Once upon a time there were two places separated by a green hill and a deep blue river. Both places made and sold things because that was how the people that lived there were able to feed, clothe and house themselves. They built beautiful places to play in after they made the things they sold. Some people in each of the places made lots of money and, partly to proudly show off and partly to pay back to their community, they built impressive libraries and leafy parks. Then the residents in one place decided they wanted to change.
“We have had enough of this small thinking, small business, ‘many a mickle maks a muckle’ malarkey,” they moaned. “We want to think big and we want to be big. What is the point of having lots of small businesses? We need big. We need impact.”
So they carried out a worldwide search for a great global thinker who could help them become global too. The successful candidate wore an expensive suit and confidently told the people in the place with global ambition: “We can attract big people, big bankers, and big investors to this wee little place.”
“Of course,” he continued authoritatively, “these people will want big fees too – but it will be worth it. They will create lots of jobs for us and the TV and press will get very excited and come with cameras, lights and microphones to talk about us. That never happens to our dull neighbours across the hill.”
The winning candidate proudly announced that the place with global aspiration would identify evidence and metrics that facilitated a pan-economic development community. Nobody really knew what that meant – but it didn’t matter as they were happy that people from other exciting places were going to come into their little place and transform it. The people that were going to come had flashy cars and were winners. Across the hill the other place got worried.
“We are being left behind and are being seen as small and outdated. We need to be like the people over the hill.” But a local accountant asked: “Can we look at the figures here? I like figures because I understand them. We are small and we are a bit outdated but I have noticed that collectively our small businesses are worth a lot to our economy. I have ten clients turning over £50,000 a year, which is actually equivalent to a business worth half a million to the local area. Also, every time one of our local companies spends a pound it goes round and round four times. Thus, I know these businesses are worth £2.5m to our economy. Sadly, nobody talks about them like that. These businesses also give part-time jobs to our young people and many of them buy from each other. This actually makes us secure.
“That’s not very glamorous,” mocked some of the accountant’s clients. “We are off over the hill because that is the future.”
“Over the hill is the future,” boasted the economists and media too. They found it great that they could be doing stories on big glamorous companies. “Big is great for us,” cooed the big accountants, “because we can get one big fee from one source as opposed to going round and round lots of small people for small fees.”
“Big is great for us too,” rejoiced the media moguls, “because we get one story from one place.” So some people left, but the local accountant said: “I like this ‘many a mickle maks a muckle’ approach as it has always made sound economic sense – not that we noticed – and also ‘the times they are a changing’.”
“Silly old fool,” guffawed the people over the hill and valley with global ambition as they partied their way into 2008. By 2009, they were not partying any more.
And the point of this fable?
Well, the combination of the financial collapse of 2008 and the relentless rise of artificial intelligence and the web has created a new economy – or a return to the old economy of our accountant in the fable. An economy where ‘many a mickle’ does not just mak a muckle’… but it is the future.
The UK now has its highest proportion of people working for themselves than ever before. Some have done this by choice, some by accident and some by necessity. Yet this group’s importance to the economy is simply not being acknowledged. Just take a look around at how our media has been discussing the economy over the past few years. Business is big and involves share prices going up and down and the latest news from global corporations. Employment is covered in the same way it was in the 1970s; you are either in employment or out of it.
When it comes to small-business, Mary Portas is wheeled out to save our small shops. Hotels and family businesses are given the same treatment. The message is clear; small is lifestyle and business is big, corporate and serious. There is no small business editor on the BBC or ITV. There is no regular coverage of small businesses on the morning, mid-day or evening news either. This is what I would call ‘missing a market opportunity’. We need to change not just our economic thinking but also the way we cover it. So I would now like to advance a new economic theory: ‘Many a mickle maks a muckle’.
Or, to put it another way, start understanding the importance to the economy of the sole-trader, the family-business, the mum-preneur, the craft-brewer, craft-baker, artisan coffee roaster, jeweller, print-maker, web-designer, and personal-trainer.
As our transatlantic friends might put it “do the math(s)” and let us start by having small business editors on the BBC, ITV and Channel 4. Let us start by totalling the value of small business to the economy, not just because we need to, but because there is going to be a lot more of it.