Making a big splash for small businesses

Apr 12 2008 by Dylan Jones Evans, Western Mail

OVER the past few years, the Federation of Small Businesses (FSB) has continuously pushed the case for entrepreneurs across Wales.

By taking the policy fight directly to the Assembly Government and other public bodies, it has helped to get the viewpoints of your average owner-manager across to politicians.

However, in a country where big is still beautiful, some clearly remain unconvinced over whether the FSB and its members, many of whom are micro-businesses, should have any voice in the way business support is managed.

Such attitudes seem to conveniently ignore the important role the FSB has played in supporting small firms in Wales and across the UK.

Indeed, it is easy to forget that, before 1999, the FSB was not a major lobbying organisation within Wales and mainly followed the lead of the London office. As a result, it was largely ineffectual in influencing Welsh Office policy.

However, with the creation of a new democratic body in Wales, the FSB saw the opportunity, as an organisation representing thousands of small businesses, to make its mark in terms of influencing the new devolved government in supporting indigenous Welsh firms.

Certainly, it would have been hard to imagine, prior to the creation of the National Assembly, that the FSB would not only have a seat at the table of every major business and economic development committee in Wales, but that it would have been responsible for important new policies such as the development fund for Wales which eventually became Finance Wales.

The achievements of the FSB in making politicians and civil servants take seriously, for the first time in Wales, the concerns of the small firm sector have been of enormous importance to Welsh business in the last eight years.

On a UK level, Welsh colleagues have worked alongside the excellent policy division of the FSB to ensure government does not get away with ill thought-out legislation and policy-making.

Through intense lobbying from its members, it convinced the Chancellor to change his mind on capital gains tax and, as a result, saved small businesses £200m and its Keep Trade Local campaign, launched at the FSB’s annual conference last month, has become a vital instrument in ensuring the survival of small shops, pubs, and post offices throughout the UK.

It has also persuaded the Scottish Parliament to endorse a massive reduction in business rates for thousands of small businesses and, through its EU office, has made some significant breakthroughs in stopping red tape before laws even got onto the statute books.

Most importantly, all these policy developments have emerged through consultation with FSB members, which are largely micro-businesses employing fewer than 10 people.

While there is an increasing trend among policymakers and academics to sneer at the contribution of this size of business, it must be remembered, according to official statistics, that these firms are the real job creators of the Welsh economy.

For example, a recent Welsh Assembly Government report showed that micro-businesses created 15,000 jobs in the period 2003-2006.

In West Wales and the Valleys, they created more jobs than any other size of firm, bringing wealth and employment to locations where other firms would not venture.

With the FSB calling for greater academic-industry collaboration, there could be greater links between its members and the university sector in Wales, especially as there is general consensus among vice-chancellors, businesspeople and politicians that more needs to be done to ensure greater partnership between academia and industry to improve the prospects of the Welsh economy.

Indeed, there is no reason why higher education cannot collaborate further with micro-businesses across Wales in terms of research and training, especially if the sector wants to take advantage of the hundreds of millions of pounds of Convergence Funds available to encourage university-industry links in our poorest areas.

At a time when universities need to make the most of such opportunities, I am sure they will redouble their efforts to engage with businesses of all sizes over the next few years and ensure they increase their collaboration with the FSB’s members.

That would be an enormous step for the Welsh economy and ensure the wealth of expertise and knowledge within the higher education sector is transferred to the many and not just the few within the Welsh business community.