Using our framework will help the UK Government grow crowdfunding in line with its industrial strategy.
In January of this year the UK Government published a green paper called Building our Industrial Strategy with the stated aim to:
- “build on our strengths and extend excellence into the future;
- close the gap between the UK’s most productive companies, industries, places and people and the rest; and
- make the UK one of the most competitive places in the world to start or grow a business.”
It is a consultation paper and actively invites responses from all and everyone with an interest it and we have until 17th April to do that.
At 132 pages it has space to set out ambition and is, as you might expect, couched in the narrative that the Government widely uses around inclusivity and fairness and is firmly placed in the context of an imperative and opportunity in the circumstances of the vote to leave the EU. It even has a video with some dubious musical accompaniment but it does at least include some picture of “the dear green place” known widely as Glasgow!
It sets out a structure of ten pillars upon and within which it is intending to frame and build the economy on these pillars being science, research and innovation; skills; infrastructure; business growth and investment; procurement; trade and investment; affordable energy; sectoral policies; driving growth across the whole country; and creating the right institutions to bring together sectors and places.
Within that I was pleased to find mention of crowdfunding and its role in this strategy. In mentioning crowdfunding it tells us that , yet again, the UK Government recognises that crowdfunding is of genuine significance and that they are signaling at the very least some tacit support for it. Falling within the pillar of Supporting Businesses to Start and Grow ( albeit I would argue it is relevant to other pillars too) it introduces crowdfunding in the context of access to equity funding. This is a fundamental error to think of crowdfunding in this somewhat one dimensional way and we will naturally point this out in our response – it is after all a consultation.
The paper reflects that – in their estimation – crowdfunding activity is concentrated in the SE of England and that they have ambitions to expand and spread the adoption of crowdfunding to other parts of the UK and openly invite suggestions as to how this might be achieved.
Whilst the concentration of crowdfunding in the SE of England is a well recognised fact we should reflect on the rapid growth of the funding in Scotland. A rate of growth that outstrips the rest of the UK and as evidenced in the latest Scottish Crowdfunding report.
However their conclusion seems to be that crowdfunding is useful and that we should seek to grow it and they specifically pose the question in the consultation process
“How can we drive the adoption of new funding opportunities like crowdfunding across the country?”
It is a good and relevant question and one that we have been working on with policy makers for a number of years now in a range of different geographies.
In fact is has been such a perennial question we developed a framework in conjunction with Dr Dan Marom to help policymakers develop their approach in an effective and structured way. We call it our Crowdfunding Growth Intervention Model.
The framework has a range of valuable uses. It is an analysis lens providing a structure for auditing and evaluating what is in place in a particular place to support and enhance crowdfunding. It does this by breaking down the key influencing factors into four key groups, which we refer to as Education, Infrastructure, Leverage and Matching so by applying this filter can be a good way of auditing and capturing what is already in place.
The findings of an audit based approach can also be used in benchmarking exercise against other areas. So in this case we could analyze the South East of England, and to compare this to other regions for gap analysis with a view to making adjustments via a range of interventions to close gaps and level up.
The framework also has great application in helping to define the range of ways that a public, civic or governmental body – or indeed policy makers more generally – can act in the form of interventions to build a more conducive environment for crowdfunding to thrive.
Using the framework as analysis tool for all existing support services and provision can be a useful way of ensuring that these can be aligned to, or integrated with, to serve crowdfunding needs. This seems to have particular positive outcomes by ensuring that any crowdfunding initiative sits within and aligned to all broader initiatives and is not a separate and isolated project. Too often we encounter crowdfunding initiatives which are launched with good intention but are isolated and not integrated with a range of other portfolio activities for the body. This can be a highly ineffective and inefficient approach and should be avoided at all costs.
With this range of application and its robust repeatable format we will be recommending that the UK government makes use of it as part of their approach to building on and extending crowdfunding more widely across the UK as part of its industrial strategy.
If you want to learn more about how the framework can be used in your organization to frame your approach to crowdfunding do get in touch.