Tuesday, July 25, 2006


Is education an impediment or an incentive for business success?

Recently, a colleague and I attended an important meeting to discuss Social Policy, Education and Economic Competitiveness. Politicians, professionals and community leaders were among the many who discussed these themes in some detail, demonstrating various interpretations and understanding of each theme. The Economic Competitiveness discussion involved mainstream business organisations from the `Old Boys Network’ whose ideas on this subject were located in early 20th century context. Ideas were vague, irrelevant and antiquated. Many of us questioned, who are these people? Which planet are they from? Are they living in the real (business) world?

Even more startling, was this comment from an elderly gentleman representing a regional business council,” You don’t need an education to run a business, just look at Bill Gates and (Sir) Richard Branson, they made by just applying themselves to an idea.” Contrast this with another view on the support to would-be (small) business owners, this is what `our friend’ said, “Many of the cases that come before us do not demonstrate sufficient business experience, these people usually have hairy-fairy ideas but they don’t know how to make it work.” What a blatant contradiction; one the one hand, the argument favoured Gates and Branson never mind their limited educational attainment. One the other hand, when it came to supposed `minorities’ there was a dilemma. How could one therefore suggest that education is not important in a highly sophisticated and technologically-driven world?

The fact that both Gates and Branson are engaged in vastly competitive industries, mean that a high level of administrative, managerial, technical and other sub-set of skills are required to make their companies viable. Even if both men lacked the necessary academic credentials in information technology and travel logistics - they have a core of specialists and practitioners who operate their companies, proof of which has been the millions both Microsoft and Virgin have generated over the past 10 or so years, along with the huge influence they wield in political and other circles, worldwide.

So, why is education important to business sustenance? Is it really needed to balance the books? It was once said that business is about 99% perspiration (meaning effort) and 1% inspiration (meaning ideas or brain power). It seems that `any way you slice it’, education is a necessity. In the case of a technology firm, knowledge of software programming, hardware processes and applications are all vital. Then there is the issue of managing technical resources and people, especially human behaviour and general attitudes to work. Money management is critical and any business owner knows that you cannot hire personnel without accounting and financial qualifications, as well as experience. The business also needs a qualified legal functionary to deal with regulatory and allied official issues that may affect the firm – directly or indirectly. Can personnel without education, function effectively in these important position of a firm, as mentioned above? Of course not!

What about a travel company? You need specialists in management, administration, marketing, corporate responsibility and other fields. Having extensive knowledge of the travel and tourism market is very crucial to market positioning. In every business sector, high-order skills are necessary to compete and stay in `contention’.

Unlike let’s say 30 years ago, more than 60% of all blue chip companies today have a cadre of well-equipped top brass and middle management staff too, followed by a lower tier of technically competent employees. Companies such as Marks & Spencer, Tesco, Easy Jet and co, can ill-afford to ignore the importance and relevance of well-trained staff. Education plays a vital part in business expansion. The product and services portfolio of businesses, coupled with their market share position, could be affected if staff do not have the requisite communication, strategic, managerial and technological skills to `meander their way’ in the market place of ideas and products. If the business is going international, language, diplomatic and other cognitive skills may be required. Without these essential skills, few firms can survive long enough, even if they are riding on the back of `Sir Fortune’ or `Lady Luck’.

Research shows that minority firm owners in Britain, Europe and North America are likely to have more qualified professionals running successful businesses than average mainstream firms. Education is a high premium for minorities; they recognise its (status) value in global terms. They recognise its impact on their firms’ standing in the marketplace. Customers usually have a positive attitude towards well-managed companies; they feel confident and are willing to trust guarantees of quality goods and services from companies that have highly motivated, customer-oriented and highly trained staff. Some are even willing to invest in shares depending on the stock market position of the particular firm.

In Britain, 25% of all entrepreneurs between the ages of 25 to 30 are qualified to Degree level and just fewer than 5% are qualified beyond First Degree, added to accreditation from professional bodies representing sectors as diverse as legal, financial, technology, health, consultancy etc.

