Skills for a Sustainable Business Enterprise INTERVENTION POLICIES, COSTS AND BENEFITS

AIM To appreciate the existence and reasons for small enterprise intervention policies. Learning Outcomes: To understand what policies exist around enterprise intervention and why these policies are considered valuable.

The basic message to government is that it should do less and better, rather than more and worse. The clear message… is in creating a suitable macro-economic framework in which firms can prosper. (Story 1994) GOVERNMENT SUPPORT AND POLICY

To help build an enterprise society in which small firms of all kinds thrive and achieve their potential, with an increase in the number of people considering going into business, an improvement in the overall productivity of small firms, and more enterprise in disadvantaged communities. (DTI) Small Business Service UK POLICY

(DTI) Small Business Service Building an enterprise culture Encouraging a more dynamic start-up market Building the capability for small business growth Improving access to finance for small businesses Encouraging more enterprise in disadvantaged communities and under represented groups Improving small businesses' experience of government services Developing better regulations and policy

Objectives of SME policy? Increase employment Increase number of start-ups Promote use of consultants Increase competition Promote efficient markets Promote technology transfer Increase wealth POLICY OBJECTIVES

EU Member States policy Four main objectives: 1.Creation of employment. 2.Competition. 3.Strengthening the production chain. 4.Diversification. POLICY OBJECTIVES

Key Points As businesses go through different stages of development there are different needs and opportunities for intervention. First stage is the development is of an enterprise culture (e.g. education). Preparation for enterprise may benefit from intervention e.g. experience, skills, finance, networks and other resources.

Key Points Start-up grants or loans may help to overcome barriers. Intervention to promote business skills and confidence, advice and information are valuable possibilities.

Macro-policies Interest rates, taxation, public spending, inflation… Deregulation and simplification Cutting ‘red tape’ Specific sectors High tech, rural, community, ethnic, regional… UK POLICY FOR SMEs

Financial Assistance Grants, loans and other schemes Indirect Assistance Information and advice, business training, enterprise education, consultancy initiatives… Relationships Business Link, Chamber of Commerce etc. UK POLICY FOR SMEs

EU instruments for intervention Direct subsidies or grants Subsided loans Tax relief Export guarantees Subsidised start-up for unemployed Subsidised personnel Subsidised premises & running costs

ANY QUESTIONS?