{"id":1378,"date":"2010-11-01T09:31:58","date_gmt":"2010-11-01T09:31:58","guid":{"rendered":"http:\/\/localenterprise.wordpress.com\/?p=1265"},"modified":"2010-11-01T09:31:58","modified_gmt":"2010-11-01T09:31:58","slug":"dear-lord-young","status":"publish","type":"post","link":"http:\/\/realisedevelopment.net\/index.php\/2010\/11\/01\/dear-lord-young\/","title":{"rendered":"Dear Lord Young…"},"content":{"rendered":"

Congratulations\u00a0on your appointment as the new enterprise csar<\/a>. \u00a0I am sure that the unpaid and part time role will keep you engaged.<\/p>\n

I am pleased that you will\u00a0look at how to ‘encourage people to start businesses rather than find jobs as employees’<\/em>. \u00a0It makes a refreshing change from the usual line of the ‘private sector creating jobs’. \u00a0As we know big businesses have, on the whole, been laying people off over recent decades rather than taking them on. And just how long can we keep going with the mentality of ‘gizza job’ and ‘on yer bike\/bus’ in a 21st century globalised and localised economy?<\/p>\n

Can I suggest you take an early look at the semantics of ‘encouraging people to start\u00a0businesses<\/em>‘ \u00a0and the very practical consequences that are\u00a0likely\u00a0to flow from it. \u00a0When a figure in authority, never mind Government, sets out to ‘encourage us’ to do something, some of us come over all\u00a0suspicious. \u00a0 Are you really interested in our well-being, or is there a more self centred game being played? \u00a0There is a good chance that in the very act of ‘encouraging us’ you serve to engender resistance to the very idea you wish us to entertain. \u00a0Psychologists call this reactance<\/a>.<\/p>\n

I have not read in detail the guidance on the Regional Growth Fund. \u00a0But I understand, from\u00a0correspondence\u00a0with someone that has, that it specifically says that self-employment is not something it should be used to promote. \u00a0Instead it should be used to encourage jobs created by employers. \u00a0There seems to be somewhat of a contradiction here.<\/p>\n

But back to the point of encouraging \u00a0people to start businesses. \u00a0I\u00a0believe\u00a0that what you really\u00a0want\u00a0to achieve is a society where more people do start businesses that survive and thrive. \u00a0This should be the real policy goal.<\/p>\n

So how to get there?<\/p>\n

I would advocate that you should dissuade <\/strong><\/span>as many people as possible from starting new businesses. \u00a0Only for those people who insist that this is something that they have to do<\/a> should we roll up our sleeves and help. \u00a0By working in a focussed way with a relatively small number of highly committed people we might have a chance of getting some real success stories. \u00a0And as we know, success breeds success. \u00a0More positive role\u00a0models\u00a0out there leads to more people following in their wake. \u00a0This contrasts with the current approach of offering a little support and encouragement to a lot of people, resulting in high business failure and loan default rates and a widespread perception that a journey into enterprise is\u00a0likely\u00a0to leave you worse off than when you started.<\/p>\n

Can I also suggest that you do not wave money at people, New Enterprise Allowance<\/a> style, \u00a0in a bid to encourage them to start a business? \u00a0The\u00a0reality\u00a0is that we have armies of advisers out there wading through thousands of appointments with people who are often half-hearted in their aspiration to start a\u00a0business, but whole hearted in their\u00a0commitment\u00a0to\u00a0securing\u00a0the money that they see themselves as entitled to. \u00a0Instead of offering them a carefully\u00a0calculated\u00a0economic incentive (calculated to make things\u00a0cheaper\u00a0for the treasury I suspect rather than enabling people to\u00a0start\u00a0businesses with a decent level of working capital), offer them nothing, except excellent and committed advice, coaching and support that they need to put together an idea that is worth investing in. \u00a0 I suspect that almost overnight the numbers of individuals engaged in ‘enterprise development’ would fall dramatically, but those that remained engaged would be there for the right reasons – to develop long term and sustainable\u00a0strategies\u00a0for self employment or entrepreneurship – and not just to secure a grant or a loan that they can\u00a0default\u00a0on with relative impunity. \u00a0 NB don’t expect many of the enterprise support agencies to support this idea. \u00a0They have developed business\u00a0models\u00a0that survive on a mass market for enterprise\u00a0development.<\/p>\n

Of course access to finance matters. \u00a0But let others be the gatekeepers to it, not those who are supposed to be coaching\u00a0clients\u00a0to develop their enterprising ideas.<\/p>\n

Then of course we have the challenge of helping the hundreds of thousands of people who will be faced with redundancy over the next few years. \u00a0Can I suggest that we put in place a service that does not ‘encourage them to start a business’, but that does encourage them to fully explore and understand all of their options? \u00a0I am sure that many of them have the potential to become successful, if initially reluctant entrepreneurs, if only we\u00a0can\u00a0provide them with the right kind of support.<\/p>\n

And finally, don’t get all hung up with ‘national voluntary mentoring schemes’ and traditional\u00a0business\u00a0support organisations. \u00a0Instead get interested in what you can do to encourage communities to provide the support that\u00a0local\u00a0people need in pursuing their enterprising ideas (these may be much wider than self employment and business start ups). \u00a0Some of the more imaginative enterprise coaching schemes have started to develop community panels to provide practical\u00a0assistance to\u00a0local\u00a0people. \u00a0This is an approach that\u00a0can\u00a0certainly be developed further.<\/p>\n

There is tons of potential out there – and at the moment we are wasting much of it.<\/p>\n