Consequently, the `learning firm’ principle is applicable to the modern state of business affairs. Owners and senior managers should therefore, encourage employee development programs so that staff can improve their all-round professionalism. Firms that have employees with high levels of competencies in experience and skill mix are in a stronger position to increase profitability, customer base and enjoy a corresponding rise in market share. In short, education can make a real difference between the (future) success and failure of a business in the 21st century.



(By Dr. C A. Johnson and C.A. Cole, MSc, Cole Consulting UK)

1. Introduction

1. 1. This submission follows the Conservative Party’s policy meeting in the Midland Counties, Friday, 14th July 2006 to address the critical issues of Social Policy, Education and Economic Competitiveness. We believe that policy making is not for the fainthearted or weak, but it is for those who are interested in making a genuine difference to British society by adopting a progressive agenda based on ensuring that all citizens are actively involved in participatory and representative forms of democratic activities – be they educational, economic, political, cultural, social, environmental and or technological in nature.

1. 2. This submission is also premised on our informed and guided involvement in public, private and community-governed agencies and organisations over the past decade. Very few minorities- professionals, lay people and their communities, are involved in policy-making at the conceptualization stage – here is where information gathering and data collection are especially vital and if this process is flawed, it can affect the policy making process, as well as the way policies are delivered and their corresponding impact on British society.

1. 3. Our position on the issues discussed is also based on the incisive knowledge we have of the BME community and the respect we have for British traditions of justice, fairplay and tolerance. Ultimately, this submission is evidence of a desire to help concretize social policy initiatives, by strengthening their structural framework, enhancing the body of information and data and enabling the process to be facilitated through active engagement with businesses and social enterprise providers in the community. It is hoped that this short submission will go a far way towards renewing minority communities’ confidence and faith in the political system and its overall determination to reposition Britain in the global market of ideas, goods and services, and where every person is respected and treated not for their colour or creed, but by `the content of their character’. In short, a system based on meritocracy renewal.

2. Social Policy

2. 1. In generalizing this area of societal focus, we believe that the symptoms around family breakdown, delinquency, lawlessness and social decay are attributed to the following: -

a) Deferential attitudes towards public authority by all.
b) Lack of parental control over children.
c) Young children given power over parents.
d) Blurring confusion between democracy and social excesses.
e) Quangos lack of accountability on social governance issues.
f) Racial prejudice and forms of discrimination – overt and covert.

2. 2. Family breakdowns are symptomatic of wider problems involving disrespect for authority by adults and children which result in the lack of parental control and the need to encourage or pacify indiscipline among school-teenagers (especially) for fear of losing their love or fear of children reporting `incidences involving discipline’ by parents to Social Services.

2. 3. In addition, the gradual erosion of moral and spiritual values has had a negative impact on kinship and general social responsibility on the part of parents and children. Parents need to feel that they can discipline their children within moral and legal framework (relevancies). They must be encouraged to teach children about the principle of `Reward and Punishment’ so that they can inculcate proper attitudes to both their private and public life. Other steps should be taken to bring about greater family unity and social cohesion among diverse communities; they include: -

a) The State should encourage children to bond more with parents until their 18 so that they can `learn the ropes’ of adolescence and gradual adulthood better.

b) Able-bodied youths should be encouraged to work after leaving school or have access to education and training sessions rather than accessing benefits – this makes it too easy for young people and they become attached to welfarism as an alternative to seeking employment.

c) Rather than the current system of penalties, a professional mediation service should be introduced, backed by robust legislation to encourage separated or divorced parents to support young and vulnerable children affected by the dissolution of marriage. Children are entitled to love and care from both parents and no parent is more important than the other. The current arrangement has left many children suffering at the expense of a system that chastises fathers for `losing their way’.

d) Better use of community resources is needed to support efforts at family mediation. Children who suffer in marriage breakdowns rebel or project their pent-up emotions in various ways – bullying, anti-social behaviour in the community or self-harm.

