Paul Wallbank – Brilliant Communications

Category: government

  • Does small business need government support?

    Does small business need government support?

    The New South Wales State Government’s decision to axe their long standing small business programs raises the question of whether small businesses need government support at all.

    Last week’s announcement the NSW Government are abandoning their business education programs and replacing them with a previously announced network of local business advisors shows where small business lies in the state’s list of priorities.

    Taken at face value, the changes appear to be moving back to the face-to-face business advice model of a decade or so ago that was common before the winding back of small business programs and local enterprise centres by then Federal Liberal and state Labor governments under John Howard and Bob Carr.

    On closer examination, it’s a cut to business support and an effective withdrawal of NSW government assistance to small business. The remaining services will be outsourced to the same local business centres that have been starved of funds for over a decade.

    A concern with the individual advisors will be how many businesses they can reach, according to the NSW Trade & Investment annual report 2010-11 the axed events had an audience numbering over 5,000. It’s difficult to see how the advisor network will match that and makes one wonder how the more important events couldn’t have been streamed or podcast across the Internet.

    Putting aside the pros and cons of this restructure, the bigger question is should small business expect any government support at all?

    The record of Australian government support for industry is not good. We only have to look at repeated visits to the trough by what remains of the Australian car making industry, the bipartisan debacle of assistance to the renewal energy sector or the support given by the Keating Labor government to Kodak to see how well schemes have worked out.

    Most of Australia’s economic success stories have happened despite, not because of, government’s pouring money into industries. For example, the first five years of the current mining boom was completely missed by the political classes along with the Canberra press gallery and the media economic commentators.

    This is where small business steps in – rather than relying on access to the ministerial suite to protect their industries, the little guys and the startups compete on price, service and innovation. Aspects that organisations in protected industries or those dependent on taxpayer largess struggle with.

    Indeed many small business owners and entrepreneurs struck out on their own because they felt stifled by bureaucracy. So offering them programs wrapped up in paperwork is counter intuitive.

    Where the government can help is with keeping busy business owners up to date with new developments in business, markets and technology which was exactly what the events programs like Small Business September and Micro Business Week did.

    It’s difficult to see how the individual business advisors employed by local Business Enterprise Centres will keep up with their clients up with changes regardless of how skilled or well intentioned they are.

    All of the changes are justified by the report from the Small Business Commissioner’s listening tour. Apparently she was told businesses didn’t want events like Small Business Septtember

    I certainly didn’t hear any complaints at the breakfast fourm I attended at the Northern Beaches, most of the concerns seemed to be from cafe owners arguing about council outdoor seating permits. If the commish wants to get involved with that nest of vipers, I wish her the best of luck.

    Overall, small business can’t expect much from government; particularly in the modern corporatist society where Big Government does Big Deal with Big Unions and Big Business while Big Media selectively reports what suits it.

    Probably the best thing for small business is stay nimble and avoid being stepped on the Big Dinosaurs as they dance obliviously to the major changes that are happening in the world around us.

    Big dinosaurs look after their own, don’t expect them to give you anything except a big shower of dung.

    Disclaimer: I’ve been hired by Trade & Investment to host various events on the now axed programs and worked for 19 months at what was then the Department of State and Regional Development. I wish all of those former colleagues who now find their positions abolished the best of luck in finding another role.

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  • When tails wag dogs

    When tails wag dogs

    A recent Business Insider examination of how patent “aggregator” Intellectual Ventures works is a good example of one of the problems in modern business – essential ancillary processes have overtaken doing business itself.

    Intellectual property rights are an important part of doing business, however what should be an adjunct to doing business has consumed many enterprises.

    As the Business Insider article point out, Intellectual Ventures has become some sort of modern day privateer, extracting loot from hapless companies that cross its path.

    This problem with intellectual property is part of a larger problem with lawyers, where they have been given too important a role in business.

    In any civilised society lawyers are essential and carry out an important role but in western society over the last fifty the scope of the legal system has expanded so dramatically that now the legal tail wags the business dog.

    Today company directors, business owners and entrepreneurs live under the shadow of breaching some obscure law that they had no inkling existed. Of course, the lawyers can help with this.

    A similar thing has happened in the financial world, accountants have also moved from being an essential adjunct of business into being at the centre of most enterprises.

    Much of this explosion in lawyering and accounting has been due to the increased role of government in our lives; each time a new law or regulation is enacted it makes it harder for the average person, or business owner,  to understand the system.

    A cynic can argue this is by design but most government actions are intended to address some injustice or flaw in society. The problem is there are always unintended consequences.

    One can also argue that the increased growth in business overheads like lawyers, accountants and patent attorneys is because of fat, prosperous business conditions.

    So maybe what western business has seen in the last fifty years has been because of a favorable market place; politicians have introduced a morass of often contradictory financial and legal rules because they know business, and society, can afford it.

    Now times have changed and both business and society can’t afford unnecessary overheads it will be interesting to see exactly how our laws and regulations evolve to respond.

    Maybe they won’t and we’ll see a black economy develop where whole groups of society ignore the rules, dispense with lawyers and accountants and hope for the best. This would not be good.

    Possibly we’ll see legislatures and courts winding back and reigning in some of the more silly and egregious excesses as they recognise society can’t carry the burden and remain productive.

    Whatever happens we can be sure the lawyers, accountants and people like Intellectual Ventures will fight hard against any change that reduces their status and income.

