Beware a singular mindset

To someone with a hammer, everything looks like a nail.’ (Observation often attributed to Mark Twain)

‘Great Idea. Let’s make it a business.’ (Headline on a Go Succeed banner)

Generally the aim of a government’s economic policy is to improve the economy for which that government is responsible – not least because a better economy can usually pay more taxes and generate more jobs. Therefore those responsible for making and implementing economic policy are looking for ways to grow the economy – so it should not be surprising if they develop a mindset which sees things in that context, writes Prof Simon Bridge

In effect their view of the relevant world focusses on the routes which they think should lead to economic growth and jobs – such as the enterprise start-up journey, the business growth path and the inward investment (FDI) highway.

Consequently do those people tend to view anything related to business as a vehicle travelling along one of those routes? Therefore, if they encounter an enterprising idea, do they think of it as a prospective start-up and, if it is already established as a business, is the assumption that it must then want to grow or, as it is sometimes expressed, to ‘scale’? But does the use of the word ‘scale’ in that context imply a preference for the apparently simple rather than the realistic – because a big business is not a scaled-up version of a small business? As Edith Penrose pointed out over 60 years ago, businesses change form as they get bigger and small businesses are likely to be as different from big businesses as caterpillars are from butterflies.

Nevertheless is this a realistic picture of the official mindset? If an apparently marketable idea isn’t yet a business, is it assumed to be a prospective start-up? If it is already up and running, could it grow? And if it isn’t local, could it lead to inward investment? Are aspects of enterprise such as ideas, innovation, R&D and marketing assumed to be natural partners which are focused on business foundation and growth with a consequent economic benefit?

But actually economic improvement is sought in the expectation that it will deliver better lives for people – not an expectation that people should live their lives in order to deliver economic improvement. Instead of being viewed as an end in itself, having a business should be seen as just one of the possible routes to life goals. But appreciating that requires a different mindset: a people perspective not an economy focus.

How can people obtain the things they might need for life? Few are going to inherit or otherwise be granted enough money not to have to work – so what will they do to find the resources they need? What do they see as the available options – employment, self-employment, freelance work, or just a hope for unemployment benefit? But is money all they need or want – what about independence, job satisfaction, making a contribution, achievement, or just practicing a favoured art, craft or trade? Starting your own business is one way but not the only one.

So would it help if policy developers could change their mindset to one focussed more on people? For example, with an economic development mindset, the Go For It programme paid the advisers to whom applicants were directed, not for the relevant assistance they provided, but for the number of business plans they generated, whether those plans were actually helpful or not.

Should we, instead, try to help people succeed and prosper in life? And could that actually be a more effective, albeit oblique, route to economic development – and more likely to work than direct attempts based of misguided assumptions? Should the aim be to help people, not just to grow business, but to succeed and prosper whatever (legal) route is best for them?

Edith Penrose, The Growth of the Firm, (Oxford: Oxford University Press, 1959)

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