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Government SME Support Programmes Are A 'Waste of Money' - Ulster Business Expert

19 October 2010

Government support programs for small and medium-sized enterprises (SMEs) are a waste of money, failing to produce any demonstrable increase in entrepreneurship or business growth, according to University of Ulster small business expert Professor Ken O’Neill.
Professor O’Neill, who is a world authority on small business development, was speaking at the 36th International Small Business Congress  (ISBC) held this month in Taiwan.
In a hard hitting paper, he said that  - despite there being little evidence of any positive impacts from Government support programmes, the same mechanisms and projects are rolled out again and again:
“Despite the amount of research which has been done (…) and continues to be done, little effective attention has really been given to devising programmes which will actually achieve declared policy objectives. Instead most programmes simply repeat what was done before, albeit sometimes re-packaged to suggest that they are new.”
This ‘me too’ style copying is often justified with the name of ‘best practice’, Professor O'Neill said. 
And he suggested that, at an international and well as a national level, SME business support policies often simply copy each other, without any serious attempt at evaluation.  
Drawing on examples from the UK, Canada and farther afield, Professor O’Neill said:
“Policies largely follow, or are similar to, received ‘best practice’, often because copying best practice seems to be a cheaper and quicker option than actually engaging in the innovative exploration of potential new methods. At least that is a more generous interpretation than suggesting that a scattergun approach based on “let’s be seen to do something (or anything), for that matter” and hope something sticks.”
Professor O’Neill also offers trenchant criticism of the perverse incentives that can inform and propel government SME and business support programmes:
“State bureaucrats wish to be associated with prominent and apparently successful initiatives. This can lead to ‘supply-led’ programmes not based on the real needs of business. It also leads to more resource-intensive programmes, bureaucratic management and control structures, reluctance to undertake robust evaluations or curtail ineffective programmes.”
“What happens is that the declared target is based on what you hit – not what you aimed at,” he said.
Professor O’Neill is available for interview. Contact him via David Young at the University of Ulster Press Office on 07808 911 343
Professor O’Neill’s conference paper is available from