points to smaller companies as the best bet to lift and sustain Britain‘s
economic growth - but only if, they can find appropriate finance.
SoCo takes its name from David Cameron‘s ‗Big Society‘ idea of decentralisation
of services away from the State. It applies that principle to the decentralisationof finance for smaller companies away from the dominating banks that refuse tolend to them and the financial institutions that are too big to embrace them.
suggest that, given proper incentives, business angels alone couldinvest £4 billion in start-up companies
a sum which is greater than any form of assistance that could be expected from the government.It observes that, thanks to the effects of the internet and new media, smallcompanies have a much greater chance of succeeding than ever before.SoCo points to the ever shortening time scales of companies from start-up to
global success and suggests that ‗there are embryo companies that we haven‘t
heard of today that will be world stridi
ng giants in under five years‘.
It highlights the resilience of an economy based on small companies:It draws fresh attention to the fact that smaller companies employ more than half the UK workforce and observes that, as they grow, smaller companies take onmore employees to cope with increasing sales, whilst large mature companieswith limited growth prospects often seek to improve earnings by reducing theirlabour forces.It records that small companies are drivers of innovation, registering more than60 per cent of all patents.It points out that small company by and large pay taxes whilst many of thelargest companies avoid them.It observes that when large companies fail, they cause national, even globaldistress; whereas when small companies fail, the effect is minimal and localised.Against that background it calls for a much greater differentiation of regulationbetween large companies and small.In particular, it calls for a sustained effort to be made to lift from smaller
companies the excessive burden of ‗catch
all‘ red tape that is principally designed
to monitor and control large companies. This burden has a disproportionateeffect on small companies.It pleads for a complete rethink of employment law for companies employing,
say, less than 20 people. This would take the vast proportion of the UK‘s
businesses out of a regulatory nightmare but would have little effect onemployment conditions. In this respect, it also draws attention to the greatersatisfaction enjoyed by employees of smaller companies who can see that their
efforts actually ‗make a difference‘.