Empowering Information Technology to work for SMEs

This is a copy of the speech I gave at the National SME conference held on 28th April in the Grand Committee room, House of Commons.

The theme of the conference was 'SMEs - the force for economic reform' and in the programme the title of the speech was Empowering Information Technology to work for SMEs

It was originally to have been given by a large IT company, but they pulled out on the day.

I took the opportunity to use the influential platform and place the freelancer at the heart of economic reform and argued that they also pointed the way to reform of the political process.

My Lords, Members, ladies and gentlemen, It is a pleasure to be speaking here today. We are all here because we want to make a difference for small business. I got my start 13 years ago with a £100 investment in a small business and today, businesses I am involved in, turn-over £70 million. Small business made a difference to me, my clients and through the taxes I have paid to "UK Ltd", as a previous speaker from HSBC referred to our country.

Three and a half years ago I gave a speech in this very room. I had organised a Green Card lobby of MPs for a group of freelancers - and hopefully after Mark Prisk's speech this morning you are clearer as to what they do and why they are important. The Green Card lobby was for a group of freelancers to come and explain to their elected representatives, the problems facing them from a taxation measure called IR35 before those MPs voted on the measure later that day. We had expected less than 50 to turn up and had booked the small room that we had coffee in earlier on today. When 700 freelancers turned up we took over this room, despite the fact that it was being redecorated, rolled back the carpets and had standing room only. Then I spoke on the need to recognise that we were operating in a very different way than from previously and the rules that were proposed under IR35 did not take account of the way we worked and were like using a "ruler to weigh something".

We are operating in a different way because we operate in a knowledge based economy – recognised by the EU leaders at Lisbon as key to our economic future prosperity.

You can "bash tin" better, faster, cheaper in other countries. First shipbuilding now Dyson ships manufacturing of his vacuum cleaners overseas.

So we all agree we must have a dynamic knowledge based economy – as Lisbon calls for - but to have that we must encourage dynamic knowledge based businesses.

Just as the earlier speaker from HSBC clearly spelt out the debt of gratitude owed by Chancellor Gordon Brown to his predecessor; the last Conservative Chancellor; Ken Clarke, for help in establishing the UK as the best in the world for the Holy Trinity of macro-economic performance: currency, inflation and interest rate stability, so he owes a debt of gratitude for the painful restructuring carried out in the late 70's and early 80's.

As the smokestack industries of shipbuilding, mining, steelworks, car manufacture were exposed to the full force of global competition, ship designers, car designers, mining engineers, chemical engineers, mechanical engineers, electrical designers, electronics experts and latterly information and communications technology experts plus a myriad of other "knowledge workers" "got on their bike" in the words of Norman Tebbit, to find work. Assisted by a flexible labour market and the very early agents who helped tongue tied engineers sell themselves, they formed small companies to trade their knowledge. Many had to move overseas to find work, exposing them to world wide best practice and ensuring the UK retained access to this incredible resource.

Tracing their roots to the great engineers of the past they play to the UK strengths of tenacity, innovation and a can do attitude when solving problems. They wanted nothing more than the freedom to fail and the chance to succeed.

An immensely valuable resource, unique to the UK, they are at present under represented, under valued, under utilised and under threat. As a result UK Ltd is not achieving the full potential we all want.

How do we therefore empower SMEs with technology?

A combination of this resource delivered over the last twenty years and the Internet will enable us to help make a step change in the way our economy works and in so doing compete; better, faster and cheaper than our competitors, the other subsidiaries of Global Plc. India Ltd and China Ltd to name, but two.

The Internet has had a bad press with the dot.com crash, but it is a given that the media will always hype something new such that we over estimate the short term benefits of a new technology and under-estimate the long term benefits.

The Internet is not about buying a book slightly cheaper than before. It is not about buying a last minute offer to fly overseas. It is about sharing information better, faster and cheaper than ever before. Simply put, the Internet for the first time allows us to kill time and space. The telephone killed space in that we did not have to be in the same room together, but the Internet kills time as well. We do not have to be in the same room at the same time. Using simple discussion systems which are being improved daily this conference could be held on line for a fraction of the cost we have all paid to be here and far more people can contribute. Check out www.UKTECH to see it in action.

