Go to China, USA or Nigeria. One of the few microeconomic facts that can be found everywhere is that small businesses comprise around 95% of economic activity.

Here’s another common detail. Many governments want to help these enterprises. Politicians love to be seen cuddling up to local successes. But the truth is often a very different picture. Bureaucracy and officialdom often culminate in a bank of goodwill that cannot be converted in to practical help.

Hardly surprising. Public authorities work well when they can wrap the challenge into a neat box to fit large communities. Apart from their name, small businesses are not a compact group. They work from home or not. They distribute, manufacture, compute, or not. They are internally dynamic, or not.

In Israel, the government has recently announced a package of help for small commercial operations. Lots of goodies for companies, who have spent 12 months weathering the global recession on their own. Those who have survived are now near independent.

It was a similar story after the war with Lebanon 3 years ago. Although much help was promised to local firms in the north, it took far too long to come through. The true beneficiaries in the short term were the sellers of A4 sheets of paper to government offices.

If that was not bad enough, I recently attended a lecture by Nitzan Ehrlich, the CEO of Aviv. Specialising in helping small companies find financing, he noted that the country is full of public and private funds for struggling businesses, but few people know about them. Absurdly, he noted that some in the relevant ministries do not even know how to start the application procedures.

It is time to give some genuine attention to this sector, which tends to hide a rich wealth of entrepreneurial talent.

1 comments

  1. Hi Michael,

    I just found this blog. I’m a big fan of small business. I’m in the land of Oz at the moment.

    What you wrote in this post, is,of course, an invitation for any micro-entrepeneur to give lessons in application procedures and/or write a book/DVD/website on how to do so. 😉
    presumably lessons in how to cope with/pacify Israeli bureaucrats would be part of the tutorials.

    Cheers 🙂

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