by Dr. Thomas Goldsmith - @ThomasGoldsmith
It is a complex landscape for businesses out there, no matter which side of the Pond they’re on. In any given sector there is a labyrinth of rules and regulations to navigate. For businesses that trade internationally, you have to deal with the complications twice over. But this complexity is exactly why it is important for companies, especially small and medium size enterprises (SMEs), to engage in the policy making process. If you don’t, the result will be rules that only work for big actors and not the majority of businesses. Luckily there are organisations out there that can help.
SMEs in the Economy
Small and medium sized businesses represent the bulk of the Canadian economy. As of December 2017, small businesses consisted of over 1.18 million companies in Canada - 97.9 % of all businesses. They employed 8.3 million individuals, with Canada’s 21,926 medium sized businesses employing a further 2.4 million people. SMEs are also major traders too, contributing just under 42 per cent of the total value of exports. SMEs play a similarly vital role in the UK where they account for 99.9% of businesses and employ over 16.3 million people.
The Policy Gap
Despite the weight of SMEs in both the UK and Canada, it won’t surprise anyone that it still tends to be large companies who currently shape policy debates. After all, they have the resources to dedicate in-house teams to policy and public affairs, and then often supplement these efforts further through outside lobbyists. In contrast, small businesses may lack the resources to dedicate their time, money, or energy solely to policy engagement.
But from requirements on data protection, licensing, trademarks and copyright, through to those on the business set up and staffing laws, hundreds of different policies affect small businesses as they stand on the outside looking in. This disengagement with policy making is unfortunate, because good policies and regulatory reform can help transform the way SMEs operate. At the very least, they can go a long way to reducing the bureaucratic and administrative burdens that may be disproportionately difficult for small businesses to comply with.
While large businesses can easily afford an army of legal and compliance experts, small businesses can’t. It is especially important then to make sure that the policies affecting business in Canada are well designed and can meet their objectives for small, medium and large business alike.
Routes to Influence
Influencing policy makers and shaping regulation can seem like a daunting process. For one, there are many levels to engage with. Some policies are set at the municipal level, such as the business permits required to operate. Others are set at the provincial level, for example regulations around emerging industries such as cannabis and autonomous vehicles. Additionally, some policies are set federally, such as those covering data protection, privacy, and foreign workers. Finally, if businesses are trading across borders then some of the rules governing this are set at an international level through international bodies like the World Trade Organisation (WTO). To only have large companies input into how these regulations work means that they are designed primarily with large businesses in mind. As SMEs stand outside these active spheres, they may not even notice the ways in which policy reforms make operating their business more cumbersome.
So how can small companies exert their influence?
It is worth stressing at this point that politicians and policy makers value the input of small business owners, in part because this cohort is so often hard for them to reach. While they are often bombarded with submissions from lobbyists and large corporations, there is an obvious and indisputable benefit to them hearing genuine input from those that make up the vast majority of the businesses in their ridings or communities. In my previous role as Brexit and Trade Policy Manager with techUK, the UK’s largest tech trade body, I organised business delegations to accompany us to the WTO in Geneva. It was not the large tech companies who attracted the most interest from diplomats and global policy makers, but the opinions and views of SMEs engaging with the barriers to international trade for the first time.
Obviously, SMEs can’t dedicate day to day attention to policy. But this is where trade associations and chambers of commerce can step in to play a crucial role. Whether it is through the Canadian Chamber of Commerce or Ontario Chamber of Commerce, Chambers’ can not only connect you with other businesses but also amplify your voice. Other associations can represent your particular sector, such as techUK, who represent digital and tech companies operating in the UK. Some groups are also specifically focused on addressing the needs of small businesses in particular - such as the Canadian Federation of Independent Businesses (CFIB) or the Federation of Small Businesses (FSB) in the UK. Finally, bodies such as the BCCTC can also provide a valuable forum for voicing specific barriers to bilateral trade. Collectively, the SMEs who organize together under one of these bodies have the potential to speak loudly in a sphere that they are currently absent in.
Ultimately, policy is shaped by those who turn up. If small businesses don’t participate, either through their own initiative or through other forums that allow them to organize together, then the policies being drafted today for enforcement tomorrow will not reflect their interests and concerns. But those who do engage with policy makers are much more likely to see the reforms and results needed to help their businesses prosper. The time is now to make use of the resources available to take your seat at the policy table.