant Ethic and Spirit of Capitalism where he claims that the Protestant Ethic which focuses on personal agency and diligence, spurred economic development. Although Weber’s thesis has been disputed the more general idea that certain religious attitudes may have positive implications continues to be discussed and supported. The extensive debate regarding the historical role of religion in the development of modern capitalism sharply contrasts with the meager attentionn that has been devoted to religion in current development research efforts.

The objective of the current research therefore is to investigate how religious affiliation influences the design of corporate governance in social enterprises with evidence from the microfinance industry. By using the random effects model, differences are tested between Christian and secular MFIs along various variables including the regulatory framework, Board Size, Board Meetings per Year the number of Female CEOs and the number of International Directors.

The study used panel data on 403 MFIs based in 73 countries across the countries in the world. Generally, the results indicate that Christian MFIs do not have a slacker governance design. The tests indicate, however, that Christian MFIs are relatively less regulated by national banking authorities.

The speaker was challenged on whether it would be more helpful in aiding understanding of microfinance and region if the results were couched as religious affiliation per se rather than Christianity.

The take away from this workshop is that it is very difficult to get a holistic understanding of financing SMEs in both traditional and high-tech sectors. However, by juxtaposing different cultural perspectives as well as economic provides insights that would not normally be available. Exciting times!

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