More capacity building needed for regional businesses

By Rob O'Brien
It is a collaboration between local government and private enterprise that could be a model for small business development across Australia.

Yet one of the directors of a drive to bring expertise to regional businesses is adamant about one thing – governments have failed the small end of town.

Launched in 2007 through Port Macquarie-Hastings Council the program, Economic Gardeners, is giving hope to regional businesses staring into a deep recession.

“Governments have been shy about working with business and what we’re not doing is recognising where the future lies in terms of entrepreneurial small businesses,” said the director of Economic Gardeners and specialist in rural development, Roy Powell.

“We’ve been spending millions of dollars on old industries like the auto industry and nothing is going to the small end.”

Economic Gardeners is a business development program focused on establishing entrepreneurial skills and refining management tools available to large companies; in effect creating an “economic gardening” approach in regional Australia.

The program evolved in the US in the 1990s based on the recognition that most of the growth in regional economies was driven by entrepreneurs operating small businesses.

The approach has been pioneered in Australia in collaboration with the Port Macquarie-Hastings Council, which funds set-up costs while participating businesses pay fees to attend. Workshops include individual sessions to build planning and operating capacity.

“Governments don’t create wealth, businesses creates wealth,” Dr Powell said. “There’s a lot of money going into local economic programs, but hardly any of it is finishing up helping small businesses.

“We have not been investing in building the capacity of these people to run businesses. They don’t need subsidies … they need networking help and they need some basic skills about how to set up their business properly and run it and periodically review their progress, to interpret the numbers and make a management response. Most small businesses don’t have that capacity.”

Dr Powell said the Federal Government’s 2003 Keniry report highlighted shortcomings in the support offered to regional businesses in Australia, but subsequent governments had failed to enact its recommendations.

“What these regions need is access to technology and information but the NSW Government is closing down all the agricultural research stations,” he said.

“That kind of research capacity is essential if you’re going to create an innovative edge to your agriculture. Shutting down research facilities is not going to help.

“These communities don’t have ready access to the knowledge of technical capacities that the cities do. It’s always a big struggle.”

The Economic Gardeners program has been running for two years. Dr Powell said that the program had enhanced local businesses but it was still too early to document the initiative’s success.

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