Social versus economic policy

The UK Government strongly encourages existing SMEs and start-ups. As already mentioned above the aim is to built an environment in the UK which is to be the leading area worldwide in setting up and running a successful business. The Government also enhances workers' rights. EU Directives are enacted by the Parliament and then become domestic law. Employment regulations and family friendly policies have been implemented, for example: minimum wage, maximum working week, part-timers' benefits, parental leave and stakeholder pensions.

All of the workers' laws add to the costs of SMEs. There is a danger that these laws discourage business and make the business environment less competitive. The load of "Red Tape"11 is not proportional for SMEs in comparison to larger firms. The administration of the duties of the welfare state can be very time consuming for SMEs. In my opinion it is the Governments obligation to improve this situation. It should enforce rules and regulations which balance the improvement of the quality of working life and the support for businesses in a competitive environment.

The combination of social and economic policy is important to ensure and grow a healthy economy in the UK. It doesn't necessarily mean that rules aiming on one side exclude the other but on a long-term basis that could be the case and has to be taken into account Policies which bring these 2 aspects together could be based on a stronger link between the EU and local SMEs through the national and local Government. The outcome could be that SMEs are able to save cost and have more time for actual business. Encouraging a stronger identification of workers with the business can help to raise the ability to grow.

A strong identification with the company means that a worker knows more about the company, feels integrated and wants to work towards to growth of the company. The Government could encourage business-owners and managers to be aware of these facts and to help them integrating it into their businesses. Building an Enterprise Culture Under section 1 of the core strategies, the offer of sources to schools in order to make pupils aware of an entrepreneurial environment has been mentioned. I think that it is important to move away from only supporting learning provisions but include the funding of the actual value of the learning provision.

This means that supplying sources is not enough. The results of the learning process should also be recognized. Teachers need to be equipped with appropriate knowledge and understanding of entrepreneurship to be able to pass it on to their students. A possible outcome is probably not immediate. However the interest for entrepreneurship can be encouraged and a possible realisation of a business idea could be seen in a later stage of a person's carrier. Encouraging a start-up market To encourage a vital start-up market the Government has already taken a lot of action.

As mentioned above, publications give a first insight of how to start a business and what the necessary steps towards a success are. These publications need to be flexible and able to adapt to different regions. On the top of that they should enable ease of updating because changes e. g. in the economy could lead to new regulations and policies. The main focus of the Government lies in the quantity of start-ups, however the emphasis on achieving high quality start-ups is not given. Strategies towards a higher quality would create stronger businesses from the start-point.

Failures because of lack of knowledge could be avoided. From the beginning on policies should also be focused on long-term strength of a business and the recognition of the possibility of failure. Characteristics of successful long-term performing SMEs should be known by the Government in order to create appropriate regulations for future enterprises. Building the capability for small business growth To built the capability for small business success and growth it will be crucial that the Government takes a sensible course of action to encourage business start-ups.

Policies towards prosperous growth need to be carefully thought of and appropriately implemented. Agreements about the policies throughout the Government departments and their agencies should be made in order to avoid conflicts. In my opinion a good information flow system throughout the Government, its departments and agencies is crucial. Internal governmental conflict could lead to a damaging impact on businesses that need support. Developing better regulation and policy Very often the Government wants to improve situations where regulations were already made.

In some cases, for example, when a whole new area of regulations take place it is hard to exactly distinguish in advance what negative outcomes could be. Nevertheless improvements should be considered in advance to the enforcement of regulations. A closer contact between the Government and business management needs to be enforced The Role of SBS SBS should have a more active role. A stronger influence in the discussions which already take place would help to clarify the Government's policies and regulations. A more active role could strengthen the knowledge about the role of the Government.

On the other side the feedback from business owners or managers could be received on the same base of knowledge. Proposals for changes in Government regulations and policies could be easier developed. It is the SBS's role to listen to those ideas and inform the Government. However only having discussions doesn't result in any action. SBS should therefore try to not only discuss but also find ways to transform the debates into direct action. Conclusion Government policies towards SMEs are always a viable area. The Government needs to ensure that it is kept up to date with the latest changes in the business world.

Knowing the sector and positively influencing it makes the Government an important source for SMEs. At the level of the national Government regional, national und international areas of interest should come together. This makes the Government an important knowledge base on which it can build regulations and policies.


Marsden, K. (2003) Gorden Brown and British Competitiveness A statistical Analysis Centre for Policy Studies Stokes, D. (2002) Small Business Management, London, Continuum www. businesslink. gov. uk (10. 12. 03)