Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

Business Extra: SMEs after the budget cuts


Small and medium-sized businesses can rarely have enjoyed so much attention as they are gaining at the moment. It seems that hardly a day goes by without a minister or other opinion former marking them out for playing a key role in the shake-up of society that is expected to be part and parcel of the Coalition’s attempt to bring down the national deficit.

Of course, not everybody is convinced that curtailing public spending is the way to bring on an economic recovery, with many questioning how business as a whole is supposed to expand when so many of Britain’s traditional trading partners are suffering economic woes at least as serious as our own. Then there is the issue of how many people who lose their jobs in the public sector as a result of the cuts will be able to find employment in the private sector (even if they can make the attitudinal adjustments supposedly necessary).

But nobody could accuse the SME community of not being up for the challenge. Which is just as well. Since this would appear to be the perfect opportunity for growing businesses to demonstrate that they are as dynamic, imaginative and as proficient at wealth creation as they claim.

Fortuitously, this month sees the latest Global Enterprise Week, an initiative that began life as Enterprise Week back in 2004 and acts as a sort of showcase for entrepreneurs, with a particular emphasis on promoting enterprise for young people. This year’s event, which begins on November 15, features such successful entrepreneurs as Brent Hoberman, co-founder of lastminute.com, Julie Meyer of Ariadne Capital and Sara Murray, founder of the price-comparison site confused.com as well as such established business leaders as Richard Lambert of the Confederation of British Industry; David Frost of the British Chambers of Commerce and Miles Templeman of the Institute of Directors as well as Tom Bewick, chief executive of Enterprise UK, which co-ordinates the British end of the week.

The launch, to be held at the London HQ of Google, is due to be attended by the Prime Minister, who has already pledged his support for the “doers and grafters, the inventors and entrepreneurs” whom he believes will lead the recovery. He has already moved a step beyond the rhetoric of supporting enterprise by appointing former businessman and Thatecher-era Cabinet minister Lord Young to head a review aimed at ending the state’s 'institutional bias' against awarding contracts to smaller businesses. So it will be interesting to see what he has to say to encourage those who have been charged with leading the economic recovery.

In the meantime, Enterprise UK’s Bewick is confident that the '32,000 events in over 100 countries around the world, exposing people of all ages to quality entrepreneurial experience' will be inspirational in setting the 'enterprise-led recovery' in motion. However, it will surely take more than a few well-judged case studies to really get things going. Once the deficit reduction appears to be under way, taxes will have to fall so that there are greater incentives to create wealth. And the Government will need to help encourage training – in similar ways to the help promised for adult apprenticeships.

Another way could be for the Government to encourage large businesses - which have as much interest in a thriving economy as so-called entrepreneurial concerns - to divert some of their corporate responsibility activities towards areas that could make a real long-term difference. One such initiative has been launched by the consulting firm Accenture. It has an international corporate citizenship programme Skills to Succeed that it hopes will by 2015 equip 250,000 people with the skills to get a job or build a business.

In Britain, this involves it working with the Prince’s Youth Business International to provide mentoring, training and other assistance to disadvantaged young people so that they can become successful entrepreneurs, helping the Prince’s Trust place 40,000 young people a year in jobs or education and training and using the Eden Project to give hundreds of unemployed young adults the practical skills to succeed in the labour market.

Leave aside for the moment the fact that this should be the job of the education system - which currently seems to be failing the country as much as the young people who go through it. Business, of all shapes and sizes, needs to show its real commitment to enterprise and to a 'can-do' attitude by stepping in and sorting out the training issue while - with any luck - the politicians and policymakers can decide how they can properly educate and equip for work the next generation.