In the 1980s, the corporate sector worked hard to establish and support local enterprise agencies. They recognised the importance of a healthy small firms sector – as suppliers, as customers and as creators of new jobs.
During the 1990s, large firms have concentrated in other areas, especially education and the environment. Whilst these remain important, I believe that sustaining and building the small business sector is as important as ever. Small firms are central to the UK economy because of their role in the supply chain, the competition they stimulate and the ideas and products they bring to the marketplace. The 3.7 million small and medium-sized enterprises (SMEs) account for over half the UK’s economic activities, provide 56% of non-government jobs and (excluding financial services) 52% of turnover. Smaller firms are, and will continue to be, the main creators of new jobs.
I sincerely hope that the Small Business Service will be able to re-excite interest amongst larger firms. In the SBS, we will be aiming to help small businesses improve their competitiveness and to assist people from all communities who wish to start in business. This agenda is part of a concerted attempt to reduce social exclusion, so larger companies that help us will also be contributing to community regeneration.
Business Links and enterprise agencies would, of course, appreciate financial support. But businesses can help in many other ways. Secondees, for example, not only provide an extra pair of hands, but they can transfer knowledge and expertise. For most individuals, secondments provide good personal development And secondees can be short placements, perhaps as part of a longer induction process, for those on the management track.
Larger businesses can offer space on internal training courses – both to owners of small businesses and to staff of Business Link partnerships. They can act, as many already do, as hosts for Inside UK Enterprise, allowing others to learn from their experience.
Through initiatives like Business Bridge, larger companies can provide training and mentoring. They can assist smaller firms by being clear about their purchasing criteria – not special treatment, but simply knowing what is required so they can market themselves better to larger businesses. BITC’s Race for Opportunity campaign, for example, is encouraging member companies to look at their purchasing practices from minority ethnic business.
Larger companies can often provide assistance in kind – as companies like KLM UK and Holiday Inns have done for PNE: valuable support at a cost much less than the value to the beneficiary.
A big challenge for SBS is mitigating red tape and regulations. These add to the burden on small firms already fully complying with payroll requirements, introducing new personnel procedures, etc. Big companies could offer ‘back office’ services to smaller businesses – and think about sharing any new software solutions to smaller businesses through SBS!
Businesses need to adopt sensible business practices – in relation to people development, the environment, the community, etc, because it makes good business sense. SBS will aim to ensure that Business Links themselves adopt, and promote, sensible business practices as core values. Join us in the challenges ahead.
David Irwin has been appointed as the first Chief Executive of the Small Business Service and takes up post on 6 March. For nearly 20 years, he was Director of Project North East, one of the UK’s leading enterprise and economic development agencies, which he co-founded in 1980. For two years, he chaired the National Federation of Enterprise Agencies and is a member of Gateshead Health NHS Trust. A graduate of Durham and Cambridge Universities, he completed his MBA in 1986.
Corporate Citizenship Briefing, issue no: 50 – February, 2000