Abstract
A History of Enterprise Policy: Government, Small Business and Entrepreneurship presents a detailed and informative insight into the historical analysis of enterprise policy in the United Kingdom. Enterprise policy has become a popular means to increasing economic growth, yet there is little in-depth understanding of the background to such policymaking. This book fills an important gap in the policy literature. Mallett and Wapshott are ideally placed to fill this gap since they are no strangers to researching and practicing in the domain of enterprise policy, both with extensive careers and expertise in enterprise policy and in working alongside small and medium-sized enterprises (SMEs) and government, most notably in their work on regulation.
Their book begins by exploring what is enterprise policy and why it is important. The book opens with some of the key points of enterprise policy which have been debated over the years in the United Kingdom: the expenditure in creating an entrepreneurial economy and the complexity of the enterprise policy agenda. This sets the stage for what follows. They provide a brief but succinct overview of the history of enterprise policy. The authors take a historical institutionalist approach, from which they pay ‘attention to real-world empirical questions, its historical orientation and its attention to the ways in which institutions structure and shape behaviour and outcomes’ (Steinmo, 2008: 118).
Mallett and Wapshott explore the developments of enterprise policy in four stages: pre and early enterprise policy agendas (Chapters 2–4), formalising an enterprise policy agenda (Chapters 5–7), Thatcher and the enterprise culture (Chapters 8–10), and post-Thatcher, new ideas (Chapter 11).
Chapter 2 starts at the beginning of the 19th century and sees small firms dominating the economy without much interference or support from the government. The latter part of the century sees a growing number of larger firms with government advocating for industrial policy, leaving small businesses out in the cold. Chapter 3 highlights the finance gap, with commentary from the Macmillan and the Radcliffe Committees, as well as insights into the valuable Industrial and Commercial Finance Corporation. It also documents how both World Wars, together with the social and economic impacts, led to the cornerstone of enterprise policy by highlighting the Macmillan Gap which the authors call ‘The Birth of UK Enterprise Policy’. The dominance of the larger businesses in the interwar years created a challenging environment for small businesses and the authors identify the challenges they faced, namely access to finance (and how some initiatives were set up to address this challenge). Chapter 4 concentrates on enterprise policy focussing on regional disparities. This interest in regional policy led to the beginnings of advice and support to small businesses, attempting to address some of the challenges through the Special Areas Act. One of the most important moments in this era was the formation of the Confederation of British Industry in 1965.
Chapter 5 outlines the changing government agendas with the establishment of the Bolton Committee to understand the small business landscape in the United Kingdom and the lack of commitment from the Committee to fully support small businesses as there was several stakeholders to appease, namely the government. Chapter 6 provides a fascinating read: a new government led to the small business agenda becoming a legitimate policy agenda with the creation of the Small Firm Division, opening small firm information centres across the country to offer support services, offering training services for a fee, attempting to provide finance to small firms and the setting up of the National Enterprise Board. However, one of the biggest stumbling blocks to advancing the case for small firms in the 1970s was the changes to taxation. Chapter 7 takes the reader to the end of this era, focussing on the impact of joining the Europe Economic Community. This led to pressure on the United Kingdom to consider how important SMEs were to the economy and allowed the United Kingdom to access European funds (e.g. the European Regional Development Fund) which sought to address regional inequalities.
Chapter 8 documents a new era of enterprise policy, which led to a better understanding and focus on its development from the 1980s onwards. Thatcher’s political agenda was very much focussed on reversing the decline of small businesses and in creating an ‘enterprise culture’. There was also a drive to ensure that financial challenges were addressed by introducing initiatives such as the Enterprise Allowance Scheme. Chapter 9 brings attention to another key challenge that SMEs have faced over the decades – to remove regulation to support a free market. There were also new approaches to regional policy which included Enterprise Zones, Local Enterprise Agencies, regional funding, seeking support for inner cities and a further commitment to prioritising deregulation. Chapter 10 sees the introduction of soft support for SMEs which involved creating Training and Enterprise Councils and Business Link where enterprise policy was key in being part of the broader agenda of market liberalisation. Chapter 11 focusses on a current key priority for government – using enterprise policy to address deprivation and exclusion. The authors take us through the various initiatives that governments established to assist and support SMEs, including the Small Business Service, better regulation, access to finance and the fight for joining up enterprise policymaking.
In summary, this book provides an insightful historical review of the ups and downs of enterprise policy throughout the years. It highlights how different government interests shaped small business growth over many decades. While various committees and published reports have changed the policy discourse for enterprise, the authors rightly point to some important questions that remain unanswered. They also offer insights in how to address the questions and conclude by arguing: ‘while significant funds have been deployed for enterprise policies in the more recent era, the underdeveloped political machinery and a lack of influence across wider government often leads to a lack of scope in ambition or implementation’ (p. 195). This is a highly interesting read for all enterprise policy scholars.