4 days ago
- Business
- Business News Wales
How's the Water? Making a Better Business Environment for Wales
A favourable business environment is key to economic success.
All businesses – but particularly smaller businesses – depend upon local skills provision, on good infrastructure, on support and advice, and on a regulation system that is not too complex.
Often, one business owner has to deal with everything from employment law and health and safety, to business strategy and stock to marketing and so on. Less time means fewer opportunities taken.
Of course, there are plenty of examples of high-flying and high-profile entrepreneurs whose image suggests that their success is entirely their own doing.
But one academic compares entrepreneurs in Silicon Valley who attribute success to themselves alone as like a fish being told it is thriving because of water – to which the fish replies: 'What is water?'.
The environment around a successful business contributes in huge part to making it thrive – and can indeed be taken for granted. This is a mistake which can all too often be made by policy makers, where the need to 'tend' the environment is often unappreciated.
And yet government needs business success in order to achieve its wider policy goals. The economy is the foundation of success not just in terms of prosperity, but also in terms of building the base for social and environmental policy success.
This is a central idea in recent work on economic success which looks at 'entrepreneurial ecosystems'. This approach argues that entrepreneurship can be taught, and it can be cultivated with an environment conducive to supporting businesses and to lowering barriers to business success.
Ecologies differ from each other and rely on different sources of strength. What works in Silicon Valley can't just be transplanted to the Welsh Valleys. Nevertheless, nothing is set in stone – and we can proactively look to make an environment that supports our businesses toward future success, even if that has been difficult in the past.
How we use Welsh strengths to create that supportive environment is what FSB Cymru's recent report 'Cultivating Small Business Growth' seeks to address. We
conducted a survey of SMEs and a series of interviews with businesses as well as with business support providers to gather evidence on what works.
Firstly, it is important to note that the core of our business support system – Business Wales and Development Bank of Wales – is a well-recognised brand. This may seem mundane but, given that in Wales we often find confusion about where powers lie relative to UK Government, this is in fact a real advantage. It's also one to capitalise upon in developing a clear one-stop-shop for SMEs in Wales. While imperfect, if we did not already have these organisations we would need to create something like them.
Our survey and interviews suggest that businesses are broadly positive about Business Wales, with our survey noting that 58% have a positive experience versus 22% having a negative experience. That can and should be improved however, and we did find a lot of businesses finding the system unwieldy and too slow in addressing their immediate needs.
Business support organisations can improve the experience of services by increasing face-to-face engagement, setting targets for how quickly queries receive a response and implementing a 'case officer' approach with a named point of contact.
With the UK Government now looking to implement its Industrial Strategy and its upcoming Small Business Strategy, as well as its new iteration of Shared Prosperity Funding next year, it's important that we use what already works, and target increased funding as investment in small business growth.
This will need: A properly resourced system: The Welsh Government should restore funding levels for business support in Wales in real terms to those in place before the UK left the EU, and commit to multi-year budgets.
The Welsh Government should restore funding levels for business support in Wales in real terms to those in place before the UK left the EU, and commit to multi-year budgets. Strengthening accountability: The Welsh Government should establish a Business Growth Board to bring together business support stakeholders, including SMEs themselves using the service, to assess delivery and ensure it is responsive.
The Welsh Government should establish a Business Growth Board to bring together business support stakeholders, including SMEs themselves using the service, to assess delivery and ensure it is responsive. Specialised and intensive support: to SMEs with a clear ambition and potential to scale up their business. The Welsh Government should also work with Business Wales to develop a voucher system that enables small businesses to access specialist expertise via the private sector.
to SMEs with a clear ambition and potential to scale up their business. The Welsh Government should also work with Business Wales to develop a voucher system that enables small businesses to access specialist expertise via the private sector. Use what already works: UK Government should recognise the strength of Business Wales' brand and know-how in the delivery of the Small Business Strategy and Industrial Strategy. Any new UK-level 'Business Growth Service' must not duplicate, displace or dilute the Business Wales work in Wales.
UK Government should recognise the strength of Business Wales' brand and know-how in the delivery of the Small Business Strategy and Industrial Strategy. Any new UK-level 'Business Growth Service' must not duplicate, displace or dilute the Business Wales work in Wales. Boost Innovation: Wales currently gets only 2.3% of R&D funding. The UK Government should implement a strategy to ensure Wales' proportion of R&D funding at least reflects its population share.
I started by noting the entrepreneur as a fish being unaware of its environment, asking 'what is water'.
In short, we must collectively acknowledge the importance of the business environment in cultivating business success in Wales, and we must act collaboratively to improve it. Then we will be able to ask our SMEs: 'How's the water in Wales?' and be confident that their reply will be: 'Well, the water's very nice, actually.'
