SMALL and medium sized businesses are the lifeblood of the UK modern economy. Every village, every town and city contain shops, garages, cafes, and manufacturing firms run by enterprising and hardworking people. They are a vital part of the economy and that is why the government is backing small businesses.
In the UK, 99.9% of the businesses are categorized under the small and medium sized enterprises (SMEs) and they employ 12.1 million people, or almost 60% of the UK private sector workforce. They contribute slightly more than the MNEs in UK’s national GDP, and generates just under half of all private sector turnover of over £1.2 trillion to the overall UK economy.
The UK government realizes this and took adequate measures to back the creation of new businesses in the economy by means of making it easier for businesses to start, grow, and succeed. Under PM David Cameron, Department for Business, Innovation & Skills were massively successful at it that the UK saw the creation of 760,000 businesses and the creation of more jobs in the UK in the past five years than the entire European Union combined.
The UK government’s motto is: “We want to make the UK the best place to start and grow a business.” Here are seven policies implemented by the UK government to strive to make the UK the best place to start and grow a business, ones which could be replicated in Brunei in driving up its entrepreneurship scenery:
1. The Government boosted the number of Apprenticeships (or Internships) to two million of its citizens since 2010, and has driven up the quality of training every apprentice receives, effectively building up the country’s human capital and labor productivity base. To motivate the private sectors to hire and train apprentices, the government offers grants of up to £1,500 to companies as incentives. The best practices which can be replicated in Brunei is to increase the level of internship capacity in local companies, as well as to revise and to monitor job training quality.
2. The Government has issued over 12,600 Connection Vouchers to SMEs across twenty-two cities, enabling faster broadband connectivity for small businesses. Which means businesses do not have to worry about slow internet speeds which could hamper productivity and increase operational costs. With the issuance of these vouchers, it would make it easier for businesses to make the most of the opportunity to sell their products online to customers easily.
3. The Government has opened up and reformed the public sector’s £230 billion contracts into making it more transparent, easier, cheaper, quicker, and fairer for private companies to bid in. Further, the Contracts Finder, an online system, enables SMEs to find and bid for public sector contracts in their sector and in their locality via online.
4. It has established the British Business Bank through a Private-Public Initiative (PPI), partly funded by the tax-payers money, where it expends Startup-Loans to new time entrepreneurs. It makes it easier for them to raise and gain access to relatively cheap financing. James Cann, a former judge in UK’s TV show Dragon’s Den, holds an executive position overlooking the Start-up Loans programme. Since its inception, the bank has offered Start-up loans of upwards of £146 million to over 28,000 upstart entrepreneurs.
5. In addition, the British Business Bank currently supports £1.8 billion of general business finance to over 40,000 small businesses, with a further £1.4 billion of finance to mid-cap businesses. This lead to a private sector growth rate increase of 40% over the lifetime of the last parliament (2010), or less than five years ago.
6. Introduced and implemented the Red Tape Challenge, a governmental challenge to review UK’s 6000 existing business rules, and effectively removing or improving over 2000 of them, so they work for, not against business. This reform has saved the private sector over £10 billion over the lifetime of the last parliament.
7. Since 2010, UKTI has increased export-led businesses by 45%, from 27,000 businesses in 2009/2010 to almost 48,000 in 2013/2014. These businesses has created or safeguarded 220,440 additional jobs, and has contributed to excess of £49.1bn in the UK GDP. It also helped thousands of UK businesses to break into new markets, with local support from UKTI’s international trade advisor.