The Southampton Institute's business school has used government funding to regroup its small and medium-sized enterprises and entrepreneurship work into a new centre to act as a focus for small business needs.

The Centre for Enterprise Development and Research aims to emulate Babson, the small Massachusetts university known as the leader in research and teaching on entrepreneurship and small business development in the United States.

Funded through the Higher Education Funding Council for England's new Higher Education Reach Out to Business and Industry Consortium, the centre will give advice and training to small to medium-sized businesses. It will provide mentoring linked to graduate placements, offer skills analysis and strategy review, and coordinate the institute's business research and consultancy.

David Watkins, professor of management development at the business school, said: "Forget Harvard and MIT. By specialising for the past 20 years in owner-managed firms, Babson has become the business school that tops all the others in this economically vital field."

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The last international survey of colleges in the small business field placed Babson top with 900 points. No UK university scored more than 30.

Babson runs degree courses aimed at those who own businesses, or hope to do so, and those who will inherit them.

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One of the reasons for Babson's success is that its early graduates - and other successful US entrepreneurs - have reinvested some of their new wealth in the next generation by endowing Babson with funding to create new buildings, professorships and libraries.

"That scale of private sector support is virtually unknown in the UK," Professor Watkins said.

"We are fortunate to have secured funding from the Higher Education Funding Council of Pounds 550,000 over four years to work with owner-managed firms.

"This is a great start, but while new British money tends to get recycled into arts sponsorship, little private funding gets channelled into educating the next generation of wealth creators. That gives the Americans a long-term competitive advantage over Britain and other European countries."

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Professor Watkins is internationally known as one of the academic leaders in the field of small business enterprise. He introduced the first formal enterprise development course as a degree in 1972 and the first open access development programme for small businesses in 1976, which later became the basis of the national Business Growth Training initiative. He was instrumental in the organisation of the National Business Development conference in the UK.

Allan Bates, head of business strategy at the business school, said the initiative would provide a focus and a rich information source for local small businesses.

"This sector has been identified by the government as crucial to economic development," he said.

The centre will be opened on October 24.

Details: Southampton Institute,