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Promote diversity, inclusion and prosperity for all

Recognising the Contribution of Small Business to Communities

Recognising the Contribution of Small Business to Communities

Small businesses and the self-employed are the heart of their communities, through their volunteering activities, support for local schools and colleges, and their willingness and ability to employ those furthest from the labour market.

Despite being under significant resource constraints, small firms are remarkably generous in contributing their time towards improving their communities. Thus, it is important we provide them with the regulatory, economic, and physical space and support to thrive.

It should not underestimate the important role smaller businesses play in their rural areas and local towns. Small businesses are agents of social change. They provide jobs, skills and training for those furthest from the labour market, including young people and older workers, those with disabilities and mental health conditions, and those with low levels of educational attainment. Therefore, it is vital that the invaluable role that smaller businesses play in supporting social mobility, wellbeing and fuller working lives is recognised, rewarded and capitalised on.

For some groups that traditionally struggle in the labour market, self-employment offers a chance to fulfil their potential, either as a self-employed individual or as a route into employment. We should not underestimate the power of inspiration and role models and we need a business support system that capitalises upon this.

Therefore, the EU and its Member States should look to understand the ways in which smaller businesses work to support these groups and design regulation in a way that encourages, and does not hinder, this behaviour.

It is not only the right thing to do, but it also makes economic sense. After all, boosting productivity is as much about diversity, flexible working, job design, employee engagement, and promoting wellbeing, as it is about infrastructure and digital technologies.

FSB suggests:

  • Deepening understanding of the social impact of smaller businesses in their communities.
  • Examining policy interventions to support small businesses to make real inroads into reducing the disability employment gap.
  • Encouraging Member States to provide support and incentives for small firms to recruit individuals from disadvantaged groups, such as ex-offenders and older workers.
  • Supporting smaller firms to deliver work experience, apprenticeships and work placements, as they are key to promoting social mobility.

Promoting Women in Enterprise

Promoting Women In Entreprise

There are many reasons why women decide to start their own business. FSB’s research show that the most common reason was that they had experience of the sector (40%).1 Whereas, other popular reasons include confidence in their skills in their chosen sector or industry (37%), believed the work is interesting (29%), and a gap in the market (26%).2 The desire to achieve a good work-life balance was cited by a quarter (25%), with flexibility and the opportunity to be more involved in childcare and family life an attractive proposition to many women.3

However, women continue to encounter barriers that prevent them from moving into business ownership and impede their ability to grow their businesses. Many of the barriers they face are common challenges faced by all small business owners, but some are specific to women in enterprise.

Recent research has found that currently 2.7 million women in the UK want to start a business but have been put off by persistent barriers: lack of business support, issues relating to self-confidence and perception of own skills and capabilities, having the right skills and understanding the need to continue developing and updating expertise, and past experiences with discrimination.

One of the most common barriers cited by FSB women entrepreneurs is the ability to access finance, with a quarter of all women business owners highlighting the issue as a key challenge. While affects business owners of all genders, women entrepreneurs experience particular challenges relating to a lack of confidence, fear of debt, and risk aversion. Indeed, women-led small businesses are less likely than their male-led counterparts to be using any form of external finance, including loans, overdrafts and credit cards.4

Research suggests that 900,000 more businesses would be created if the UK achieved the same level of female entrepreneurship as in the US, resulting in an additional £23 billion gross value added to the UK economy. The benefits of unlocking this potential are clear.

Across Europe more widely, small firms already make a huge contribution to the EU economy; if we were to harness the still largely untapped potential of women entrepreneurship, it could lead to additional jobs, economic growth and a more diverse and representative small business community across the EU.

1. FSB report, ‘Women in Enterprise: The Untapped Potential’, 2016, available here.

2, 3 & 4. Ibid.

FSB suggests:

  • Developing an EU level framework for women’s enterprise – the EU could bring together all EU Member States, relevant industries, and agencies in an effort to grow and support women’s enterprise.
  • Improving access to finance - women need to be aware of the full range of finance options available to them, including alternative sources such as crowdfunding and angel investors. The EU could consider an awareness-raising campaign aimed at helping to inform women of their financing options.
  • Improving diversity in procurement practices via better monitoring of the awarding of EU public contracts, analysing the gender diversity of the owners, leaders, and employees of firms in supply chains.

Revitalizing the High Street

Revitalising the High Street

The traditional high street is undergoing significant changes and it is impossible to ignore the impact on our communities. From well-known chains and department stores going into administration to shuttered stores cluttering the once vibrant high streets of cities and towns across Europe, none of us is immune or can ignore its effects.

Small shops are in the thick of this. In the UK, there are twice as many independent high street businesses as chain stores. They are vital to the health of our town centres. However, many are finding it difficult – some too difficult – to stay in business.

The problems are there to see. Shops lie empty, increasingly expensive parking in towns drive shoppers to choose retail parks, business rate bills weigh disproportionately heavily on high street retailers, while online-only operators have far lower costs – and pay far less in tax.

Whilst there is no quick fix for the high street, policymakers must act to lessen the pressure on small firms and to enable our towns to reimagine and repurpose themselves for a future that is less about shopping and is more and more about leisure, experiences, and community. Moreover, more can be done to help retailers and their staff develop and apply new skills for a digital future to ensure small businesses flourish.

These challenges will require the EU, Member States, local authorities, businesses, and consumers to work together to solve them. Even in these difficult times, the small business community is opening tens of thousands of shops every year, on high streets and online. If we can reduce the burdens on business and provide opportunities, by policymakers coming together, then small businesses can help to ensure that our high streets are not only able to survive but to thrive.

FSB Suggests:

  • Conducting a thorough impact assessment of all future legislation to ensure that it does not discriminate against high street retailers versus their online competitors and ensures sales channel neutrality.
  • Future proofing all digital payments regulation, to ensure that small businesses have easy and low-cost access to the latest developments in payment technology.
  • Vigorously pursuing action at the OECD level regarding the creation of a level playing field between market-dominant online firms and small offline and online businesses in the field of taxation.