This month Benedict Dellot of The RSA has, in the report The Second Age of Small – Understanding the economic impact of micro-businesses, produced a provocative and informative clarion call to recognise the sustaining energy and output of the micro-business in the UK.
In his detailed analysis Benedict informs us that the micro-business excels in sectors where relationships are the key to business and operational success. ‘Microbusinesses (excluding sole traders) are 4 percent more productive than the sector-wide average in human health activities, 20 percent in education and 38 percent in social work’.
In a well argued section of the report Benedict looks back at the proto-industrial period, pre-1750, when the notion of industry was tempered by the small, local producer – often the basis of what we might now call the ‘family firm’.
It is the Twentieth Century and The Age of Oil which reconditioned our thinking, the RSA Action and Research Centre argue, to believe that the large corporation is the sole standard bearer for commercial enterprise success. Writing in the 1970’s…
E. F. Schumacher, who, in his book Small is Beautiful,
lamented that his generation suffered from “an almost universal idolatry of gigantism”, and instead called for “production by the masses, rather than mass production”.
The data presented in this RSA Report underscores the importance of the micro-business to the welfare of the UK economy, as well as recognising that the small business is a driver of social welfare in the localities that they operate in. ‘There is also a geographical element to consider. Evidence shows that small firms are more beneficial than large firms for the local economies in which they operate’.
To those of us who work in the social business sector, helping charities and mainstream businesses to actively adopt sustainable business practices linked to social outcome, we clearly recognise the power of this observation.
The Dellot thesis draws nine principal conclusions from the analysis…
1. The UK’s micro business population is booming
2. Many see this as a bad economic omen and a sign of a fragmented labour market
3. But our research finds that micro businesses may help to spur productivity
4. … and innovation
5. … and job creation
6. In any case, the value of micro businesses is not well captured by conventional measures
7. Five key factors help to explain why micro businesses have become more economically viable
8. Rather than be preoccupied with micro businesses we should pay more attention to the activities of oligopolies
9. We can shape our economy – the status quo is not predetermined nor inevitable
Each of them, in the report, is well argued and provides comfort to the small business owner, and should give the nascent micro-business entrepreneur confidence for the future. If you have spent years working for yourself, or have just joined the entrepreneurial drive to create socially minded businesses, then a high level of satisfaction to be gained awaits you.
Micro business employees are the most satisfied workers – Microbusiness employees score highest on most indicators of job satisfaction, including influence over their job, involvement in decision-making and good relations with management.
Detailed, thought provoking and telling in its analysis. We commend the latest Dellot opus to our readers.
View, print or download a copy of this report here…