A nation of shopkeepers no more

 
Wed 24 Sep 2014

"L'Angleterre est une nation de boutiquiers," as Napoleon so famously said.   Except that of course, as with so many things people are famous for saying, he was actually quoting Adam Smith, the father of the study of state economics.

It’s not true anymore.  Today Britain has cast off the shopkeeper’s apron to become a nation of entrepreneurs.  There are 4.7 million microbusinesses in Britain today with an astonishing 400,000 of them established in the last year alone.  The EU defines a microbusiness as, “an enterprise which employs fewer than ten persons and whose annual turnover and/or annual balance sheet total does not exceed EUR 2 million.”  When you look at it like that, you would think the economy must be thriving.  The problem is that many of those new ventures were founded in desperation, their owners seeing no alternative source of work in an unforgiving labour market. 

Many of these companies comprise just the boss, sometimes paying him or herself less than minimum wage in a bid to keep going.  On the other hand, if those businesses can be made to thrive, their potential is enormous.  If each hired one new worker, unemployment would be eradicated at a stroke.  It is no exaggeration to say that the future of the economy is dependent on a big proportion of these businesses being successful.

The Post Office reckons it can help.  At a breakfast session at the Labour Conference the organisation explained its plans to turn each of its almost twelve thousand outlets into business hubs for just these people.  The theory goes that the smallest businesspeople have nowhere to turn for advice on raising investment capital, on regulation, on how to go about employing staff.  The Post Office plans to take advantage of its position as a trusted brand to supply this information and to act as a brokerage for those public and private organisations in a position to help.  The logic goes that virtually every business already has a relationship with its local post office and that it will be seen as a natural venue for networking, sharing information and finding advice.  Post Office bosses also hope, not unreasonably, that part of the spinoff from this initiative will be more trade for them.

Cometh the hour, cometh the man (the Bible, Sir Walter Scott or PG Wodehouse – take your pick) might be better in this instance as Cometh the businesses, cometh the business support.  The fact is the Post Office plans are hugely comforting and encouraging, reflecting as they do many of the things already in place at Milton Keynes College, and no doubt at other business-oriented colleges around the country.  The Business and Leadership Centre is designed specifically to offer the same kind of advice and support and connectivity.  It’s a place where companies engage with others great and small and build relationships.  We’ve said to small businesses, “Come in and use this as your own home,” with state-of-the-art meeting and training facilities, a boardroom, conference hall, computer facilities, phones, desks etc.  It’s professional, affordable and has already had notable successes, often where companies have also engaged with students, working with them, employing them and providing them with training or even services. Like the Post Office, the College is a trusted brand and rooted in the community.  Like the Post Office, there is a demonstrable benefit in terms of potential opportunities for students.

The crucial word here is “local.”  Around the country each Post Office or college business hub will be different from the next, defined by the people who run them (most post offices are franchises so run by entrepreneurs themselves) but also by the specific demands of business in each area.  Central government is really bad at this kind of stuff, specifically because it’s central and therefore incapable of designing processes which fit everyone everywhere.  If funding were devolved down to the organisations like ourselves offering these kinds of support and encouragement how much could be achieved?  If companies could go to a local credit union or institutions like the famous Bank of Dave in Burnley where savers and borrowers receive preferential rates because the institution is designed to support business and not to profit from it, how much could be achieved?

It’s another demand for cash of course at a time when government says it’s already fished out everything available from the back of the sofa.  The thing is, the risks to the economy of large numbers of these 4.7 million companies failing are dreadful to contemplate.  The benefits of large numbers of them succeeding are potentially transformational.  FE and the Post Office, such diverse brands but both fundamentally community-based, have simultaneously identified an opportunity which can only be exploited at the most local level for the good of all.  This is devolution writ large demanding intelligent national investment in every area.  It also involves trust.  Trust from government that people on the ground at a particular place and time will spend its money wisely.  Which is rather the whole point of devolution, isn’t it?

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