Whilst there is a massive public relations exercise going on by WAG to persuade everyone that the business community is wholly behind the new Economic Renewal Programme (ERP), there seems to be a growing disquiet amongst the vast silent majority of small businesses in Wales that they have, to use an academic term, been shafted.If you read some of the comments on this blog last week, it is clear that there is increased concern that small businesses in Wales will be left by the wayside in the drive for a sector-led economy where civil servants are under the delusion that it will be large firms creating the jobs of the future.
As one commented, the Department of Economy and Transport "need to thoroughly explain how help for SMEs will change and how much help they will gain/lose as a result of the ERP. Basically, show how SMEs if they will be better off of not."
Given the way that the needs of the small business community in Wales have been largely ignored by this consultation, one has to ask whether small firms have any voice left at the highest levels of government in Wales, as it seems to be the opinions of larger firms - and the organisations which represent them - which dominate this document.
If anyone had bothered to ask the thousands of small businesses in Wales for their views on business support, I am sure they would have said that it is not business support per se that is wrong, but the bureaucratic and time-consuming processes that they have to endure.
Of course, it was not the business community in Wales that put this system into place after the demise of the Welsh Development Agency in 2005.
That blame must be laid squarely at the door of senior civil servants within the Department of the Economy and Transport, the same individuals who have now devised this new strategy.
As if embarrassed by their failure, they have decided to scrap the support system for small businesses, whereas the more honest approach would have been to admit their mistakes and order a wholesale reform, so that assistance could be accessed easily and quickly by business.
Of course, it was not the business community in Wales that put this system into place after the demise of the Welsh Development Agency in 2005.
That blame must be laid squarely at the door of senior civil servants within the Department of the Economy and Transport, the same individuals who have now devised this new strategy.
As if embarrassed by their failure, they have decided to scrap the support system for small businesses, whereas the more honest approach would have been to admit their mistakes and order a wholesale reform, so that assistance could be accessed easily and quickly by business.
By abandoning help to thousands of entrepreneurs who could, with the right support, have the ability to grow their businesses and create jobs, the Minister for the Economy and Transport has taken an enormous risk with the Welsh economy.
At a time when the regional development agencies in England are being abolished, he had the opportunity to create a real competitive advantage for the Welsh economy by creating an effective business support structure that, through a repayable grant system, would have been sustainable.
Unfortunately, those thousands of small firms – which he had the audacity to call the backbone of the Welsh economy during the launch of the ERP last Monday– will be the main losers from a strategy that will starve them of support and investment when they need it the most.
Only time will tell whether, as result of this new programme, the Welsh economy will lose as well.
Comments
Bringing in a vanity investment has always brought the Cardiff Bay Mob out in force. A bit of positive news as 100 contact centre posts are temporarily moved to a business park in Tredegar or Deeside. Investing in and Supporting 30 local small businesses and startups might create more jobs, increase skills etc but you won't see a minister or any of their underlings anywhere near these less glamorous signs of economic growth and renewal.
Whilst I will not miss the bureaucracy, inefficiencies and dimwittedness of FS4B, I have not heard any logical explanation of the casual and naive abandonment of SIF and in effect IBW by the DET.
Because of the lack of details in the ERP, it is a hard task to work out how it will effect SMEs. Having spoken to many in the sector this week, I believe there will be come hard balls thrown at the Deputy PM very soon.
I hope he gets a very loud wake-up call for the sake of the Welsh economy.
“Some of our messages since January clearly haven’t been considered when it is going to be the private sector who will lead the economic recovery.
“What we need now is greater clarity from the Government on how the items set out in the ERP are going to move Wales from the bottom of the economic ladder to the top.
you get the lopsidedness of the ERP when you get a Minister who knows little or nothing about the area they work in, Civil Servants with a particular focus/agenda and well funded lobbyist who shout the loudest, its not very edifying or always helpful to the Welsh economy, but since when has WAG been open to ideas particularly in relation to small business in Wales that would actually help.
the person spec reads....
"Any CEO of a company in Wales or with welsh roots that works outside Wales are the essential criteria"
The job discription includes
"WAG is radically remodeling its structures of support, this includes funding and mechanisms for interfacing with the sector"
Obviously DE&T are looking for a someone with a big business background. How many SMEs have CEOs to put forward for this post? As predicted, the sectors will be dominated by CBI members.
How is this a step forward for the Welsh economy?
I had a sarcastic comment on my blog about hairdressers and nail technicians I don’t think the idiot who keeps trolling me realises how many are actually employed in this sector in Wales and how much money is spent there.
People poo poo craft arts and beauty industries because they are not heavy industry or geeky, how sad is that. It’s in the same box as forecasting these growth sectors it’s never worked, look at al the initiatives that have fallen by the way side trying to do that.
As you said meanwhile there are small business that with less red tape and some seed money could create sustainable jobs.
Realism would create real jobs
Pity we couldnt get some funds to write a new EAP for Wales
I honestly don't understand why Ieuan has not called you in before hand as he must have been aware what the reaction would be, especially from you.
On the other hand, many of us are glad that you don't kowtow to WAG and continue to speak for the silent majority.
Any hints?
A study in Australia in 2000 by Rolffe Peacock (Failure and assistance of small firms) showed that a root cause of business failure was management inefficiency i.e inexperience. Therefore, it could be argued that support for new start up businesses especially in terms of training could be justified.
In terms of financing an OECD Policy Brief 'Financing SMEs and Entrepreneurs' shows that in 2005 that 79% of funding for SME in Europe came from banks. Of course, the banking collapse has made financing difficult if not impossible for some.
Nevertheless, a successful business should still be able to continue, with difficulty maybe, but at least survive. I’m not sure it’s the role of government to make up the deficiency in lending in the private sector, especially when it has record deficits of it’s own.
Therefore, I humbly suggest that the pertinent question to ask the WAG is:
What steps will they take to reduce business costs for SME now that support for SME (other than in target areas) is to be reduced, if not removed completely .
Can I ask whether the Government is best placed to offer ‘support’ for SME beyond targeted areas ?