Life is full of problems. Consequently, it’s also full of problem solvers. But how many problem solvers is too much? And how do you know when you’ve reached that critical point? When it comes to the support available for young entrepreneurs, it appears these questions are still waiting to be grappled with.
I’ve just been reading a paper on enterprise support that was put together by the businessman Doug Richards for the former Conservative Shadow Cabinet. The central message to come out of the Richards Report was that the ecosystem of enterprise advice and guidance had ballooned under the Labour government and turned into a sprawling, confusing and not to mention expensive morass. To take a few figures cited in the report, 3,000 small business government support schemes were in operation in the mid 2000s, only 4.4 per cent of FSB survey respondents said they had used government business support, and the total amount spent by the state on such schemes ran to nearly £2.5 billion (at least, this was the case in 2003/4).
Informed in part by the paper’s findings, when the Coalition government finally came to power it took a number of steps to reduce the cost and complexity of the support available to existing and would-be entrepreneurs. Primary among these efforts was to terminate face-to-face Business Link centres across the country and replace these with one central hub for information and advice. In a similar move, the RDAs were shut down and replaced with new LEPs that were designed to be led and run by businesses, not government. In sum, the government moved from a position of offering direct support to the enterprise community to one of creating a more favourable framework that would place others, for instance universities and libraries, as the main providers.
While these changes were arguably necessary, if not popular with everyone, they failed to get to grips with the same issues of duplication and confusion that have been inflicting the support ecosystem of third and private sector providers.
Throughout the recent workshops we held with young entrepreneurs across the country, time and again we heard the same message that the help provided to those who want to start and grow a business is often, somewhat paradoxically, both disjointed and duplicated. For example, young people will find that both their local library and their university will offer a mentorship scheme, while only the library will provide desk space and only the university will provide grant loans. This can be problematic for the young person who is left bewildered by the options available to her/him, and it may also be inefficient and wasteful since different groups are effectively providing the same service.
Choice is of course a good thing. Young entrepreneurs, and all entrepreneurs for that matter, should be able to pick and choose between different services to suit their needs. But as it stands, the support sector doesn’t operate like a free market. Current provision is dictated by funders, not by the demand of young people seeking services. In other words, the choice that young entrepreneurs face in picking services is to an extent fabricated. In theory big funders, whether national banks or philanthropic foundations, should be able to make informed decisions about which support services to assist based on the result of evaluations. Yet as the Richards Report pointed out, not enough support services conduct rigorous assessments of their activities.
So what to do about it? How can we create an ecosystem of young enterprise support that offers choice and high quality services to end users, and which sees organisations working together to minimise duplication and make the journey of enterprise support as seamless as possible?
A few ideas are already floating about in this space, but one particularly attractive option to have cropped up in a few of my conversations with people in the sector is that of a new kitemark accreditation scheme for support services. This could be similar to the new Project Oracle programme in London, whereby youth services in the city are taught how to undertake basic evaluation and are judged against an agreed grading system (running from 1 to 5). The idea is that this would help funders make more informed decisions about where to channel their money, and that it would also provide some indication to young people about the quality of the services they might receive.
It’s early days but it will be interesting to see if this has any legs. In the meantime, I’d be keen to hear of other people’s ideas.