Micro-policies and SMEs Flashcards
Definition of micro-policies?
policies which explicitly focus on SMEs and entrepreneurs
What are the 5 main policies? (FEARD)
Finance (access and provision), Enterprise culture, Advice, technology and innovation (R&D), particular groups (Demographics)
What did the European Commission (2003) find?
Only 40% of European desired self-employment, in comparison to 60% of Americans
What are the three ways you can develop an ‘entrepreneurial mindset’?
Change the education system, Graduate self-employment schemes, Work experience provision for young people
What are the three main education sectors that can be targeted when changing the education sector?
primary, secondary, tertiary (evening/ extra curricular learning classes)
Why target graduates over non-graduates with schemes?
graduate start ups are more likely to grow than non graduate start ups
What are the three main ways provision and access to finance can be improved for SMEs?
Bank loan guarantee schemes, small business grants, informal VC equity financing
What does the loan guarantee scheme involve?
The government providing the bank with between 50-80% of financial assurance, so that if the small business fails and they cant provide collaterals, the government will bail them out.
What does the loan guarantee therefore help achieve?
Small businesses without collaterals not being denied credit
How can a small business grant improve performance?
Reduces a business’ costs and to invest in new factors of production = this increases productivity and growth
How can the government encourage informal VCs to invest?
Match them with prospective businesses that wouldn’t normally have met in everyday conditions, provide financial incentives to business angels who invest in small businesses (such as tax breaks)
What are the two main ways free or subsidised advice can be implemented?
Advice to new or current businesses, subsidised international and national trade fairs
What are the issues with advice?
how they are administered (public or private?) and rationed (sector, owner, age, price, quantity)
What are the two variants in the technology and innovation policy?
Business incubators, R&D funding
What are the four main demographics targeted in ‘particular groups’
women, unemployed, ethnic minorities, young people
