There has, quite rightly, been a great deal of focus recently about Labour’s relationships with business and business people. It is widely agreed that Labour need to develop a relationship with business that has been lacking in recent years, but not one that was as subservient as in slightly less recent years.
As Labour and the wider world struggle to determine what is needed for a 21st century approach to responsible Capitalism, we are naturally looking at new business models, as it is easier to start something right that fix something that has gone awry. So in recent months there has been a strong focus on how Labour can encourage entrepreneurship. How we can encourage the conditions that make new businesses flourish.
On the whole I think this is an excellent thing. Labour needs to work towards a sustainable and flourishing economy, and we will need to ensure we bring the people with us, those who invest and those who are invested in.
I do however want to sound two small notes of caution. It strikes me that there is a uniquely Labour way to be pro-business and a distinctly unLabour way. We need to make sure we are the former, because otherwise we have seen the effects of not being so.
Entrepreneurs put their own money energy and time into creating flourishing businesses. Good and successful projects lead to jobs, are a boost to the economy and to tax revenues to improve public services. But they are not the only ones at risk. Those who go to work for a start-up are also risking their security and investing their own time and energy into the success or failure of the business. Good employers don’t forget that and neither should we.
So we need to make conditions better for start-ups. We need to make it easier for them to survive their treacherous first few years until they are well established and sustainable. But to be responsible, we need to do so in such a way that means they are established as genuinely sustainable businesses. That means businesses that treat their employees well and maintain a healthy longevity in their workforce.
I am a Non-executive (unpaid) Director of a small business. I know that the owner and MD of the company is essential to its good running and to making sure it stays healthy and profitable. But we both know that she simply could not do so without the right staff making that happen. So we pay decent wages and have good working conditions and practices for the people we employ. As a result, our staff – most of whom are in their 20s – have stayed with us for far longer than would be the norm.
I’ve worked in large places that get this right and small places that get this wrong. I’ve worked in good and bad private sector companies and good and bad voluntary organisations. The key difference is the way people are treated. Interestingly, I would say those organisations that treat people less well are those that have also been less successful on the whole. Motivation is a powerful force.
So when we are talking about encouraging entrepreneurship, I say bring it on. But let’s not forget that those entrepreneurs need employees and we can’t forget about those. We need to look at conditions that don’t just foster immediate and short term investment, but that produce long term sustainable businesses in which owners and employees alike feel like stakeholders. When we talk to entrepreneurs, we should also talk to those who work for them and gauge an understanding of what makes them tick too.
Without the right conditions for the workforce, the enterprise is doomed. Ensuring both flourish together in partnership: now that’s responsible capitalism for a sustainable 21st century.