Small, Social Enterprises Could Be Key to Recovery; the Wednesday Essay with the Economy Changing Daily and Companies of All Sizes Making Redundancies, People of Wales Face Challenging Times. Phil Silverthorne, of Training Providers A4e Wales, Gives His View on How to Revitalise Our Economy
Byline: Phil Silverthorne
THE challenges the Welsh economy faced in the recession of the 1990s are once again rearing their ugly heads. We are seeing job cuts announced almost daily and some of our largest, most established businesses are in administration.
The big question is, what do we do to get ourselves out of the recession and kick start the economy?
The redundancies are causing unemployment to surge at an alarming rate. Unemployment in Wales rose by 24,000 to 95,000 in the last quarter. Recent statistics also show 1.82 million people are out of work, an increase of 140,000 from the previous quarter.
It is the highest figure since the end of 1997. However, things were different then. There were larger redundancy packages paid out to employees who often had more than 20 or 30 years' service.
The "job for life" situation has long gone, so today's redundancy payments reflect shorter service and the new law only forces an employer to pay a week's salary for every year of service.
Larger redundancy payouts in the '90s meant those made redundant had more options, and this is what really gave the Welsh economy a much-needed kick start in the late 1990s. People spent their redundancy money on things like home improvements, better cars and household goods.
Also, more people set about spotting niches in the market place, starting their own companies. This came when big companies in Wales were still making job losses, but this increase in new small and medium enterprises (SMEs) fuelled growth in the economy for the first time in years.
This recession is different because people simply don't have the redundancy pay-outs as financial support or backing to go it alone, so they therefore need more help via funding. This is where a new strategic direction from the Assembly Government will help inject life into Welsh SMEs.
People need to identify key new areas where they can add value to the Welsh economy - this is where social enterprises and co-operatives are able to stand out.
In France, social enterprise is a key growth area. Many commercial businesses would consider themselves to have social objectives but social enterprises are distinctive because their social or environmental purpose is central to what they do. …