Which brings us back to knowledge based businesses. They trade in knowledge and the Internet allows them to do that better, faster and cheaper than ever before.

But there is a lot more to come.

We need to recognise that we will never compete with India Ltd or China Ltd on the cost to buy one "man hour" of knowledge work. We need to play to our strengths and their weakness. Our competitors are organised in large, often multi national corporations with high management overhead to make up for the low experience - the overseas competitors resemble the UK companies of old.

We need to strip out overhead and organise ourselves into loose, fast, flexible networks that owe allegiance to getting the job done and not the "company".

That rewards mistakes as proof that we are taking risks.

That removes all management layers and shares all information on the basis that perfect information equals perfect decisions.

And puts "itself" out of business, when the job is done.

I have done this and it works.

In another life I went out and raised the money to design and build a new type of hovercraft. One that was better, faster and cheaper than before. The money came from an enlightened German company. The design was carried out by a team of UK freelancers and the construction was outsourced to a UK shipyard on a fixed price contract. We did not "employ" a single person. I had the chance to benchmark it against a hovercraft designed for the same market and built by a major US defence manufacturer.

We were better by a factor of two. We carried twice the cargo load

We were faster by a factor of two. We built it in half the time

We were cheaper by a factor of three. We built it for a third.

The design went on to win a Millennium Award from Tony Blair and was sold to the Swedish armed forces.

I am applying the lessons learnt with UKTECH. With 35,000 of the top UK freelancers networked via our site I can guarantee that we can help the other 300,000 SMEs represented by many of you today; better, faster and cheaper than ever before. Log on to www.UKTECH to find out more.

Now apply that step change to the public sector budget. Bear in mind I was benchmarking with a commercial company and I reckon the public sector would see an even bigger step change in better, faster and cheaper.

But the challenge is greater with Government. I hear many say that Government does not understand small business. Sounds like an excuse to me. It is our job to sell small business and its importance into Government. We need to get their attention. And in that, we have, up to now, failed.

The small business lobby group represents only 10% of the SME population which means that 9 out of 10 are not represented.

The 1 in 10 are represented by some 700 trade associations operating in a fragmented way, all competing for column inches in the media. And as we know confrontation not consensus, sells column inches. It is why I think the work of the Genesis Initiative is so important and I am supporting the work; financially as a member of the patrons club and by taking an active role; pro-bono, as a main board Director.

The result of this fragmented approach is regulatory measures such as IR35 and now Section 660, which unfortunately you will be hearing about a lot more in the coming months. A measure that will affect some 2.5 million family owned businesses it attacks, through ignorance, the very sector we need to encourage to deliver on commitments set out in Lisbon.

We need to work together to improve this situation and I am helping the All Party Parliamentary Small Business Group, (APPSBG) made up of over 430 MPs to empower the SME community and ensure we carry out the political process, better, faster and cheaper.

We have networked the MPs together and we are carrying out a pilot project to network them directly with their small business constituents and the upcoming Freelancer briefing for the APPSBG will be used for the pilot trial.

Imagine Government asking MPs for the views of their constituents before a measure was introduced. Rather than the current process, which devalues our political system and is open to the abuse of single issue campaign groups that are increasingly soaking up MPs time with organised mail and e-mail send outs?

This will mean that we legislate better, faster and cheaper.

Better; More people involved, More buy in, Less chance of problems after introduced

Faster: Before a public position is drawn and measured in days rather than months

Cheaper. Make less mistakes and less resource to solve problems before they happen

If we can seize the opportunities presented to UK Ltd of an existing flexible knowledge based small business sector, networked efficiently both commercially and politically, then a great prize is within our grasp;

For UK Ltd to be the best not the second best, not nearly as good, but the best performing subsidiary of Global Plc.

To be known throughout the world as setting standards for fair play, decency, tenacity, innovation and a "can do" attitude. To set an example to Europe Ltd that compromise between good and bad leads to mediocre and if Europe Ltd wants to take its place alongside USA Ltd, then changes are badly needed.

And by doing this?

Provide opportunity for all and an economy that is able to support those less fortunate

Thank you