Environment and Planning C: Politics and Space

Using data from a longitudinal study of working-class participants on a youth enterprise start-up programme in the United Kingdom, we examine whether programmes aimed at disadvantaged groups enable parents to combine business trading with childcare responsibilities. Business planning and programme selection practices ignored childcare, rendering it a solely private matter, invisible to public scrutiny. Yet this childcare barrier became both a cause and a consequence of business failure. Participants' experiences of combining trading and childcare varied by gender. All mothers and one father had complex strategies for synchronising trading and childcare responsibilities. However, these strategies soon collapsed, contributing to business closure. Most fathers relied on the childrens' mother to organise and conduct continuous care, but this was dependent on fathers becoming breadwinners through profitable trading which was not achieved. There is growing policy recognition of the importance of the childcare barrier to paid work for lower income families and for self-employed women in the United Kingdom. However, despite recent initiatives, severe constraints remain for working-class parents to start and manage a business. Several implications for policy are discussed.

Although there is broad recognition amongst policymakers of the significance of new business start-ups to the economy, there is an ongoing debate in the research literature as to the feasibility and desirability of intervention at this stage of business development. Of particular concern is the extent to which government can target resources so that there is substantive additional impact arising from public intervention. Using the experiential ‘decision rules' of private investors, the author develops a broad framework for assessing the future potential of new ventures. Implications are considered for intermediaries working with all types of new venture prospect.

Despite an increase in the amount of research on the programmes that many governments around the world are using to guide firm development, develop managerial capability, and encourage firms into undertaking practices that will result in improved performance, there is no agreement within the research community on an appropriate way of conceptualising the task of ‘business development’ or of designing specific developmental programmes. Instead, there is a plethora of frameworks that categorise the overall policies and the programmes in terms of: the service they deliver (for example, ‘hard’ or ‘soft’ programmes); the target group (for example, women, ethnic groups, older or younger people); or by the outcome they wish to achieve (for example, the development of export capability).

Although they are useful from an operational perspective, that is, from the perspective of a policymaker faced with the task of allocating scarce resources, these approaches do little to address a critical aspect of business development that is especially evident in small firms: the interrelatedness of the firm and its owner. After reviewing the available frameworks, and discussing the problems of operationalising them, the author presents a new framework and demonstrates its use by applying it to the case of New Zealand. This framework is based on two dimensions: the development potential of the firm and the development potential of the individual—an approach that has hitherto not been used, despite the recognition of the interrelatedness of the firm and the individual, especially in countries where there are large numbers of micro enterprises. The framework contributes to the ongoing debate on the design of effective developmental programmes by enabling policymakers to focus on the key issues—developmental potential—rather than simply on the individual's membership of a specific target group.

Current UK policy views the encouragement of enterprise by black and minority ethnic (BME) communities as a key strategy of both its social inclusion and its competitiveness agenda. However, the evidence suggests that the take-up of business support by these groups is very limited, and recent research has argued for the need for more culturally sensitive provision and a better understanding of the diverse needs of different BME groups. This paper reports on a study of first-generation and second-generation Vietnamese businesses in London, designed to explore traditional cultural influences on business practice. The results suggest that, as with many other ethnic groups, attitudes towards the family, trust, and language have a key impact on the start-up and operation of the businesses. However, this study suggests that the ways in which these three factors impinge on business practice vary between the older first generation (the original ‘boat people‘), the UK-educated second generation, and younger more recent immigrants, and is also mediated by sectoral influences, the pressures of the marketplace, and the degree of family involvement in the business. In particular second-generation and recent immigrants were less likely to adopt traditional collectivist approaches to the running of their business compared with the first generation, but their business practice was still often influenced by strong family loyalties. The author argues that theories of ethnic minority enterprise that advocate a mixed-embeddedness approach need to incorporate an historical dimension. The findings emphasize the need for enterprise-support policy to take account not only of intercultural differences, but also the intracultural differences that exist within different ethnic minority groups. The author makes a number of suggestions as to how policy and practice should be adapted accordingly.

