Overarching rationale and Theory of Change for the North East Growth Hub

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Overarching rationale and Theory of Change for the North East Growth Hub

Introduction

The programme logic model (PLM) and Theory of Change (ToC) for this evaluation are adapted from the national evaluation of the Growth Hubs, conducted by Technopolis for BEIS between 2020-2022. This provides essential context to the evaluation of the North East Growth Hub and its programmes, and has been adapted in consultation with programme leads. The following narrative sets out an overview of the North East Growth Hub model, the market failure being addressed, and the activities, outputs, intended outcomes, and intended impacts. Where possible, this is set out by the overarching Growth Hub and each of the High Potential Start-Up and Made Smarter North East programmes. The logic model was developed based on existing documents and scoping interviews with programme leads.

What is a programme logic model?

A programme logic model (PLM) is a diagrammatic representation of an intervention’s objectives, inputs, activities, outputs, outcomes, and impacts.

What is Theory of Change?

A theory of change (ToC) sets out the causal links and enabling/liming factors to reach those outcomes and impacts. This provides the basis for theory-based evaluations such as this, establishing the hypotheses to test.

The North East Growth Hub model

The North East Growth Hub was established in 2014/15, and is one of 38 Growth Hubs in England. The North East Growth Hub is delivered (in-house) by the North East Combined Authoirty. The North East Growth Hub comprises several functions including communications, triage, connectors and programme managers. All services offered by the North East Growth Hub offers are free at the point of access.

Communications

The communications team, made up of three individuals and a range of supporting (ad hoc) associates, works across the Growth Hub to develop content, position the brand, and drive activity and engagement. One of the main areas overseen by the communications team is the online presence of the Growth Hub, including its website and various partner-specific pages. The communications team work to develop the content of the site in a way that helps businesses to find support, including keyword combinations and search engine optimisation. This also includes ‘packaging’ information together as ‘toolkits’, which bring together examples, stories, and information of specific support products that businesses may be able to identify as relevant to their circumstances.

Triage

The triage team, comprising two individuals, is the first point of contact for many businesses that reach out to the Growth Hub. The triage team works to with expand the awareness of the Growth Hub and available business support, and also follows up with businesses that have received support. In addition, the triage team collects intelligence about the business environment and relevant topics.

Connectors

The majority of ‘client-facing’ work is undertaken by a team of four ‘connectors’, individuals with industry experience that offer businesses via dedicated one-to-one support. This support may encompass diagnostic support whereby the connector works with the client to develop an understanding of the business and the challenges to solve or opportunities to pursue. This process then informs the identification and access routes for appropriate support. While connectors have previously been responsible for addressing all businesses is an ‘agnostic’ way, it has more recently focused on a set of priority sectors, identified in the North East Strategic Economic Plan (SEP).

Programme Managers

A team of programme managers focus on operational aspects of the Growth Hub, such as the funding arrangements put in place with the UK government via the Department for Businesses, Energy, and Industrial Strategy (BEIS) or contractual questions. The programme managers also oversee the business support side of the Growth Hub, including managing the team of ‘connectors’ (see above).

Relevant market failures addressed by the Growth Hub and its programmes

There is a strong rationale and clear market failure that forms the basis for the investment in the Growth Hub. The Growth Hub aims to address the low uptake of business support by SMEs as well as a perceived lack of clarity over the benefits of applying for such support on the part of SMEs. The Growth Hub seeks to address this by stimulating demand for business support (start-up, growth, scaleup and productivity support), and by helping businesses to navigate through the range of available support. SMEs have long been regarded as essential drivers of growth in the UK (and regional) economy, and research has shown that SMEs that utilise support services during their early years of development are more likely to succeed in creating high value companies.

Low uptake up of business support by SMEs is due to two primary factors:

High Potential Start Up Programme

Examining the two specific programmes in scope, the High Potential Start Up programme was launched to aid aspiring entrepreneurs in developing their ideas. The programme aimed to address a comparatively low number of high-potential start-ups in the region, with the North East found to have fewer start-ups scaling beyond £1m in three years than the national average, in combination with a lower-than-average business birth rate. This addresses a direct policy objective outlined in the North East SEP, to improve the pipelines of businesses with scale up potential, as well as to increase the rate of start-ups with scale up potential. Analysis on high growth start-ups in the North East found a strong need for start-up programmes which proactively reach out to potential entrepreneurs and generate a culture in which these prospective business owners have the confidence and resources to create high growth start-ups.

Made Smarter Adoption North East

The Made Smarter Adoption North East programme was launched in April 2021 to address low levels of adoption of digital technology, and to improve leadership and management to increase the productivity of the UK manufacturing sectors. The BEIS Made Smarter review estimated that full adoption of digital technology could increase manufacturing productivity by 25% over the next decade. The programme addresses these issues by offering business support, focused on growing interest in digital technology, and encouraging adoption through support to the creation and implementation of a digital road map .