managing regulation:
what small firms need to know
12th June 2012
agenda
1.00
1.15
1.25
2.20
2.35
3.35
what are your assumptions about regulation?
our project
our findings: how you enhance firm performance
coffee
have your say: what goes on in your firm?
wrap up
what are your assumptions about
regulation?
why?
the project
ESRC study of how small
firms receive, understand
and respond to regulation
we know lots about what
entrepreneurs say/think,
less about what they do
researching businesses
over time is needed to see
how they adapt to change
what we did
worked with 14 high growth small
firms in the North East and East
Midlands over 28 months
funded by UK government’s
ESRC and supported by BIS
outcomes
insights for small firms
encouraging better regulation
deepening the knowledge base
Sector
Bio-Business
Environmental
Services
Security
Film & Media
Firm
Approx size
Year
founded
Location
Bio 1 (bio-tech software development)
30
1989
Bio 2 (drug manufacture)
50
2008
Bio 3 (drug delivery technologies)
15
2002
Bio 4 (drug development)
52
2007
ES 1 (waste treatment )
20
2002
ES 2 (environmental testing service)
40
1999
ES 3 (pollution control )
10
1995
ES 4 (sustainable energy)
20
2007
East Mids
S1 (vision technology)
32
1992
North East
S2 (imaging technologies)
40
2003
S3 (clothing/armour protection)
40
1989
East Mids
FM 1 (digital communications)
10
2000
North East
FM2 (design agency)
7
1990
East Mids
FM3 (TV facilities company)
7
1998
North East
East Mids
North East
the fieldwork
• collection of data from web, trade press etc.
• keeping abreast of policy developments
• http://www.youtube.com/watch?v=UmmQao_Hjeg
• interviews with owner-managers, workers, policy makers,
regulatory bodies, VCs...
• three sweeps of interviewing and observing work in each
of 14 sample firms
our findings in 7 questions:
how you enhance firm performance
1. in what ways can regulation be a burden to you?
2. in what ways can regulation be an opportunity for
you?
3. what kinds of regulation matter most to you?
4. who is regulating you?
5. in what ways do you shape regulation?
6. who helps you manage regulation?
7. how do you get on with regulators?
1. in what ways can regulation be a burden to you?
•
the usual suspects: staff time = cost, administrative
duplication, lack of enforcement, unclear and inconsistent
guidelines, employment law stacked in favour of
employee, unfair for small firms...
•
it assumes the worst of us: employment law
“built on a premise that all employers are bastards!” (bioscience – maternity)
•
lack of clarity about policy intentions and timing
“the speed and clarity of decisions damages businesses”
(sustainable technology – Feed-in-Tariff policy)
• trend of displacing burden to the firm
“all they've done by that is move the anxiety and the burden
onto the firms” (bio-tech software – Companies House audit)
2. in what ways can regulation be an opportunity
for you?
•
•
creates market opportunities
•
promotes innovation: incentives for new technology development
(imaging technologies – airport security)
•
changes in policy frame market behaviour (sustainable technology –
energy incentives policy)
signals legitimacy in the marketplace
“keeps out the cowboys” (environmental services – complying with
laboratory protocols)
•
signals market leadership
internal code of conduct to alter behaviour in supply chain (sustainable
technology)
•
sustains regulatory services industry: creates jobs!
3. what kinds of regulation matter most to you?
• investment in core business model
versus ‘simple compliance’
sector specific intellectual property versus
out-sourced generic health and safety (drug
delivery technologies)
• protection from litigation
expert advice on redundancy procedures
(digital communications)
4. who is regulating you?
• not just the government, but your financiers
current and future investors require certain
behaviours from us (drug delivery technologies)
• other firms or parent companies
imposing standards, IT systems, targets, culture
(drug development – customers/supply chain)
• you!
your culture, aspirations and expectations
(sustainable technology - professionalization)
5. in what ways do you shape regulation?
• lobbying regulatory bodies
meetings with regulators, UK, EU, global (security
technology – emerging rules/policies: airport
security)
• routinely exercising your voice
sitting on various boards, steering groups
(environmental services – engagement with EA)
6. who helps you manage regulation?
• external consultants and experts
feeling safe, especially with HR regulation (bio-tech
software – “it’s a security blanket”)
• personal contacts and old friends/colleagues
knowledge sharing via adapting documentation/systems
from a previous employer (environmental services – ISO
compliance)
• regulators
consulting regulatory body prior to innovation (drug
delivery, paying MHRA: “it was money well spent”)
7. how do you get on with regulators?
• lots of you don’t
limited contact, little knowledge or understanding
(“Our relationship with HMRC? There is none”
medical technology developer)
• some of you have regular informal contact which
is strategically useful (environmental testing –
HSE Inspector: “not everyone’s got that degree of
access”)
coffee
discussion groups – have your say
1. Do our findings reflect your experiences or those of your
clients?
2. Are there any other regulatory issues you would like to
raise?
wrap up
•
http://www.ncl.ac.uk/nubs/research/projects/rebel.htm
•
our dissemination plans (e.g. FSB, EA, BRDO...)
•
June 29th policy-oriented conference (BIS, London)
• Where Next for Small Business Regulation? Building Better
Policy, 12.30-2.30
• register: http://forms.ncl.ac.uk/view.php?id=3190
•
further academic research
• further knowledge exchange grants
• post-doctoral researcher
•
how else can we reach you (and other firms) with our
messages?
•
please complete feedback form
thank you