Durham Small Business and Enterprise Symposium

Crook 20 Sept 2015. Completed draft 7^th Oct

The first point is the use of ‘small’, and also ‘lifestyle’ businesses and enterprises is seen as inappropriate and a hangover from the (continuing) political agenda on, rather than of, SMEs being the engine of growth and small must be something to start from and aspire to leave behind. In side talks, the usual themes of ‘what is small?’ continued to appear. Rather than perpetuate a set of comparative, circular, discussions, then perhaps the way forward would be to look again at the growth stages of businesses/enterprises and seek how best to define what further (institutional) engagement would be appropriate having defined the objectives of the business and its key stakeholders.

1. What became apparent are two separate, but wholly interrelated, strands: –
   1. ‘How To’

The ‘How To’ in terms of helping a business in its formation, shaping of its own objectives thence strategy and the agendas of the key people in such a business enterprise; the need to look at the resilience, the durability, the functionality as fit desired purpose of the business. No matter the motivations and incentives of a business, the churn rate remains a major issue as business fail (but hopefully people do not see elements under 1b)

• A step back to the process flow. Whilst evident we have articulated the steps, can we now show the core steps and look at the various alternate paths (along the core), which show, and reflect, decision points, divergence to differing states of business being.

1. ‘Why To’

This second theme is the ‘Why To’ – motivations and incentives for starting a business at personal or collective level and (noting the politics of employment) for causing people to become self-employed/enterprisers. In the individual and collective case, rarely is this to create employment as per government, or should we say establishment to encompass international partners who see MSMEs, social enterprise and cooperatives and production associations as the panacea for the post 2015 Development Goals (notably Goal 1, 8 and possibly 9, 3 and 2)¹

• Further work on the growing sense entrepreneurial does not fit with micro, particularly, and small business set up; the nature of survival, no alternative and the belief we are seeing the franchising of aspects of service provision particularly so as to be efficient in delivery of business models set up by large companies – delegation of powers within defined limits and without real reciprocity?

In many respects the elements fit back together since once the business moves from idea to working principle, then the pitch becomes essential. The pitch may be to one’s self to create resources within one’s sphere of influence. The basic could be simply finding time to turn an idea into a plan to be able to raise wider resources. The fact of the matter is virtually all of us require continuity in terms of earning a livelihood and those without a livelihood require basic support ahead of quite probably needing input on the tactical side of starting a business (even when they have the technical skills on which to base the business and may even have some of the managerial attributes for running the business)

We can also take forward work in the psychology of being an owner operator, sole practitioner, or enterprise manager requiring different personality traits through the phases of development and how we, as individuals are able to work through the range of emotions caused by the range of issues raised during the business start-up and development cycle. Even in businesses ‘established’ then we see the need for the support to people in, for example, family business continuity planning (and development)

• The suggestion is to (revisit) graphically mapping the process flows of business development then, with nice use of ICT, plotting the use of questions and answers to settings. Thus we map out process with the points of decision and how to gain from experience plus knowledge for specific points; a diagnostic, decision and referral chart

2. Local, regional and then State (international) level market scoping and development.

Issues have further developed with any number of areas of market now very much footloose. The issues of underpinning infrastructure are there and reflected in the nature of businesses now developing.

A quietly made point is in what is produced? Who is generating original product and then who is adding value to the product produced?

In this sense, a service should not be defined as a wealth creating product but rather a product requiring value to be added in order to afford the service. Taking this further, marketing, of any nature, is a primary product; but does it actually create wealth into an economy? Clearly, if we are talking a local economy, it may show net in-flow of income and thus, the capability to redistribution of income to areas where service aspects can be undertaken has been a critical driver of regional development policy. The question remains: are services creating net wealth?²

Further to markets, we have the reports on the ease of doing business where governments, knowing the factors, now manipulate to make the government look good; but does this necessarily reflect ease of doing business for MSMEs? http://www.economist.com/news/finance-and-economics/21667925-shortcomings-world-banks-business-climate-index-pulling-rank

• Further work tying markets to ease of doing business with specific measures to look at sole proprietor / vulnerable employment thence on through small business looking at tier breaks where decisions on the nature of growth by the enterprise have to be taken

3. Institutional knowledge

We have vast amounts as to what is required in terms of knowledge and the fundamental processes for establishing and making a business run. Our ways of nurturing people’s ideas and the resultant enterprises has undoubtedly developed immeasurably. However, there remains, as should always be the case, room for improvement and further growth in business support services; be this public sector, private for or not for profit and then mentoring and peer to peer support.

Proprietorial nature of knowledge? Have we managed to cultivate real depth in the last half century? Or have we developed tremendous numbers of different means to return to the basic building blocks without truly answering the fundamental questions in terms of incentives and motivations and then the core, key, elements for starting and running a business capable to meet the needs of those directly involved with the business (which may include satisfying stakeholders on a number of levels in terms of wider agendas to be served when accepting institutional engagement and/or largesse.