The study explored the determinants of small and medium-sized nontraditional exporters' choice of type of finance (formal or informal). The empirical results revealed a negative relationship between age and formal finance, suggesting that newer firms depend more on formal finance and less on informal finance. In addition, the study found positive and significant relationships between formal finance and size and growth of the firm. This suggests that larger and high-growth firms require more funds to finance their expansion and growth opportunities and therefore employ formal finance. Finally, the results of the study also indicated that the proportion of formal finance increases with increasing international activities, suggesting that, as firms engage more in international business, they employ more formal finance and less informal finance. Recommendations are made in this regard.

The small-business sector is the breeding ground of new businesses, but distinguishing those firms that wish to grow from the hundreds of thousands of lifestyle firms is difficult. Studies suggest very few small firms seek growth, and fiscal policies aimed at promoting business growth could be misdirected in the belief that the ambition to grow is widespread in this part of the economy. The small-firm sector is dominated by the self-employed and an important classification is the large numbers of ‘own-account self-employed‘. It is unclear to what extent these people should be classified as true ‘business owners‘. Using face-to-face interviews, the authors explore the motivations for becoming self-employed and the growth aspirations of self-employed people. Based on the outcomes, suggestions are made about how fiscal policy might be targeted to improve neutrality and promote business growth.

A national minimum wage (NMW) was introduced into the United Kingdom in 1999 as part of New Labour's active labour-market approach. The level has been uprated on several occasions since then. Most research suggests that the NMW has benefited low-paid workers while having little adverse impact on employment levels. This paper explores the regional impact of the NMW on the small business sector, using data from the Federation of Small Businesses' biennial survey, the largest business survey in the United Kingdom. Overall, just over 21% of businesses with employees uprated employees and just under 10% of employees have benefited from pay uprates. The impact has varied across industries, with the greatest effects in the hotels and catering sector. In general, affected businesses have anticipated that they would be able to absorb the costs, although in some cases at the expense of a slight decline in profitability. The impact of the NMW also varies across the regions, having the least impact in London and the South East and the greatest impact in the ‘north‘. In the northern regions, businesses are less able to absorb the increased costs and more likely to respond by increasing prices. This has potential implications for the competitiveness of small and medium-sized enterprises in these regions, which is more likely to be based around price and cost advantages than their counterparts in the south. The Low Pay Commission therefore should give greater attention to the geographical impacts of the NMW in its evaluation and when proposing future increases in the rate.

Simple neoliberal approaches ignore the importance and power that the state has in making decentralization effective. This is shown through a critical analysis of local economic development in which evidence, from three projects in a second-rank Turkish industrial centre, Kayseri, was used. Turkey's recent moves from highly centralized systems of governance to neoliberal policies of economic devolution reveal a poor understanding of how the roles of state and its institutions operate. The findings illustrate that the control of narrow political interests distorts local priorities and projects, and many civil society groups remain ineffective in the face of local initiatives. The author concludes that decentralization without competent state administration is likely to aggravate social fracturing and to foster inequalities while, at the same time, failing to ameliorate public service and economic development.

Since the Second World War, Australian governments have adopted various approaches to governing nonmetropolitan Australia. The authors profile three distinct approaches to governance characterised as (1) state-centred regionalism; (2) new localism; and (3) new forms of multifaceted regionalism. Although recent policy initiatives have been justified by the argument that the region is the most suitable scale for planning and development in nonmetropolitan Australia, in practice the institutional landscape is a hybrid of overlapping local, regional, and national scales of action. The authors compare this new, multifaceted, regionalism with the so-called ‘new regionalism’ currently being promoted in Western Europe and North America. It is argued that new regionalism differs in quite important ways from the regionalism currently being fostered in Australia. In Australia, the centrality of sustainability principles, and the attempt to foster interdependence amongst stakeholders from the state, market, and civil society, have produced a layer of networked governance that is different from that overseas. It is argued that there is a triple bottom-line ‘promise’ in the Australian approach which differs from the Western Europe/North American model, and which has the potential to deliver enhanced economic, social, and environmental outcomes.