The SMEs sector decreased in both number and turnover and most of the business owners are not overly optimistic looking forward and plan to downsize their businesses
On the edge of a global crisis, local businesses are increasingly affected by a boomerang effect on local communities. If we only take into consideration employment in the small and medium businesses, according to FSB (UK Small Business Statistics | FSB, The Federation of Small Businesses), the total employment in SMEs was 16.3 million (61% of the total), whilst turnover was estimated at £2.3 trillion (52%). SMEs are also one of the major contributors to both national and local budgets.
Therefore, the shrinking of this sector of the economy should be a major concern for all of us.
In this context, what could local government do more to support local businesses? To answer this question, I applied a triple perspective: what business owners from my local community shared with me, my knowledge as an academic and an international perspective and this resulted in the list of actionable ideas that follow.
1. Organise and Facilitate Local Hubs
Local governments could organise online and physical hubs where representatives of local businesses could come, network with each other, exchange good practices and ideas, and identify ways of supporting each other. Representatives of the local government could actively listen to the representatives of the government and priorities could be addressed faster. The access of SMEs to the local government should be easy and straightforward.
Within the hubs, new initiatives related to innovation and sustainability could be initiated and promoted. When talking about a circular or a greener economy, all participants need to be involved and collaboration is the key.
2. Free advertising, promotion opportunities and enhanced access for local businesses. Encourage ‘shop local’ initiatives
Local governments could dedicate spaces where local businesses could come and promote themselves and interact with customers and business partners. Local businesses could also have access to advertising physical and online space (the website and social media pages of the Council) and initiate ‘shop local’ campaigns and incentive schemes.
Local government could also ensure better access for main street businesses that could be in various forms.
3. Reducing taxation and increasing access to funds
Business rates could be reconsidered to lower the pressure on small local businesses and facilitate access for new businesses. Local Councils could also inform about numerous opportunities for funding, offer financial advisory and facilitate access to grants and small business loans for local businesses. Local government could also organise systems of raising funding for local businesses that could go into grants.
4. Actively promote entrepreneurship
In partnership with local schools and universities, local councils could offer entrepreneurship programmes to stimulate and support local potential and existing entrepreneurs. Universities, through their research centres, could also support local entrepreneurs to access innovation funding and local governments could be the facilitator of the networking between academia and entrepreneurs.
5. Support employability
One of the main concerns of local businesses is the lack of skills and it has increased in the last years. An efficient way of addressing this issue would be by apprenticeships, internships, and professional reconversion programmes. These could also be achieved by reinforcing the cooperation between local stakeholders such as schools and universities, job centres and businesses. Local governments could act as facilitators of this cooperation though organising job fairs, conferences or focus groups. New projects with quantifiable results could be initiated.
Local governments could facilitate and promote the development of new skills related to the future economy such as those related to green energy or artificial intelligence. Instead of expecting sacrifices, the local government could be the helping hand that contributes to the sustainable growth of local businesses and local communities.
This piece was written and provided by Dr Alina Vaduva, Lecturer in Business Strategy at The Royal Docks School of Business and Law, University of East London.
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