Opinion

Digital services are key to starting, and growing, a business

6 min read

04 August 2016

It has been reported that council funding will be reduced by 6.7 per cent between 2016 and 2020, with the bulk of the cuts taking place in the first two years. As a result, councils in many areas will not have enough money to meet all their statutory duties.

One of the most in demand services Local Authorities (LAs) are responsible for, is the provision of business advice, guidance and support. Effective online business advice services are available already that offer flexibility and can help councils to reduce cost.

However, LAs continue to deliver these services predominantly over the telephone and face-to-face, usually between 9am to 5pm, in places such as council offices and public libraries.

A public resource that has seen substantial cuts is libraries. In the last five years, library funding has been cut by more than £180m, representing a 16 per cent drop. Public libraries in England received 225 million physical visits in 2015; from residents and local businesses in need of free WiFi, computer access, startup business support, digital skills training, access to meeting spaces and many other services.

During the same period, 96 million visits to websites were made from public libraries. Around 78 per cent (39.3m) of adults in the UK went online every day or almost every day in 2015, with 86 per cent of households having internet access.

As more people surf the net to access information and interact, the convenience and cost efficiency of an online platform may be the best way to deliver crucial support services such as effective business advice.

According to Startup Britain, 342,927 companies were started between January and June 2016. However, research has found that 55 per cent of new businesses fail within the first five years, with 34 per cent of new businesses citing insufficient government support as a barrier to growth.

Digital technologies can offer councils a way to bridge the gap between what they are required to provide against what they can actually deliver, especially when it comes to supporting and encouraging entrepreneurs.

Conservative attitudes to change and risk in the public sector often slow down the adoption of new ideas. However, the only way for LAs to meet the funding challenge is to reform the way in which they deliver public services such as business advice and support.

From 2020, councils will keep 100 per cent of business rates, meaning that it is in their best interests to help new and small business owners survive and develop their businesses now. With the right support, startups and existing SMEs can help create jobs in their communities, resulting in both better outcomes for locals, and lower costs for LAs, i.e. reduced welfare payments.

Research by PricewaterhouseCoopers has found that only 23 per cent of the public agree that their local authority is taking a confident approach to digital, down from 28 per cent in 2015. LAs must act fast to close this growing divide if they are to stay relevant in a digital age.

People who own or have ambitions to start a business, need to receive all the help they require in a timely manner, which can only be successfully delivered online, and on a local level. This way, users can be signposted and linked to other relevant online or offline council and third party offerings, leading to seamless and better connected service provision.

For example, a web-based business advice platform can be set up on library computers and linked to other support services, facilitating access to free business advice to residents, business owners, schools as well as voluntary and community organisations. When integrated onto a local authority website, it can provide users with access to the vital resources and support they need remotely, as and when they need it.

In addition, virtual hubs on these platforms can be used to mobilise the influence, collective intelligence and energy of local people. Digital, combined with more traditional offline methods such as business centres, could foster more collaboration and engagement between individuals and groups, leading to better social outcomes and opportunities for authorities to make significant savings.

A recent report by Nesta argues that digital tools can help councils to reform procurement processes to open up the market to high-growth businesses; provide information, networking and business opportunities to local companies through online platforms; and use data to tailor business support.

It suggests that digital technologies can complement traditional local approaches to economic growth. For example, measures involving taxation, business support, sub-regional governance arrangements like Local Enterprise Partnerships and strategic planning of infrastructure such as housing and transport.

Budding entrepreneurs and SME owners should implore their local authority to invest in digital technologies and make sure that services such as business advice and support are accessible to all, to mitigate the risks of digital exclusion.

Councils must ensure that pathways between different services and mediums are seamless, and that people with varying needs are prioritised appropriately.

Greg Thomas, director at Mi Ventures

Smashing Britain’s digital skills bottleneck: The business questions, risks and solutions.

Image: Shutterstock