Support for business

Identifying good practice in business support policy is critical in understanding what works best in developing the right infrastructure in creating and developing enterprise and innovation at a regional and national level.

However, all too often there is a habit among policymakers to reinvent the wheel when it comes to instigating new policies to support the private sector.

That is why a recent publication by the European Commission in identifying good practice in SME policy is to be welcomed. These include a range of projects which could be adopted here in Wales to support the business community.

For example, the innovation vouchers scheme from Austria is a simple scheme which tries to encourage firms to take the first step in working with the university sector. In effect, it provides a subsidy of 5,000 euros for small businesses to buy services such as studies on ideas, and support in developing prototypes from the university sector.

The reason for the success of the scheme is that the application takes just five minutes and the vouchers are issued within three weeks.

Another good practice initiative, this time from Spain, offers tailor-made, specialised consultancy and economic support to help businesses design internationalisation strategies. The programme has three stages, namely self-diagnosis of competitive position and internationalisation potential; defining the internationalisation process and market research; and implementing an internationalisation plan.

The financial support from the programme covers 80% of expenses incurred and includes regular follow-up monitoring to ensure that the companies consolidate their position as regular exporters.

Finally, OSEO – the French Public Innovation Agency – has developed a voluntary “SME pact” where large companies and large public agencies voluntarily commit themselves to buying in more goods and services from innovative local small and medium-sized enterprises (SMEs).

However, unlike many public sector procurement programmes, there is no attempt to pre-select the small firms. Instead, large businesses select the most appropriate firm by exchanging information on the services provided by existing small suppliers.

Innovative SMEs are then supported through a variety of measures such as technology meetings to exchange information between themselves and large companies and assistance in negotiating intellectual property rights. Grants are also available to help firms adjust their practices to meet the needs of a large company, who guarantee to provide a third of the funds needed.
Not surprisingly, as it is focused on innovation and increasing competition, the SME pact has been an outstanding success and the initial target of 300 participating firms has been tripled.

The programme has also been adopted by business support organisations in both Italy and the Netherlands.

Certainly, the Welsh Assembly Government should be looking more closely at these examples of best practice to examine whether they could be applied here. However, given that only 10 policy initiatives are chosen every year as good practice, Welsh policymakers should rightly be proud that the Youth Enterprise and Entrepreneurship (YES) Strategy has been identified as one of the best in Europe.

This follows the success of the Fast Growth 50 project, which was also recognised several years ago by the European Commission as an example of how to promote enterprise at a national level.

For those of you who are not aware of this strategy, YES nurtures entrepreneurial young people from the age of five upwards through activities such as mentoring, workshops and bursaries. For example, through the Dynamo programme, it has established a pool of 300 entrepreneurs who visit schools, colleges and universities to inspire young people. In addition, teacher training is offered and interactive curriculum material provides entrepreneurial knowledge. As a result, the National Curriculum in Wales now includes a statutory requirement for the teaching of entrepreneurial skills.

Not surprisingly, YES formed part of the Entrepreneurship Action Plan for Wales whose aim was to develop a greater entrepreneurial culture within Wales. However, despite successes such as the YES campaign, the momentum from the initiative shown by Welsh policymakers has stalled.

Indeed, support for enterprise is needed more than ever in the current climate especially when, as a leading business support leader said last week, the reduction in the amount of interest in entrepreneurship and a drop in people indicating that they are prepared to go into business.

More tellingly, he suggested that the Welsh Assembly Government was not as committed to investment as they were three or four years ago, and there needs to be more investment in entrepreneurship.

Some have argued that the Assembly Government is focusing too much on cutting internal costs rather than developing new programmes that can make a difference to the Welsh economy. Whether that is the case or not, it is clear that Welsh policies, such as YES, can be developed to make a difference to the entrepreneurial potential of this nation. All that is required now is the political and financial commitment to ensure that they actually continue to do so.

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