4 things government can do to help small business
So much for the v-shaped recovery. Australia is set to record its biggest quarterly fall in GDP in history this week. The federal government will extend its JobKeeper wage subsidy program by six months. About 1.75 million workers, including about 1 million Victorians, are expected to rely on it till March. But there’s more to be done, particularly to help the small and medium-sized businesses taking the brunt of the COVID-19 economic impacts. Small and medium enterprises employ about two-thirds of the workforce. They are crucial to the prosperity of local communities. A full third are pessimistic about making it through the next three months, according to the Australian Bureau of Statistics’ most recent survey of COVID-19 business impacts. By comparison only 18% of large companies (those employing more than 200 employees) expect difficulties in meeting their financial obligations. Even at the best of times many small businesses struggle. Yet our research on 223 Australian business owners highlights failure (or success) isn’t just the result of individual entrepreneurs’ personal resources and capabilities. The local business environment plays a significant role. As Malcolm Gladwell puts it in his book Outliers: The Story of Success: The tallest oak in the forest is the tallest not just because it grew from the hardiest acorn, it is the tallest also because no other trees blocked its sunlight, the soil around it was deep and rich, no rabbit chewed through its bark as a sapling, and no lumberjack cut it down before it matured. The same is true for businesses. Even the most resourceful business owners struggle to get ahead when the environment stifles their efforts. This is a thorny problem for governments as they turn from emergency measures to chart longer-term recovery policies. There will, no doubt, be much debate over the usual areas – of subsidies and grants, tax breaks, red tape […]