Why Scotland can succeed with Small Business Values

small biz scotland

 

Thursday 18th September is a monumental day for the people of Scotland – The simple question is “Should Scotland be an Independent Country?” I shall omit political views and focus this article on how Scotland can become a great wee nation by applying the values of a successful small business. I’m an advocate for Small Business and believe smaller companies have advantages over larger ones, such as the ability to connect 1:2:1 with their customer base, long term sustainable growth and specialising in key business functions – after all Small Business is Good Business.

Decentralisation

The centralisation of power in a company and country grants that power to a select few. In business individual departments have less control over their budgets, management have less influence on how to operate with decisions being made by the higher echelons of a company whom have little to no local or specialist knowledge of those departments.

A fairer distribution of powers is surely more conducive in the hands of local authorities. How is it possible for someone in Westminster to know what the people & businesses in schemes of Glasgow & Edinburgh really need? Who hears those voices, listens to their concerns they air on a daily basis? Regardless of the party in power, surely it’s local Councillors and Authorities who should be in control of distributing budgets, setting policies and delivering what everyday voters desire?

Borrowing

Borrowing facilitates growth, but only by assuming increased risks. You may achieve growth quicker, but you’ll pay more. The UK like most of the developed world managed to create a boom & bust situation by excessive borrowing. Smaller nations must control borrowing, by doing so you reduce the interest payments and decrease risk. There’s no requirement for small nations to be the biggest and best, growing sustainably over the long term should always be the solution over short-term rapid growth.

Harness strengths in Key Local Industries

A Small Business has infinitely more knowledge about say women’s fashion that a supermarket has – they’re not generalists, they specialise in knowing the needs & trends of their market segment, materials and styles. Scotland is undeniably a world leader in industries such as Science, Renewables and Oil & Gas. Take Oil as an example, as each day passes that natural resource depletes, this has created an emphasis on renewable energy like wind, solar and tidal energy.  Michael Porter’s Diamond model emphasises the benefits of comparative advantage such as:

  • Enhanced knowledge base & skilled labour
  • Condensed rivalry resulting in innovation & increased investment
  • Increased government investment (such as renewable energy)
  • Growth in related & supporting industries

An independent Scotland doesn’t need to become successful via economies of scale. By simply focusing resources like labour, money & government support into key Industries a competitive advantage can clearly be achieved. Just look at Aberdeen’s Oil & Gas sector (now including renewable energy) or the Bush Estate for Science in Edinburgh, localised specialism’s in flourishing industries can be created – but only through efficient utilisation of resources and enhanced powers for local authorities.

It’s simple Economics, with overall budgets being squeezed due to austerity cuts the laws of opportunity cost dictate that you can only buy A or B, never both.  Being small isn’t a disadvantage, although big companies will tell you otherwise. Instead of biting off more than you can chew, do the small things well and success will follow.