3. Education

3. 1. In the immediate post-war period, literacy rates were quite high in Britain – an excess of 90%, but today there is a reverse, with 7 million Britons deemed functionally literature, with a high proportion in public and private sector agencies. The consistent pattern of underachievement among Caribbean boys in mainstream education, the underperformance of firms and the poor level of customer services, could all be attributed to falling standards in society, including lowering standards of education.

3. 2. What is more, very few citizens today know British history or for that matter, geography – science subjects are no longer attractive and the country is losing about 200,000 of its best brains (including scientists) each year to Australia, New Zealand and North America. The increase in multi-media technology, such as in the internet has not really impacted on the quality of education and training. In the early 20th century, the late Mahatma Gandhi warned that technology can in fact `displace human initiative’ if humans do not get their act together, and it seems that his prophetic words have borne fruit in the 21st century.

3. 3. Anecdotal evidence suggests that the average office worker have difficulty in interpreting or carrying out basic administrative instructions; office etiquette is poor these days and discipline in the work environment is at an all time low. Functional authority hardly figures these days in traditional work settings and loyalty is in dispute. The Confderation of Business and industry and the Trades Union Congress have spoke out repeatedly about the critical skills shortage in the country and although a National Skills Commission was set up and some admirable work was done, most Learning and Skills Councils (LSCs) are unable to meet the targets in dealing with narrowing the skills gap. Far too much effort is spent on bureaucracy rather than solving problems at the `bottom-end’ of the social scale.

3. 4. As participants attending the focus meeting said, LSCs usually don’t have accurate or updated figures of the skills shortages in the labour market and officials have little grassroots knowledge of the communities they operate in. There is a current mismatch between the types of training programs on offer vis-à-vis the needs of the job market. The training sector is opaque, inward-looking and is monopolized by the `Old Boys Network’ syndrome.

3. 5. There is a plethora of minority contract providers languishing in the community, surviving on paltry contracts and are quite capable in delivering a Community Participatory Approach-type education and learning initiatives. They need to be trusted and they will deliver, according to our evidence `on the ground’. The following actions can therefore go a far way to address the critical issues around education and training deficits; they include: -

a) A thorough review of the skills needs of British society by ethnicity, by sector – attention should be paid to deprived communities and rural areas where resources are in short supply.

b) LSCs should be reviewed to look at issues around performance outputs; for instance, has contract delivery impacted on employment in what areas, how many businesses started in particular areas, what are the customers like? What about soft-skills such as personal development, communication skills, negotiation skills and financial literacy etc.

c) A review of sub-contracting arrangements to determine providers , gaps in delivery, how gaps could be plugged, the use of smaller independent consultants in the community to lead in monitoring outputs especially in minority communities where the knowledge of these communities are poor. Small sub-contracts could be assessed to determine value for money; a 2% -5% of all LSCS budget should be allocated to subcontracting involving independent consultants in the community that have the expertise, experience and contacts.

d) Provide funding to organizations that provide alternative educational services or provision such as supplementary schools, community schools etc.

e) Set up a booster fund for minority providers to develop their organizational capacities; monitor their performance annually and test their output measures.

f) Broaden the National Youth Enterprise Scheme to include minorities from deprived areas of the country. Combine academic, vocational, technical with technology skills-based programs. Reward young people with placements at reputable organizations and companies. Offer them assignments perhaps being responsible for a project that involves teamwork.

4. Economic Competitiveness

4. 1. Recent official figures show that despite the growth in the British economy, the country’s competitive standing is being undermined by underinvestment in research and development, underperforming firms, poor skills and under-funded business support provision even though they are `claims’ of large pots of money for business start-ups and existing firm operations.

4. 2. The British SME sector boasts more than 3 millions businesses, with more than 10% comprising minority firms that contribute a total of £32 billion to the Treasury. Most of these businesses operate on a self-sufficiency basis with little or no support from mainstream agencies. Evidence suggests that only about 7% of all minority firms in Britain have access to enterprise support provision. Much of the support is around signposting, form-filling and providing information that is too limited to act upon, in the case of start-ups. This situation is prevalent in both business link-type agencies and community finance initiative –organizations set up to provide all-round support for entrepreneurs in inner-cities and other deprived areas.

