Scot-Buzz has reported almost every week on the surging growth of small firms. It’s been a signal change in the nature of employment and in the composition of the economy. But how big? And are there still barriers to enterprise?
Back in 1971 a sonorous government commission – the Bolton Report – lamented that the small firms sector was in terminal decline and doomed to extinction. The number of small businesses totalled just 750,000.
Today that figure now stands at well over five million. As Lord Young (pictured), the Prime Minister’s advisor on enterprise notes, small firms are leading the way in reshaping the world of work, with more than 19 out of 20 firms employing fewer than 10 people.
“It really has become a small firms’ world”, he says. “Of course, large firms are important; they still employ about a third of the workforce. But, increasingly, technology is enabling them to do more with fewer people. What technology has really done is to make it easier than it has ever been to start working for yourself.”
And several barriers to the growth of small firms have been removed, with greater opportunity to win government contracts.
Pre-qualification questionnaires – sometimes up to 40 pages long and seeking all sorts of irrelevant information – have been abolished. “Large companies”, says Young, “can deal with these as a matter of course, but small company directors throw up their hands in horror at them.”
It’s been a constant complaint in Scotland that the procurement process for outsourcing work has been heavily skewered towards larger firms.
And it’s not just the tedious questions about staff ethnic origin and male/female composition that are the problem. Firms can be eliminated for not having the lengthy track record of larger firms or not having a renewable energy or sustainability policy or being unfamiliar with public sector protocols.
And such complaints have persisted…
Lord Young says the UK government “will be making the whole procurement process transparent and open and will shortly announce further steps to enable small firms to compete for public sector contacts on a more equal basis.
“From what we have seen already in our work for central government, this will result in substantial improvements in innovation and even cost savings.”
Let’s hope this is also followed through in Scotland.
He adds that the UK is going to offer “all head teachers an enterprise adviser to bring speakers into schools to motivate young people early in their school career and introduce an enterprise passport to broaden their activities through the school years… Young people in school today will face a world in which more and more people work for themselves, work in small groups and sometimes for more than one company and change occupations from time to time.”
Now “teaching enterprise” is a tall order. Many would argue that it is impossible to be taught. And it may not go down too well with many teachers in Scotland who feel they have enough on their plate to get on with, setting aside a prevalent disdain for anything associated with the world of business and enterprise.
And few teachers have any first-hand experience of the world of work outside of education, still less with small firms.
But there’s no avoiding the fact that the world of work is changing. And any school careers adviser will be well aware that job opportunities today are increasingly to be found in the small firms sector.