Dr Darja Reuschke
University of St Andrews, United Kingdom
“I am delighted to be awarded a RSA Early Career grant. It opens up fantastic opportunities to conduct policy-relevant research including a workshop with senior stakeholders in economic development that would have been difficult within other research grants/projects. The grant will also facilitate networking opportunities within and beyond RSA's extensive membership at conferences and seminars.”
Mortgages and housing assets are critical elements in the savings portfolios and collateral of most potential entrepreneurs. Changes in the values of these assets, and in the capacity of households to withdraw housing equity either by borrowing or moving, have implications for the formation and continuation of small businesses. Remarkably few connections have been made in research, policy and practice between housing policy and policy for small businesses. However, there is evidence for the UK that the current mortgage crisis is having a negative impact directly (as well as indirectly through spending and investment channels) on entrepreneurial activity. This study will promote knowledge exchange and policy transfer between housing and business policy and practices. Further, it will provide advice for lenders and economic development agencies/services on how to encourage people to start-up a business. A particular emphasis will be placed on Scotland where important aspects of institutional and expenditure policies are becoming increasingly different from England. In addition, housing markets and price changes are distinct from much of the rest of the UK.
The main research questions are: (1) What are the current mortgage policies and practices concerning self-employed entrepreneurs, and how have they changed since 2008? (2) What policy and institutional connections between housing and enterprise policy are present in Scotland at different levels (e.g. Scottish Government, enterprise agencies, local economic partnerships)? (3) What are the differences in policy between devolved administrations and England? (4) How do the housing choices of individuals, budget demands of paying mortgages and house price changes affect firm creation and development in Scotland?
Previous research explored firm formation by looking at macro-economic factors, regional context, business finance, and individual features of entrepreneurs. No attempts were made to conceptualise housing equity and housing choices in order to understand their impact on who starts or terminates a business. The key innovation of this project is to integrate research on housing economics and entrepreneurship. In so doing, the research will expand the existing literature and further knowledge of the inter-relations between entrepreneurship and housing.