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How government can support SMEs during COVID-19 and beyond
How government can support SMEs during COVID-19 and beyond
Words: LJ Charleston
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THE AUSTRALIAN BUREAU OF STATISTICS’ latest survey of COVID-19 business impacts shows 35 per cent of small businesses just 18 per cent of large companies).
Dr Andrei Lux and Dr Flavio Macau from Edith Cowan University researched 223 business owners. SME is struggling, it is not only due to an individual entrepreneurs’ personal resources and capabilities; the local business environment also plays a major role. Dr Lux and Dr Macau believe governments need to focus on.
1. SMES NEED GOOD ADVICE
“Our research shows that access to professional advice, including tax, difference to small business outcomes. During an economic downturn, spending on these services can be when they’re needed most, as business owners face tough decisions, such as whether to borrow to keep their says Dr Lux, lecturer in Leadership and Organisational Behaviour.
“Governments will need to ensure that professional services are available and accessible to small businesses on
According to Dr Macau, senior lecturer in Supply Chain Management and Global Logistics, sometimes the advice is there and small businesses don't know about it or how to access it.
“Business owners may know about the advice and think it is too complicated, off-limits or rigged. Governments could step up and teach business owners even more on how to take the most value from the services Macau. “It can be frustrating but like Sisyphus, it is governments' job to roll
2. PROMOTE MENTAL HEALTH
The pandemic has already put the spotlight on mental health around the world, as many are struggling to Research by Dr Macau and Dr Lux shows that business owners’ mental health resources have a direct effect
“The mental strain of the pandemic, lockdown, and subsequent economic downturn, is making things even harder for small business owners. That’s why it is particularly important for governments to support small business owners’ mental health as part of their
“There is much talk on how the pandemic affects our mental health but not that much on how we can persevere and heal. Local government support groups could help business owners facing what possibly is the greatest professional challenge of
3. GOVERNMENT PROCUREMENT
Dr Lux and Dr Macau maintain small businesses should be given a real advantage in procurement and that all policies and processes are clear, protective and accessible to the “small ensure that access to this help is not the large corporations. Ombudsman, Kate Carnell, has proposed that federal government contracts worth up to A$10 million go through a small business panel as part of the tender process. Dr Lux and Dr Macau agree with Ms Carnell’s statement that “lowest cost is not
4. ENCOURAGE PEOPLE TO BUY LOCAL
Buying local is more important than ever before. Dr Lux says the reason is explained by the 'velocity of money'.
“Let’s say you get paid $10, and you use that $10 to buy dinner from a local take-out, that pays the chef's wages, who then uses that $10 to take an uber home, the uber driver pays that $10 to a babysitter, who then uses it to buy groceries. That $10 has produced $50 worth of economic value for your However, Dr Lux claims there are two big problems with this: “You buy from a company based overseas—the same process happens, but over there, and that $10 (and the subsequent $50) have left our community. Also, if you buy from a big business, even one that's Australian owned, some of that process still happens because those goods/services are provided by Australian workers, but wealthy business owners tend to just add the taking that money out of the economy. That's why it's so important to spend at local businesses in a recession, so that
According to Dr Macau, buying local is best for everyone.
“The best-case scenario is when you buy local because it is the best offer, reliability and speed. Where possible, local must be stimulated to excel globally, expanding to not only ensure that the money stays local but also that it is attracted from the outside to the community," says Dr Macau.
