Improving business performance


Developing the existing business base, supporting entrepreneurial activity and innovation, and developing clusters and supply chains are critical drivers of economic prosperity. Two sections of the diagnostic tool deal with this area: Driver 1 on improving business performance and Driver 2 on supporting priority sectors and supply chains.

Economic diagnostic tool

This section of Knowledge contains further support material on these areas and on social enterprise. The following case study on Birmingham, for example, shows how a council can support business development and innovation.

Birmingham Inquiry


Industrial clusters

The theory of 'industrial clusters' can explain why some regions and countries are more economically successful than others. Find out about the practical implications for local authorities.

Industrial clusters and their implications for local economic policy

Social enterprise


Deprived areas often have low levels of enterprise and entrepreneurship compared to more affluent areas. The numbers of businesses per thousand residents in an area is known as the enterprise rate and the difference in the rate between areas is known as the enterprise gap. The enterprise gap is at its maximum in some inner city areas.

Increasing entrepreneurship and small business ownership helps local economies by increasing:

  • prosperity levels
  • productivity
  • job creation
  • flexibility in the labour market.

It is also a popular option among those who face discrimination in the labour market such as ethnic minorities or people with disabilities.

Social enterprises are involved in a range of activities, including:

  • employability
  • job creation
  • community needs
  • wealth enhancement and retention
  • community asset base
  • neighbourhood improvement.

These activities can benefit:

  • service delivery
  • independent advice and counseling
  • community development
  • employment and wealth.

The DTI (now BERR) launched its social enterprise strategy in August 2002. The strategy has three key objectives:

  1. the creation of an enabling environment
  2. making social enterprises better businesses
  3. establishing the value of social enterprise.


These documents are in the Partnerships and Places Library:

The Big City Plan in Birmingham

Social enterprise

Community finance loans for social enterprise

Business mentoring for social enterprise

Finance for social enterprise

Public procurement and social enterprise

There is a study 'What role for community enterprises in tackling poverty?' on the Joseph Rowntree Foundation website about the contributions community groups can make to reduce poverty in their neighbourhood.

What role for community enterprises in tackling poverty? - on the Joseph Rowntree Foundation website.


National Business Improvement Districts Advisory Service

Economic development and enterprise in local area agreements

Lambeth's round two Local Enterprise Growth Initiative (LEGI) application

Local enterprise and growth in Norwich

These documents are in the Partnerships and Places Library:

Micro enterprise support

Developing entrepreneurs

Business incubation

2 May 2012

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