4. 3. After the civil disturbances in the 1980s in Handsworth, Brixton, Liverpool and other inner-cities, the Scarman Report recommended that action should be taken to empower minority communities to avoid future conflict. The Conservative Government implemented the enterprise development agency system which bore fruit. In one particular agency in London, thousands of firms were set up during 1980s and 1990s. About 25% -30% of these businesses are still going and have grown. The demise of these agencies has given rise to new ones in the form of Business Link and other mainstream-type concerns. Majority advisers operate from a manufacturing position of enterprise support and are clearly not `up to speed’ with the modern services sector. Very few understand the cultural sensitivity of minorities and very few also understand the value of key sectors and segments of the business economy in local and regional localities.

4. 4. Since the late 1970s and early 1980s, a series of exhaustive studies have been done on minority firms – issues tend to be around immigration, welfare, discrimination, with little attention being paid to the sectoral performance and organizational capabilities of owners and managers. Very little details have emerged on the impact in quantifiable terms, these firms have made to both local and regional economies in the UK.

4. 5. We believe that the Regional Development Agency system is one of the most laudable and viable initiatives implemented to offer citizens a greater say in participatory and representative democratic endeavours, but this single policy direction is not sufficient. There is still a divisive tendency to play mainstream (local authority officials) agencies against minority communities keen on participating in regeneration activities particularly in areas where poverty is high, educational attainment is low, unemployment is rife and where firms are underperforming (far below potential expectations) or by industry standards. Tackling this complex situation will take time, but we feel urgent action is needed in the form of the following: -

a) A complete overhaul of the enterprise support system to determine whether it is really `fit for purpose’ –value for money etc.

b) The alternative is to infuse new capacity and expertise `blood’ in agencies.

c) Insist that agencies have an annual Impact Assessment Measurement (IAM) to determine how effective advisers have been; what is their effect on start-ups (by numbers, by sectors and sub-sectors etc); the turnover impact advisers have had on firms; the level of employment growth reflected in the type of advice given (by gender, ethnicity, in what locality etc). The impact firms have on local areas in terms of poverty level, new knowledge and technology bases, the number of young people benefiting etc.

d) Central economic policy should consider sub-policies in neighbourhoods, wards, districts, sub-regions and regions. Evidence should be obtained from a rafter of businesses, agencies, organizations, groups and private individuals who have ranging expertise on matters such as crime, education, culture, economic affairs, business, women and youth welfare, leisure etc.

e) RDAs in collaboration with mainstream organizations, should allocate a portion of public funds to resource local business associations and social networks since these groupings have an added value to economic, cultural and social regeneration impacts.

f) Practical procurement schemes such as CRÈME Initiative at DeMontfort University should be encouraged. A concerted effort must be made by RDAs or their intermediaries or alternative bodies, to assess the competitive value of minority firms and evaluate routinely their capacity and capability to access and deliver contracts – small, medium to large. Practical sessions linking minority firms with mainstream companies can help small firms to come to terms with the real world of business. There are fine examples of this working in the northern part of England.

5. Conclusion

5. 1. The principal aims of this position paper are to provide the following:

a) Identify a variety of problem-solving areas under the Social Policy, Education and Economic Competitiveness realm of thinking by the British Establishment.

b) Provide anecdotal evidence on the complex nature of the challenges at hand.

c) Offer personal (experienced) insights into the enormity of the problem in all three key areas in the British economy; and

d) Illustrate the importance of viable partnerships involving public, private sector, and civic organizations, in an effort to achieve local, regional and national (global) targets as set out in the Conservative Party’s reform agenda.

5. 2. We hope that these suggestions will form the basis of integral policy-making and that the expertise demonstrated in this response will be used proficiently to influence policy outcome in the diverse communities which make Britain’s rich and valued multiculturalism, both a pride and an envy its (puzzled) detractors.

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