European Economy Series Part 2: Supporting Innovation and a Diverse Education Policy

Supporting Innovation

          It is a well known fact within the business community that SME's (Small and Medium Size Enterprises) create the bulk of employment opportunities across Europe. As such, in order to foster economic growth and bring down Europe's unemployment figures, we need a culture that allows for the easy start up and growth of such SME's and new enterprises.

          This includes having a simpler tax and regulatory system that encourages private investment and job creation at both the SME and larger corporate levels. This investment should focus on the research and development of new ideas and products and then bringing these new products to market. This research should see private enterprise collaborate with public entities, educational institutions and each other to help design and develop such new products and help develop the skills required for long term economic growth.

          Simplification of the tax and regulatory systems should focus on reducing the financial burden and work load on business, especially for SME's. This includes reducing the bureaucratic burden in relation to tax returns and increasing the use of online submission forms to save time and reduce postage costs. Although I agree that the banking and payday loan industries require increased regulation after the financial crises, regulation for general business should be minimized if and where possible. Although I still believe that equal opportunities and health and safety standards should be maintained, regulations such as the working time directive and planning laws should be made as flexible as feasible.

          Furthermore, we should help facilitate collaboration and cooperation between business to boost trade and increase investment. This doesn't necessarily have to take the form of direct government investment, but may include organising forums for business leaders and entrepreneurs to meet and network. It may also include the strategic use of the governments day to day expenditure and focus it on areas where it will benefit the economy most. In addition, government should make use of advice portals such as Business Link to provide on-going advice and guidance to new start up enterprises.

A Diverse Education Policy

           To ensure long term economic growth, we must also ensure we have the skilled workforce to fulfil the jobs future economic growth will provide. As such, we need a diverse and well funded education system. This not only includes a university system with easy access, but also well respected practical training programmes such as apprenticeships that are often wrongly seen as second rate. The German system for example has encouraged the take up of practical apprenticeship schemes and they are now considered on a par with university degrees as they should be. This respect, if exported to the rest of Europe, will contribute towards solving Europe's skills shortage and help create sustainable long term growth and competitiveness.

          This increase in apprenticeships should be encouraged by government and paid for by private companies. In terms of encouraging apprenticeship programmes in the UK, government can and should offer tax breaks in relation to associated VAT payable and national insurance contributions. This should be coupled by investment in further and higher educational colleges and other such training providers. This could be further encouraged by directing operating government expenditure to the firms with the largest take up of apprentices. Furthermore, these apprenticeship schemes should be seen as a long term investment by firms and they'd be wise to take them up and invest in their future work force.