Whose economy is it? Why we need to empower local business communities

The way to jobs is through innovation.

The way to innovation is through people who have a business and a vision.

The way to those people is through their local business communities.

We in the world of small business operate in small economies right across Australia. With the growth of online business and globalisation some of us also deal with a wider economy, national or international. We will still, however, have our business base, our home and family in a community – in a local small Australian economy.

In the modern world change is a constant. Change management is an essential skill. We know large businesses and centralised decision-makers are not agile enough to respond quickly to change, they are held back by slow and complex process across many levels of management and government. It is the SMEs that cause, manage and/or can take advantage of change including the modern phenomena of digital disruption – change that affects everyone – families, charities, business, education and government.

There is currently a culture of centralised decision-making in Australia that inhibits change management and hinders innovation. Centralised decision-making has its place around certain issues such as interest rates changes, finance regulations and competition management but the impact of centralised decision-making loses momentum when local economies are considered. Indeed a decision made at the national or state level can have a negative or positive impact on communities depending upon a range of factors.

We need to give business communities the capacity to influence their own economies based on what they want and what they value. Local medium and small businesses are best placed to deal with change – good or bad. Local business communities can also create the change they believe they need. If most small economies around Australia are functioning well than the whole economy will be healthy.

We are holding our MicroEconomic Challenge with a view to empower local business communities to influence and improve their economies.

Register your interest in attending the MicroEconomic Challenge on December 9 in Sydney

In Australia there are over 2 million of us who employ nearly 5 million other people.  We sponsor community events, sporting teams and charities. Many of us sit on boards across all aspects of society in these small communities.

We are, of course, the backbone of the economy and a key part of our national culture. Often it is the small business sector made up of the shops and cafes, the restaurants and tourist attractions, the health services, accommodation centres and service providers that makes each community different from each other.

No one has ever driven to another community because the large retailers are so different from the large retailers where they live; big businesses and big malls are the same the world over. Small business makes the world different. Big businesses do not bring retail diversity, only a small business can do that – if allowed. Big businesses cannot quickly change or adapt or create something new; only a small business can do that.

So let’s make sure the small businesses can start up, grow, survive and make our lives more interesting and provide jobs and wealth for the community.

We need a national program of local economic development that empowers business communities to better influence their own economies and through that provide a better more sustainable national economy. This follows a recent national reform summit and other meetings held by Australia’s large business, union and social services leaders to try to end what they saw as the political paralysis that had seized up policy, demoralised the business community and hit consumer confidence.

That is the big picture with big stories and big politics. What can be done at the microeconomic level? What can be done across the nation to boost productivity and create better futures? In the suburbs and towns, in the regions and in virtual communities what can be done? Whatever it is will be based on small and medium business – the SMEs of Australia.

So what are the key issues for SMEs?

Key issues for an economy, small and large, are and always will be about communities. Issues include communications, taxation, innovation, competition, business financing, import and export activity, training and education, business regulations and specific needs of various industry sectors. From that list of issues what is it that underpins the future of the smaller economies that has been ignored or given too little attention?

What is it that doesn’t impact on big business the same way or at all but can have a profound impact on millions of small business people?

Communications and administration

This has to be right for the future of efficiency and of B2B and B2G2B communications. Communication technologies will drive change and the underpinning platforms must be open-source, free and available to all software developers. Telecommunications must be faster and cheaper. Big business have no great concern in this area but it is vital to get this right for innovation and government processes.

Infrastructure

Each small economy will deal with infrastructure in a different way depending upon many factors. Let the locals decide what is best and what they can improve upon or take advantage of; then build the infrastructure they need.

Health

The business community has a direct impact on the health of a community through employment and through specialised health-based businesses such as gyms, pharmacies, doctors, other health providers and aged care facilities. This is about managing physical and mental health issues that can drag an economy down or we can create wealth with health.

Skills and training

The local business communities must have a greater say and influence on vocational education and training activities. Skills are the key to innovation and efficient businesses.  When training agendas are developed and implemented by far away policy-makers then the real needs of the business community and current and potential employees will be missed. This impacts upon efficiency and employability.

Workplace relations 

This area of conflict and confusion is a key to growth – what does it mean for small economies? Workplace relations must be simple to understand and reward effort for the business and the employee.

Business financing from small to medium providers

What are the opportunities and threats at the local level for access to finance? With emerging new ways of financing including peer-to-peer and crowdsourcing affecting the finance sector, what does this mean for medium and small businesses that want to grow?

Taxation

What do business communities want from a tax system? Can they create compliant business communities through less complexity and better information?

Local government

What role for local government? Is it about attitude or just a capacity to provide services? Can the health Inspectors work with businesses rather than just fine them?

Medium business

The biggest employer in many small economies will be one or two medium businesses.  These businesses are often forgotten when it comes to policy and innovation. Who are they and what do they need?

Peter Strong is executive director of the Council of Small Business of Australia.

SmartCompany is the media partner for the COSBOA MicroEconomic Challenge, which will be held in Sydney on December 9. Visit the COSBOA website for more information.