Joint forces might help local funding
Jun 2 2009 by Neil Warwick, The Journal
NICK Parsons, head of market strategy at National Australia Bank addressed an audience in Thornaby recently.
He stated: “The SME sector is the backbone, not just of the North East, but of the whole UK economy. It is massively overlooked and doesn’t get the attention or the credit it deserves.”
A timely comment when considering a survey of 2,000 entrepreneurs carried out by cmypitch.com, recently led to the headline “Government is failing small businesses”. The survey indicated that many entrepreneurs don't know about Government help for SME cashflow.
The Service Network survey into Knowledge Intensive Business Services (KIBS) indicates that innovation in the KIBS sector will assist the region in coming out of the economic downturn.
During a recession economists make predictions about how bad, how deep it will be and how long it will last. As the recession begins to bottom out, people look to surveys to substantiate or refute earlier predictions.
Taking this information, the SME sector could stimulate economic growth through innovation provided by the KIBS sector, provided there is Government support. Unfortunately, Government support is largely unrecognised at the minute and will soon dry up.
This may or may not be true at a macro level, however, at a regional level it is not accurate. Government, in the form of Government Office North East, One North East, Business & Enterprise North East and the Enterprise Agencies, has been quick with products such as the Regional Enterprise Loan Fund and the Transitional Loan Fund. A huge amount of work is being done on the Access to Finance programme and work is being started on joining the resources of the public sector with skills of the private sector to find new solutions to stimulate cash flow.
If Government funding is to diminish as public sector borrowing increases generally, the solution may be for the private sector to join forces with the public sector now, in anticipation of the change of the regional funding landscape.
Neil Warwick is partner and head of the Kudos department at Dickinson Dees LLP.
