With the USA’s Labor Day weekend over, September brings with it that ‘end of summer, back to school’ feeling years after we’ve left the classroom, and this week UK Ministers sharpen their pencils, dust off their books and get back to business, as the House of Commons returns today, under Prime Minister May. In Hangzhou, China, global leaders gather to work towards ‘an Innovative, Invigorated, Interconnected and Inclusive World Economy’ at the G20. And in the USA, the presidential election hots up, bringing with it the next phase of mudslinging and personality campaigning.
Meanwhile, for entrepreneurs the world over, summer certainly hasn’t brought a break from the relentless demands of building a business– our own research at Sage showed that more than 30% of entrepreneurs regularly don’t take a summer holiday. These heroes, who create two thirds of all jobs, and represent 99% of all businesses, might well be asking what business-focused policies the new political term will bring.
So what are world leaders – from Washington to Westminster to Hangzhou – doing to support these business heroes, who are the key to propelling global economies?
‘I want to be the small business president.’
‘Small and medium sized businesses are the backbone of our country.’
The language we’re hearing is bang on the money. The former are of course the words of US presidential hopeful Hillary Clinton, who has been vocal on her advocacy for over a year now. And the latter is a quote from UK Prime Minister Theresa May, when she welcomed small businesses into No.10 last month to hear how their needs can be met in Brexit negotiations. Choosing small businesses for her first Brexit roundtable over the big brands who dominate headlines is an encouraging sign.
So far, so good. But how do we know this isn’t just lip service? What meaningful commitments are being made to champion entrepreneurs?
Well, two weeks ago, Clinton laid out her plan for small businesses. Her headline promise is to establish a standard tax deduction available to small business, reducing admin barriers to tax relief. She also pledges to create new incentives for state and local governments who take steps to create a fertile environment for start-ups – by streamlining business licensing, for example. And just to prove her door is always metaphorically open, she has guaranteed that small businesses with questions about government regulations will receive an answer within 24 hours. Across the political spectrum, Donald Trump has focussed his efforts on one major flagship pledge – to cut the corporate tax rate from 35% to 15%.
Meanwhile in the UK, at her small business roundtable, Theresa May confirmed that she would not renege on the promise to reform business rates from the last budget, and assured businesses that funding for small business and entrepreneurs lost as a result of a Brexit would be replaced by the UK government.
A promising start, but there’s more to do, particularly when it comes to encouraging technology start-ups that make up so many new businesses.
I’d urge US & UK policymakers and economists to look for examples overseas – no, not in Silicon Valley, but in Bucharest, Romania.
Romania is the second-fastest growing economy in Europe, and Bucharest has bloomed as a start-up scene over the past five years. Several key factors contribute to its success – not least of which its super high internet speeds. Romania’s peak internet speeds are the highest in Europe and 6th highest worldwide, and last year Romanian cities made up an incredible 9 of the top 15 best cities for fast internet on the planet. The Romanian education system also strongly favours STEM subjects like maths and engineering, creating generations of brilliant developers. And in light of the revelation earlier this summer that the UK’s digital skills gap is costing our economy £63 billion a year, this is clearly an area in which the UK could stand to learn a lot. I’d like to see the UK government take action in both of these pivotal areas.
So as the House of Commons returns today, and as world leaders in China continue to discuss how to boost international trade, world leaders must ramp up their commitments to the entrepreneurs that they’ve praised so publicly, and take further steps to show that they’re not just talking the talk. For the US, we would all welcome a shift from the personality contest to tangible policies that land to propel entrepreneurs’ success.