A new approach to Collaboration can help Ireland’s small businesses navigate the Green & Digital transition

I was at the Fine Gael Small Business Conference at the weekend. It was held at TUS Athlone and it featured discussions on various aspects of business, including stages of business growth, balancing employment with financial viability, and a collaborative session where participants shared their perspectives. Alan Cantwell moderated the conference with speakers like Emer Higgins (Minister of State for Business), Paschal Donohoe (Minister for Public Expenditure), Peter Burke (Minister for Enterprise Trade and Employment), and business professionals such as Ger Killian and Joanne Sweeney.

The event aimed to provide advice, support, and practical solutions for small businesses which I believe it did. It concluded with a response to the collaborative session where business owners outlined the challenges they are facing. The conference was followed by the AGM of the Small Business and Enterprise Council where the Chair Kathryn Lynch was returned for a new term.

Developments such as domestically traded business now becoming eligible for Enterprise Ireland supports (previously it was export only businesses that qualified) and the newly introduced ‘SME Test’ (the intention is to ensure that new legislation takes into account the specific needs and challenges faced by small and medium enterprises (SMEs)) are a welcome sign that the Government is starting to really value the small and micro business sector in Ireland.

Current supports incentivise Winner takes all Behaviour

It’s well established that we get the behaviour that incentives and supports incentivise. I spoke from the floor on the topic of supports to small and micro businesses, that it is welcome that eligibility for grants is improving, but that the nature of grant supports need to evolve to meet the 21st century challenges that these businesses face. At the moment the vast majority of government supports for businesses are for individual businesses in isolation, employment grants, feasibility grants, capital grants etc. This approach incentivises ‘winner take all’ behaviour, one business’s survival at the expense of others or the ecosystem, is unintentionally incentivised by this long established approach.

We are now in an era where the efficient use of scare resources is more important than ever, pooling of resources between businesses where appropriate, rather than duplication, is now a priority. In the past state agencies were mandated not to support indigenous businesses addressing local or national markets due to a fear of displacement (i.e. we give money to Car Dealer A who grows their business and undermines Car Dealer B down the road). Now is the time to recalibrate these supports not to provide funding directly to individual business A or B in an area but to incentivise them to pool suitable functions and thereby increase productivity. Yes, they are in competition however there are certain back end functions that do not enhance competitive differentiation. And indeed most indigenous business sectors have representative organisations, the ethos of which is to promote their sector and internal cooperation amongst their members.

European Union has a forcing mechanism built into all grants to incentivise such collaboration, to be eligible to apply the applicant must be part of a collaborative consortium of partners across different regions and states, so it is not an alien concept!

Collaboration can facilitate the Green & Digital Transition and Hubs can help

The OECD has established that the digital divide for the business community is growing faster than ever, large and medium companies have the resources to harness the opportunities offered by AI whereas small and micro businesses are too stretched by the day to day to do so. By incentivising collaboration at the local level it is possible for more small businesses not just to survive in the challenging times ahead but to thrive.

At the level of locality communication needs to increase amongst micro businesses, this can help raise cooperation and over time real collaboration to jointly tackle the challenges and opportunities of the 21st century. However a new entity is needed at the grass roots level to facilitate this collaboration. I believe that this entity is the local hub, there are over 400 hubs across Ireland that are members of Connected Hubs. These hubs are ideally placed to deliver for communities at the level of the High Street through what we at the Dargan Institute call ‘Digital First Communities’, a model which harnesses technology to put people and places first.

A Vision for Ireland’s Small & Micro Business Sector

Ireland’s National Training Fund has a surplus of Eur 1.5bn+. Surely now is the time for a cohesive vision for Ireland’s small and micro businesses, the back bone of localities across Ireland, to be supported to collaborate and pool resources and experiences to navigate the big changes ahead.

Disclosure - I manage the Dargan Hub in Dun Laoghaire Town.