Small business dismissed as second-class

massey-university

Thu Aug 02 2007 12:00:00 GMT+1200 (New Zealand Standard Time)

Small business dismissed as second-class

Thursday, 2 August 2007, 4:29 pm
Press Release: Massey University

Wednesday, August 1, 2007

The Government has been accused of treating small business owners as second-class citizens.

Small and medium business researcher Claire Massey says SMEs get very little by way of support and encouragement. “The only exceptions are firms producing high-tech products or who can boast an exceptional export opportunity. For the rest, the Government effectively says, ‘We don’t want to know you’.”

Professor Massey delivers her Inaugural Professorial lecture at the University’s Wellington campus tonight (Thursday). The lecture is the second in the University’s Wellington Deputy Vice-Chancellor Lecture Series for 2007.

Professor Massey, Director of the New Zealand Centre for Small and Medium Enterprise Research, notes that New Zealand has more than 350,000 SMEs, accounting for more than 99 per cent of the business population and 60 per cent of all employment.

“We have 1448 private sector firms that employ more than 100 staff – all up, roughly half the total labour force,” she says. “We have almost 400000 more firms that employ the rest of the work force. As consumers they supply us with everything from specialist shopping experiences to professional services – these people run our favourite restaurants, and make our favourite wine.

“They also make it possible for large firms to focus on the profitable end of the market – by providing them with services that are only economic if your motivation is more complex than profit.

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“But small firms are largely absent from the thinking about economic transformation – or dismissed as unimportant unless they demonstrate more than 20% growth for 5 years or more.

Professor Massey says for the bulk of New Zealand owner-managers, economic transformation is a hard concept to translate. “And while we continue to focus so narrowly on finding the next generation of winners, we will fail to connect with those people that make up the bulk of the economy.”

A survey by Professor Massey’s centre has shown that many small firms do not use government organisations set up to support them. Only 8.5 per cent had received assistance from the Ministry of Economic Development, and 14.8 per cent from New Zealand Trade and Enterprise. Many had little understanding of the government assistance available to them, and believed it could come with strings attached.

She says government agencies need to take a note of such signs, and make greater efforts to reach out to small businesses, if they are serious about helping to transform the economy.

Professor Massey will analyse international approaches to SME development and present a framework for developing New Zealand firms, focusing on the people who own and operate them.

She is Professor of Enterprise Development at Massey and is the first New Zealander to fill a senior role in the International Council of Small Business, as Senior Vice-President (Research). She has been a driving force in the council’s strategy to make relevant research on small business more accessible.

ENDS

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