Post on 08-Aug-2015
situating small business regulation
Simon Down, Jane Pollard, Paul Richter
sample includes high-growth firms
Sector Firm Approx size Year founded Location
Bio-Business Bio 1 (bio-tech software development) 30 1989 North East
Bio 2 (drug manufacture) 50 2008
Bio 3 (drug delivery technologies) 15 2002 East Mids
Bio 4 (drug development) 52 2007
Environmental Services
ES 1 (waste treatment ) 20 2002 North East
ES 2 (environmental testing service) 40 1999
ES 3 (pollution control ) 10 1995
ES 4 (sustainable energy) 20 2007 East Mids
Security S1 (vision technology) 32 1992 North East
S2 (imaging technologies) 40 2003
S3 (clothing/armour protection) 40 1989 East Mids
Film & Media FM 1 (digital communications) 10 2000 North East
FM2 (design agency) 7 1990 East Mids
FM3 (TV facilities company) 7 1998
burden – employment regulations
• redundancy regulations • force employers to act duplicitously – “I did it as
gently as I could but the legal side of it made me act completely out of character...it made me look really ruthless” (MD - digital communications)
• create distress – “it was the hardest thing I've ever had to do” (scientist/HR manager - drug delivery technologies)
• maternity regulations• assume the worst of employers – “built on a
premise that all employers are bastards” (drug development)
• leave firms short-handed• compensation culture fuels abuse
• dismissal, recruitment...
• issues apply across the sample
• do policymakers have to experience the visceral and emotive nature of complying? Or do small firms need to be included more in decision-making (e.g. FSB’s suggestion for Regulatory Policy Committee Plus)?
‘We want to create a new relationship
between regulators and businesses
where the default setting is trust rather
than distrust’
(BIS, 2011)
if you believe that small firms are consumed by dealing with regulation – think again
• “I don’t notice it in a huge way, if I’m honest.” (Senior Operations Manager, environmental services)
• “It's not like regulation is a huge issue...and we acknowledge you do need a certain level of regulation” (Financial Director, bio-tech software development)
• “it doesn’t take up that much of my time” (Sales Administrator, bio-tech
software development)
• use the existing evidence base that understands firms’ experience and behaviour (and not over-rely on what firms say – perceptions and attitudes)
• use research approaches that look at behaviour as well as attitudes
if you believe government regulation is the main way in which firms feel put upon/controlled – think again
• not just the government, but financial intermediaries• current and future investors have certain expectations of firms (shaping
behaviour):• “the management team believed there was a better way of doing it but the
investors wanted it done a different way;…if they want to do it like that it ties us up in knots, but it’s their money” (drug delivery technologies)
• other firms/parent companiesimposing standards, IT systems, targets, culture:
“I keep thinking that we’re going to plateau out and get used to it but then something else is thrown up” (sustainable energy)
• small firms themselves – self-impositionfirm culture, growth aspirations and expectations (sustainable energy – professionalization)
• “regulation” comes at firms from all directions – beware overestimating the importance of government regulation
summary findings
• yes there are burdens• the usual suspects – employment; uneven enforcement• and some less well-known – inter-organisational
displacement burdens (corporates passing on responsibility/cost)
• there’s government regulation and broader forms of “regulation” (e.g. financial – VCs etc.)
• however, regulation is ordinary and inevitable structural feature that constrains and enables
• regulation can generate growth