I was on the plane reading the business journal in The Advertiser which is the local paper in South Australia. There was a very insightful article from industry leaders on 10 March 2015 who had come together in a Round-table forum to discuss how to improve the South Australian economy. These leaders are all proven entrepreneurs who run successful businesses that export, are market leaders not just in Australia but have also taken many calculated risks that have led to success and also failure over their journeys.
What was also interesting when reading the article was how they were very critical of government in the manner of providing handouts or making decisions or intervening in industries when the private sector would be better placed. This was particularly noted around government grants, handouts and other funding that went direct to companies that perhaps weren’t the right ones.
It was felt that government is not best placed to make the decision on who to back. Manufacturer Frank Seeley stressed that governments need to be more strategic. He was quoted as saying “Governments have always picked the wrong people; they haven’t picked the people who have got it and are going, they’ve picked the people who are struggling and who are about to come unstuck” he said.
In my opinion, never a truer word has been spoken from a very insightful and successful businessman. It should not be government’s role to pick one company over another and given their lack of business and commercial acumen, it generally means that it becomes a lottery or a bet. Their role should be limited to looking at how they create the right environment for success for businesses. Examples of this include reducing red tape, creating jobs that will survive post one or two big projects, or having a lean public service so that the private sector can step in to areas they are better placed to deliver in, as well as reduce the burden of paying excessive taxes to fund an unsustainable workforce.
Further, they need to build strong relationships with industry to ensure that they get the necessary support to create an environment for business to thrive. This means listening to feedback on what is challenging and what is working and then acting accordingly. These relationships based on mutual trust and shared benefits will mean that industry will step up and drive innovation rather than government delivering a cash injection to a few companies that are a speculative bet at best.
A refreshing article and perspective from industry leaders who had the track record to back up their claims and opinions. I hope government leaders listen to this feedback. I can personally vouch and agree with their opinion given that I have been on both sides, having worked in government and now also run my own businesses. If I had my time again in government, I would have resisted the urge to provide an easy fix by handing out cash and focussed more on what could I have done to make businesses life easier and drive innovation. Sometimes doing nothing or having a stop doing list could be a better solution for government rather than thinking they need a magic potion of ideas or another report that just muddies the water for businesses trying to create jobs.