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From Out of the Vault
By Bill Schweke on 04/25/2011 @ 12:45 PM
From Out of the Vault: Ideas for Improving Service Delivery to Entrepreneurs that Still Seem Worth a Try
Like most economic development professionals, my metric of success is more akin to a decent baseball batting average than a respectable field goal completion record in basketball. This might just reflect my incompetence, but, based on my assessments of other consultants’ efforts, comparisons do not seem to encourage me to head to the nearest minister or mental health professional and confess my sins and career doubts.
Fortunately for me, reforms and other changes come slowly to this field and many old ideas still have legs. Indeed, many have not even been tried yet, despite sustained advocacy. And, the gap between promise and performance is still large, even in the somewhat novel areas, such as entrepreneurship and social capital investments, small business and microenterprise development. These shortfalls are increasingly being blamed not just on the usual culprit – the level of funding – but instead on the nature of today’s “public technologies.”
During our lifetime, the way government typically has responded to business development needs is by creating a “program.” Rules are written, eligibility requirements established, budgets approved and departments created to administer them. But after that, programs are left alone to fix any problem. There is seldom a mechanism for customer feedback, there are too few incentives for producing quality services, there are insufficient rewards for employees who respond quickly and creatively to small business needs and there is rarely a simple way to shut down programs that are no longer needed. The result often is an inflexible bureaucracy. Traditional bureaucracies perform well in delivering standardized programs that change slowly, if at all, and need to be isolated to some degree from the demands of clients. This is, however, the kind of organizational system least likely to perform well in a rapidly changing world.
We need to move beyond this program-by-program approach where we are still hindered by limited impact (many still are under-served), where we lack scale, where we do not customize services or respond well to changing conditions, where agency and program fragmentation creates turf and confusion, where programs take on a life of their own and so on.
Here are some not-so-old ideas that are worth, in my view, piloting in some states or regions. Although none of them strike me as certain to succeed, some have features that are designed to leverage other resources and programs, others try to create a market and customers for a particular product or service, and some foster feedback loops for improving performance.
- Management assistance vouchers: providing small sliding scale subsidies for firms (three years older or older) to hire technical assistance from the private sector.
- Startup ombudsperson: counseling individuals on the nuts-and-bolts of opening businesses. (Financing would be partially fee-based)
- Expeditor: designating within a region a single point of contact, referral and source of service integration for firms with 20 to 100 employees and need some help in avoiding shutdown.
- Succession planning and service: Creating outreach, education and transition services to help older businessowners with no realistic opportunity to pass on their firm or find an owner or manager to take charge and avoid closing. This service center could be located in a university family business office and be self-supporting by tapping private contributions, foundation grants, fundraisers and fees.
- Service delivery as an enterprise: Restructuring at least one small business assistance center in each region to serve as the “hub” center and oversee the performance of technical assistance contracts/operations/organizations within their region. The hub and network of local providers would each possess “business plans” for guiding their management. Each may even be organized around a different particular market niche.
- IDAs and Children’s Accounts as seed monies: Providing seed capital to very small firms via a conventional RLF/venture capital structure rarely works – the administration, transactions and information costs are too high, as are the risks. A better way to go is just to give them seed capital through an innovative savings account arrangement.
- Tax prep plus: Using tax preparation time to reach out to tens of thousands of low-income self employed persons that are getting help to file for EITC is an ideal way to give them modest levels of TA and referrals to other, more intensive, forms of management advice and coaching.
- Learning network: Bringing together new channels of communication, not just for purposes of gathering intelligence or making referrals, but for teaching, discovery, continuous improvement, R&D and better access to the range of TA available in a region.
- Re-engineering service delivery: Making services for firms more seamless and accessible is a good way to make service integration happen and apply a useful private management strategy.
- Innovative business retention and expansion programs: Combining computer technology, new software and business visitation procedures can help keep industries and firms healthy and competitive. The effort should apply a consistent professional survey and analysis software to all R and E visits, thereby creating a rich data base for assessing the health of a given firm or area.
These proposals go beyond the most commonly proposed options for dealing with government inefficiencies and program fragmentation problems – coordination strategies and improved evaluation processes.
But, I admit, that my suggestions do not utterly solve the big challenges discussed earlier. They show promise and potential. Sometimes, this is the best we can do.
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