Market / value chain development. In a number of settings, this work is undertaken by development organisations. The sense is one where the work has evolved and improved; there remain issues but this is called market opportunity. A theme now resonating is the use of mass data collection approaches whereby ‘citizen input’ is used as a means to provide basic employment (could be used as a conditional cash transfer approach for those where the usual physical work immediate employment is not the best way forward). In the more developed economies, then the role of decentralised government structures could be reinvigorated?

4. One Size Does Not Fit All

The separation of How To from Why To is a critical point whereby we then look at the core process, thence cause the questioning of the process in terms of how it immediately interacts with the variables; notably the person and their own motivations and incentives.

Knowing the general flow, defining points for decisions, bifurcation to route A or B, then we start to be able to have the next steps whereby we see the process but then allow the individual to adapt and adopt.

Certain tools have transferred across cultural and communication divides. Have we systemised these in terms of the core process thence looking back as to how the core is adapted and adopted to fit individual and collective needs and the operating environments beyond the direct control of both the individual and the collective?

• Policy feedback loops – fitting to themes throughout, further work on the policy capability of MSME networks entailing political action at differing levels – see http://www.economist.com/news/britain/21665072-revival-labours-moderates-will-come-local-government-jim-mcmahon-reluctant-maquisard – how business is transcending ‘normal’ political affiliations. Lobbying moving into direct action collectives run and owned by MSMEs

5. Infrastructure to Facilitate Individual and Collective Growth

By its nature, opening up the process of enterprise development / business formation is an individual choice which immediately causes the desire to cooperate. Noting basic tools, Porter’s 5 Forces being a tried and tested point to commence, then an enterprise looks at suppliers and customers thus, whilst asserting independence, the collective desire to improve the overall market (for individual gross gains). Clearly, the other axis is apparent with competitors whereby we may see the desire to be isolationist if laws cannot protect. Collaborators is clear and an area where we have seen physical clustering and the capability of ownership back and forward along the product / market chain.

Regeneration work in Western Europe, cash for work in humanitarian crisis, urban programmes refocusing local economies, infrastructure works inside resilience and post conflict societies, the common thread is seeking the political statement driven by expediency by building physical infrastructure. The underlying principle has been picked in certain instances but, in others, left aside as expediency becomes modus operandi for the perpetuation of agents for change (rather than agents of change promoting the change required).

In key examples, notably in urban regeneration, wider stimulus for economic development, notably unlocking the entrepreneurial flair and creating opportunity for enterprise, has been created.

A major issue remains the ownership of base platforms on to which businesses and enterprises build their individual efforts. The control of the means of promoting, remains not with MSMEs or within the remit of MSMEs to influence beyond the incentives of the organisations providing infrastructure. This is not to say aspects of infrastructure should be under government ownership, the issues are with regard to protection of inventive and innovative business ideas; how to protect start-ups who have financial cash flow issues and are susceptible to being brought out (below ultimate market value) before they reach durability? Mutual support appears to be a key ingredient when we do not / will not see further controls on the movement to monopoly / oligopoly with regard to, particularly, internet control and, increasingly, electronic money. How to sponsor competition alongside accountability? Greater public liability companies? Continued innovation with regard to how to move beyond the internet? The role of crowdfunding and reciprocal trade agreements forestalling monetary transfers?

Collective knowledge and capability to influence the design (and ownership) of infrastructure which is fundamental for the durability of MSMEs

• Whilst this piece does not have the capability to go into depth, the point being made is this is where the breakdown has happened in terms of Global use of approaches where the ‘Why to’ is not applying as evenly as could be and the ‘How to’ is, as always, applied differentially given the lack of independent assessment against defined standards for business support.

Lastly, going young and relating the words spoken regarding enterprise in education or enterprising education, it is worth noting the clarion call from the Aga Khan Foundation – ‘Educating our Children for Life’. The International Baccalaureate has taken on new dimensions over the last two decades as the Labour Government made protestations of ‘Education, education, education’ there were no fundamental changes in looking at how education becomes more focused in terms of how the next generations make a living and build their quality of life.

The International Baccalaureate echoes points regarding ‘cooperative learning’, ‘constructivist’, ‘experiential learning’ and ‘inquiry based instruction’³. This last point is noteworthy as students, young people, are not seen simply as sponges onto which to pour processes, techniques and, often, dry facts; which are themselves all essential, but to look at how we learn and add value to these facts and processes. It is as much about deliberately shaping the attitude as culturing the aptitude.

I write from many points of ignorance where those who gathered in Durham, and those who were not with us, have far more knowledge and capability to draw on deeper, and wider, experience. The last points first: Germany and the manner

1 2015 Development Goals

2 Kenya example of tourism and employment in tourist industry

3 Lifted from The Aga Khan Academy – PYP (Primary Years Programme) at the Aga Khan Academy. These are factors within a seven factor development of young people – The others being: student centred and driven, and differentiation.