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  • Irrelevance and the media

    Irrelevance and the media

    It’s a shame we weren’t around when dinosaurs became extinct. Then again, maybe we are.

    News Limited business commentator Terry McCrann writes about the “Bleakest of views from the shopfronts” in his Sunday column describing the problems of retail.

    All of the problems Terry cited are from big retailers – Woolworths, Dick Smith, Harvey Norman and JB HiFi. To make it clear he was talking about corporate issues there’s even a reference to General Motors.

    Nowhere does Terry talk about smaller businesses or those challenging the big guys, folk like Ruslan Kogan or the Catch of the Day team. It’s all about the big end of town.

    Terry’s article illustrates the problem of relying on incumbent mainstream media commentary; that it is Big Media talking about Big Business and Big Government.

    “Small”, “ordinary” or “average” has no place in their conversation, if you can call the pronouncement of mainstream media commentators a conversation at all.

    We can understand this – for a journalist, it’s good for the ego and career to look like a “heavy hitter” in big business. For the politician, small business and community groups can’t pay the speaking and consulting fees paid by corporations to supplement their meagre retirement benefits.

    Increasingly what happens in the corporate board rooms or the once smoke filled rooms of political caucuses is out of touch with the real world.

    This has become particularly acute since the responses to the 2008 crash proved to the management classes that their bonuses and perks will be protected by government bailouts regardless of how many billions of shareholder wealth they manage to destroy.

    In the United States we see this in political controversies being focused on contraception – an issue settled forty years ago – while the country faces fundamental challenges to its economic base and the basic welfare of its citizens and industries.

    While in Australia the media ‘insiders’ rabbit on about pointless internal party politics and soothing articles on how everything else is fine, we just need to be more optimistic. Yet the real questions about how we take advantage of the country’s greatest export boom, position the economy for the next 50 years and the nation’s dependence on the Chinese economy are being ignored.

    Terry McCrann’s story is emblematic of just how out of touch Big Media, and their friends in Big Business and Big Government, are with the real world.

    All we can do is let them get on with it and not take them too seriously.

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  • Software’s mini revolutions

    Software’s mini revolutions

    The CIA’s ‘revolutionary’ announcement of their changes to the way they buy software shows just how the relationship between software vendors and businesses is evolving as cloud computing methods become widely adopted.

    For businesses it means more flexibility and efficiency while for software companies the new marketplace is requiring them to be more flexible and responsive. Those changes will challenge some vendors.

    What’s driving these changes is ‘big data’ – the explosion of data being collected and stored – and the move to cloud based computer systems.

    The CIA, like most businesses or home computer users, used to buy software by the license. For small businesses and homes this was by buying a box of disks from the local computer shop while for big organisations there were volume licenses where they bought the right to use tens of thousands of copies of the one program.

    Box licensing was never satisfactory, it was difficult for users to know what exactly they bought and customers were always a year or more behind the trend.

    Keeping up with Technology

    One of the big pluses with cloud based systems is you don’t have to wait a year or two for a new release incorporating the latest technology. It’s rolled out as it becomes available without any work by the user.

    With the old box software model you had to wait for the latest release and even then the features you were waiting for could still be missing.

    As technology is moving fast online, organisations like the CIA can’t afford to wait.

    Pay as you go

    Another problem with the old software model was that big and small organisations found they were buying things they didn’t need.

    This is particularly true with licensing agreements where a company might have 100,000 licenses when they only needed 15,000.

    Pay as you go billing, which is the standard model for cloud computing services, means a lot more flexibility and a much more efficient way of managing software spend.

    Closer relationships

    In his speech describing the changes, the CIA’s top technology officer Ira Hunt said the agency is prepared to give vendors a “peek under the covers”.

    This sort of closer relationship between suppliers and customers is one of the biggest attractions of the cloud computing model. It means both users and suppliers are more closely aligned.

    For software vendors that close alignment is where the opportunities lie; the old days of flogging fat, expensive licenses are over and the successful sellers of computer programs will be quicker and nimbler.

    The CIA has been accused of formenting many revolutions around the world, this is one most business owners should be happy about them leading.

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  • Is the problem in the cockpit?

    Is the problem in the cockpit?

    In the Daily Reckoning newsletter editor Callum Newman uses Malcolm Gladwell’s description of power relationships to draw a parallel between Korean pilots crashing planes into mountains and the economy, pointing out our politicians are like distracted, doomed aviators ignoring the obvious features they about to collide with.

    Is that fair though? In a plane the passengers are strapped in their seats and have to take their the pilots in trust, in real life we have control — all of our actions affect the vehicle that is our economy.

    Unlike a plane we can jump out and do our own thing, we can refuse to buy one good or service and we can set up a business for ourselves when we see a market that isn’t being serviced.

    Where the analogy does work though is our politicians – and many business leaders – aren’t paying attention to major demographic and economic shifts.

    The question is “why?” Most of these people aren’t stupid and they have access to better information than most of us, which is one of the reasons they are in power.

    Perhaps it’s because we don’t want to hear the truth; that our assumptions about what the state will provide and how our economy is developing are flawed.

    In many ways, particularly in a modern Western democracy, our politician are mirrors of ourselves. They tell is what they think we’d like to hear.

    The problem isn’t in the cockpit, it’s back at the boarding gate where we’re more worried whether we’ll get a packet of nuts than whether we should agree to embark on a rough journey to a destination we don’t expect.

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