Measures to encourage small business start-ups / entrepreneurship
Today’s SMEs have a strong likelihood to form tomorrow’s MNCs, getting more workers and creating fresh ideas that may benefit other sectors of the economy.
Government encourages enterprising spirit and setting up of new SMEs via policies in hope they will grow and benefit the economy.
Supply side policies benefitting this cause include guaranteed loans for new SMEs; regional help policy for businessmen in less economically successful areas of the country; and advice from experts for these young entrepreneurs.
Capital investment and innovation:
Expenditure on capital goods by firms adds to AD (C+I+G+(X-M)) but also affects aggregate supply in the long run.
Supply side policies on this aspect includes tax relief on R and D and decreased rates of corporate tax
One important SS policy implemented is the establishment of 24 new Enterprise Zones that offer lower tax rates and easier planning policies for SMEs in specific areas backed by a Regional Growth Fund.
Supply side policies for the Labour Market
These SS policies are made to better the quality and quantity of the economy’s labour force.
These policies make the British market more manipulable so that the labour force is able to meet the needs of the bosses in expanding sectors thereby reducing the risk of structural unemployment.
An increase in the number of workers in the labour force increases the productive potential of the economy.
Examples of supply side policies to aid this are :increasing the no. of elderly in the workforce; a relaxed foreign labour policy and increase employment of non working parents..
The UK labour market suffers from many problems E.g. Continually high unemployment rates. Supply side policies for this are designed to better the employment prospects for all workers , .
“The UK faces a 10-year gap in its skills profile and damage to its future economic performance unless it tackles the problem of youth unemployment, business leaders and recruiters have warned. They say that failure to acquire work experience and skills at the outset of their careers will not only damage young people prospects but leave deficiencies in the workforce for decades. The UK has 1.02m jobless 16 to 24-year-olds, or 21.9 per cent of the workforce in that age group – just below the EU”
Quoted
Trade Union Reforms
The power of the trade unions have been greatly reduced. Trade unions are no longer guaranteed protection from arrests, for example.
Better partnerships between trade unions and companies can raise productivity and improving the freedom of workers.
No comments:
Post a Comment