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Monetary policy and its effect on the wider economy are important for South Africa's objective of achieving both high economic growth and low inflation — which are deemed to contribute to the government's and electorate's greater objectives of reducing poverty and creating employment. The central bank (South African Reserve Bank, SARB) and the National Treasury have responsibility for both monetary policy and the oversight of the financial sector. Laurence Harris's research on the links between monetary policy, financial sector development, and their connection with the financing and investment decisions made by businesses has led both institutions to seek and act on his advice.
Research within the School's Centre for Research on Globalisation and Economic Policy (GEP) on the characteristics of UK exporting and non-exporting firms has been used by the UK's trade promotion agencies, UK Trade and Investment (UKTI) and the Department of Business, Innovation and Skills (BIS) to improve the design and effectiveness of the firm-specific policies they use to increase export performance.
The research has been used to provide an evidence base against which to judge the rationale for and effectiveness of export promotion and to develop new schemes. The research has led to a better understanding of the different types of barriers to exporting faced by different types of UK firms, and the role of previous export experience in lowering these barriers. This evidence base has both informed the design of the UK's export policy and has helped to fashion a specific, new trade promotion scheme (Gateways to Global Growth) launched by the UK in 2009.
Research by Prof Iraj Hashi has had a significant impact on the development of policies on Employee Financial Participation (EFP) by the institutions of the European Union. The impact has been achieved through the preparation of two major reports for DG V (Employment), a study for the European Parliament, and a study for the European Commission (currently underway). As a result of these works, various institutions of the EU have proposed policies to encourage employee participation in the results of their work (in the form of share ownership, profit sharing, share options, etc.). Most recently, the Commission has issued a call for tender for a "Pilot Project - Promotion of Employee Ownership and Participation", and has also included EFP as an element of its Action Plan to reform European company law and corporate governance. These reports and the associated policy proposals have been informed by, and in turn facilitated, the research by Prof Hashi; in particular, Hashi (1998), Hashi and Hashani (2011) and Hashi and Hashani (2013).
This case demonstrates how researchby the Centre for International Business University of Leeds (CIBUL) between 2001and 2008 has been utilised by Nestlé - the world's largest nutrition company - to improve its communication strategy and evaluate how its foreign investments create value and influence economic development, innovation, environment, society and different stakeholder groups (e.g. employees, suppliers and governments). CIBUL's research has also (1) improved the services offered by intermediaries such as the investment-promotion arm of the British government (the UKTI) and the UN body for economic development (UNCTAD), and (2) benefited the businesses thatthese bodies serve by identifying factors that help theminternationalise and derive greater value from international expansion.
According to the European Commission, over ninety nine per cent of Europe's businesses are SMEs. Their success is crucial for local enterprise, employment and taxation revenue. However, such organisations face major obstacles to accessing additional equity that typically are not faced by large corporations. This research has changed the way some Italian SMEs make decisions about the relative proportion of short-and long-term debt through adopting an optimisation model developed at Leicester's School of Management and which is now being rolled out in Italy and the UK. The Italian firms involved have reduced their cost of borrowing and enhanced their reputation with banks, hence making it easier for them to access more credit.
International evidence suggests that small firms provide the main source of new jobs in almost all economies. Policy support can be important in fostering and facilitating SME growth. Dr Kevin Mole, Professor Stephen Roper and Professor David Storey have helped the UK government and regional economic development agencies to develop, implement and evaluate new policy initiatives for supporting SME growth. Building on the UK research, and partnering with the Organisation for Economic Co-operation and Development (OECD), Professor Roper has shaped SME policy development and evaluation in the Western Balkans as countries have sought to upgrade their SME support regimes and align their policy frameworks to those of the European Community.
Research by the School's Centre for Finance, Credit and Macroeconomics (CFCM) on the monetary transmission mechanism has been influential in improving the design, implementation and effectiveness of the monetary policies of a number of central banks, including the Bank of England, Banque de France and the European Central Bank. The research has influenced changes in the way that official monetary aggregates are measured so as to capture the impact of non-bank financial institutions on the money supply and credit availability, and in better understanding of how monetary policy affects different interest rates. This in turn has allowed for improved control by central banks of their policy targets, and for better understanding of the effects of their monetary policies on economic activity and inflation.
An enhanced appreciation of entrepreneurship, innovation and new enterprise growth has become crucial to economic policy around the globe. Led by Professor Gordon Murray OBE, research at the University of Exeter continues to play a significant role in broadening understanding of this increasingly important area. Murray's research and expertise have assisted in shaping policy in several countries, including the UK, and have underpinned the formation of an influential international academic policymaker forum. The effective delivery of Murray's research to the world of business and industry has strengthened the vital links with academia, and through consistent engagement with a wider audience in high-profile media appearances, Murray's research continues to influence economic policy.
Research at Aston University has influenced and shaped business support policy in the UK and changed the strategic direction of small businesses in the Midlands region, which has led to increased growth and profitability. A specific impact of the research nationally has been to inform the Coalition Government's business support policy and form part of the underlying rationale for the new Growth Accelerator business support programme in England. At regional level the research has changed strategic thinking, specifically in the Greater Birmingham and Solihull region through its Local Enterprise Partnership, the Leeds City Region, and the Greater London Authority, influencing business support strategy and practice in those areas. On the ground, Aston's research has had a direct impact on the growth, job creation and profitability of small businesses in the Midlands.
In a series of European Union funded projects over the last 13 years, a computational simulation model (`SKIN') has been developed at the University of Surrey. SKIN has been used to perform ex post and ex ante policy evaluation for the European Commission and others to test proposed innovation policies and the model is now also being used around Europe for similar purposes at the national level.
These newly developed computational methods have been applied to allow policy makers to examine and understand the potential effects of interventions in complex innovation systems.