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A Plea to LEP Board Members

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Do you ever question the belief that more economic growth is the only route to recovery?

That we can consume our way to a ‘better’ future by simply consuming more stuff, more quickly?

Do you ever consider that perhaps it is time to at least be open to the merits of leading in a different direction?

I am neither anti-capitalist, nor anti-growth but recognise these are double edged swords rather than cure-alls.

Working with Danone recently they introduced me to their compass test of business development, where any change has to meet the challenges of the four compass points.

  • N = Nature – can the proposed development be sustained in a one planet scenario? Does it fit with the laws of nature?
  • S = Social – will it lead to a socially just and improved situation?
  • E = Economic – will we see a return on investment? Usual investment and payback protocols apply and can be flexed
  • W = Wellbeing – will the proposed project increase health and wellbeing for the most people

Yes, the E matters. But not at any cost. So please encourage the LEPs to explore scenarios much more interesting than just the accrual of GDP.

Be more than just mere ‘whipping boys’ for the Treasury, and help us to find a genuine New Deal.

Reasons for Not Doing Micro-Enterprise Support

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So just why is it so rare to see decent business support provision developed specifically with the micro-enterprise in mind?  Well I suspect because there is a perception amongst the powers that be that it is hard, expensive and wasteful.

  • There are just too many micro-enterprises to offer more than a generic website.
  • Micro-enterprises are just too heterogeneous – they all have different wants and needs.  There is no one size fits all solution for them.
  • They just don’t have the capacity to absorb and act upon the services and guidance we offer.  There is no HR team to work with our skills offering, no marketeers to get involved with our business development work.
  • Micro-enterprises just aren’t able to engage strategically with support.  Everyone in the micro-enterprise is too busy doing their day job to invest in their development. They have no discretionary time to invest.
  • There is little return on public investment in micro-enterprise. They start small stay small and die small.  They are just lifestyle businesses that have little potential for job creation.
  • We don’t really understand them.  Our boards and committees are overloaded with people from big business.
  • To make a significant economic impact it is much easier to work with the big employers.  One big employer could trigger thousands of apprenticeships across the UK.  We might need to work with 10 000 micro-enterprises to find just 100.
  • Big businesses understand how the game is played.  They come to breakfast meetings, read policy papers and generally know how to work with the system.  Micro-enterprises tend to be much more opinionated, impatient and generally difficult.
Personally I think that each of these are actually reasons why enterprise support should be emphasised.  It is a massive market, driven, focussed and unlikely to indulge in pointless grandstanding and meetings.  The diversity of the sector means that is faces every problem and opportunity imaginable but also that the sector has all of the experience and skills within it that it requires.  The challenge is to get the know-how flowing. HINT when dealing with a large market this is not done by fielding a few experts.  If we can influence just a small part of the micro-enterprise market then we can make a massive difference.
Perhaps it is time we changed the rules of engagement to recognise how micro-enterprises work.  Drop the committees, agendas and the policy reviews and start committing to action and learning instead.

The Alternative LEP and Micro-enterprise

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Our alternative LEP will have a board stuffed full of owner managers of micro enterprises.

Don’t get me wrong we will have ‘token’ small and medium sized board members too – but will draw the line at Big Business. They have enough lobbying clout and influence to fight their own battles.

So what type of policies would our board look at developing?

  1. Programmes to promote local supply chains and sourcing from micro-enteprise wherever practical
  2. Conduct a major overhaul of commissioning and procurement processes in the public sector (local authorities and NHS as primary targets) and where possible big businesses to ensure that they are as micro-enterprise friendsly as possible
  3. Divert training and learning budgets away from FE colleges and pay owner managers to take on apprenctices and teach them current, commercial practices.  Move the locus for learning from the class room into the workplace.
  4. Develop ways to enable micro-enterprises to co-operate and collaborate so they they can punch above their weight. Promote collaborative consumption and production.
  5. Promote local economy arguments and the importance of keeping cash in local peoples hands rather than handing it over to multi-nationals

What other policy areas would an alt-LEP that understood micro enterprise seek to develop?

High Growth/High Start Up Rates – and why we must not chase them

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Should we throw our limited resources at businesses that we believe have high growth potential or should we just go for lots of start-ups, knowing that a minority of them will experience high growth anyway?  I can imagine LEPS all over the country worrying for seconds over this conundrum.

The plain truth is that both are equally foolish policy goals.

We simply can’t pick winners/high growth businesses. So how do we know which to resource?

And as Drucker said ‘you can’t have the mountain top without the mountain’ . High growth businesses emerge from a strong and vibrant enterprise ecology. An ecology that is diverse, tightly knit and well connected (bridging and bonding, social and cultural capital).

Focus on building the mountain and the top will look after itself.

But please don’t build the mountain by rushing to increase the start up rate.

When we do this we just increase the failure rate too and that undermines aspiration and confidence. So start fewer businesses, but make sure they are good ones, team starts, well thought through and researched. Get survival rates into the 90%s after three years. Not just survival, but successful. Allow these small but significant success show the way to others.

So set up a broad enterprise ecology – lots of people with ideas and the confidence to act on them (this is not just about business but about social impact, culture, festivals, campaigning and so on) and build social networks, communities, that know how to support their members.

Invest your economic development budget in supporting people, who really are committed to making things better, and building communities. Smart, confident people in competent communities will not only give you the economic outputs that you require – but they might just give you something much more interesting as well.

I expect these ideas to be dismissed by those who have High Growth and Mass Start Up Programmes to sell, and by those running economic development teams who have for decades been buying these programmes and commissioning evaluations that say ‘much has been achieved but much remains to be done’.

 

But perhaps some will see that now is as good a time as any to try something new….