According to research by Spend Network for innovation charity Nesta, less than three per cent of the published procurement transactions between 2012 and 2014, worth a total of £68bn, went to small business in their first five years of operation. An even smaller amount, just half a per cent, were awarded to small firms within the first two years of being in business.
There are perhaps quite a few reasons why small firms aren’t given the same chance to take a slice of the public sector contracts pie. A “play-safe” attitude of those in government procurement departments to stick to established and incumbent providers will hurt the chances of small businesses as will the high levels of bureaucracy and the number of hoops business leaders have to jump through just to get noticed.
Whatever the reason, startup and small business teams have to overcome many obstacles on their journey to success, but sometimes if these kind of firms are given an opportunity to prove their worth to a bigger or more lucrative audience they can take that chance with both hands.
Enabling more companies to operates equally in a marketplace, whatever the size of each, encourages competition and innovation, which can only benefit all involved.
The guys running government procurement could learn a lot from the world of sport. We often hear about the synergies between sport and business. Indeed, there are plenty sporting heroes earning a crust after retirement delivering motivational talks to business people on the speaking circuit.
And, with the country gripped by Rugby World Cup fever, they only need to look at what Japan did to the mighty South Africa at the Brighton Community Stadium at the weekend.
The Springboks were odds-on to beat the relative minnows from South East Asia, but they upset the odds with a 34-32 victory and proved the sport’s governing body, World Rugby, right in its decision to expand the competition and let more so-called smaller nations take part.
Japan hadn’t won a World Cup game since 1991 and were on the wrong end of a 145-17 hammering by New Zealand in 1995, which is in the record books as being the game with the most points scored in a game by a single team. However, they’ve kept at it and been given the chance by World Rugby to keeping giving it another try, if you excuse the pun.
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Sport is full of fantastic underdog stories, from Wimbledon’s “Crazy Gang” beating the all-conquering Liverpool in the 1988 FA Cup Final to Oliver Wilson, ranked 792 in the list of golf’s best players, winning the Alfred Dunhill Links Championship ahead of Rory Mcllroy last year.
It would be nice if those stories could be repeated in the world of business. I come across startup firms all the time which have great ideas and a solid commitment to being successful. The massage business Relax at Work, our personal trainer James Dean, and Pimlico’s own craft beer pub Cask are just three examples. If businesses like mine can take a punt on startups, then why can’t the public sector?
Small businesses add competition, innovation and a level of fleet-footed anticipation to markets that you just don’t get from huge corporations. Given a decent sporting chance, these kind of companies could just change the result for their future and the British economy.
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