6.9 The role of the private sector
While some of the ventures in this study are themselves part of the private sector, others could be described as being part of the informal community sector which often seeks to meet social and cultural needs as well as economic necessities. One of the ways in which successful businesses and individuals in the private sector can assist community development, apart from providing employment, is to share their business expertise. Although this could be viewed as a threat to their own business profitability, it would be some time (if ever) before many of the grassroots small businesses and community development projects became significant competition to bigger, successful enterprises.
The sharing of business and technological knowledge with those seeking to become less dependent on the State could help build the "enterprise society" being advocated for New Zealand. The benefits to private sector businesses of community development will be communities with less apathy and more spending power. The advantage of including grassroots activities in the spectrum of community development initiatives is that it can introduce more opportunities for upskilling the labour pool, promote business survival skills, reduce dependence on State benefits, reduce alienation between the 'haves' and the 'have-nots'. It also has the potential to reduce resort to the 'black economy' and criminal activities. This would have obvious benefits for economic and social progress in the long-term.
A criticism by grassroots business people was the lack of accountability of professionals, particularly those involved in providing financial advice:
"Some professionals despise small business people. What they fail to remember is that they are specialists in one area, like accounting. A small businessman who is generally trained in his trade has to learn business skills to be successful. Professionals fail to communicate and treat us as mental deficients. As a business we have to have a public liability insurance in case we make a mistake or cause damage. Why isn't the professional carrying a similar responsibility? The customer has no redress. The people that have cost us the most money have been the professionals yet in all our years [in business] we only struck one bank manager who tried to help."
However, respondents' bad experiences with professional advisers encountered in our first study appeared to be fewer in the follow-up study, and a few individual accountants were going out of their way to provide accessible and modestly-priced advice to grassroots people.
Practical ways in which the businesses and individuals can assist community development initiatives are by providing business mentors, by providing training opportunities, or by providing paid secondment of staff to enterprise agencies or iwi runanga, if requested. A secondment, given the appropriate person, has the potential for two-way learning, especially for young employees whose education has been largely academic. Another approach could be the secondment of people in grassroots enterprises into the private sector as a means of upgrading their skills and experience. Monitoring is often done informally but can be carried out on a more organised basis through Business in the Community (BIC). Launched in December 1991, this organisation aims to encourage successful companies to promote and support new and struggling businesses. The mentor scheme helps organisations set up mentor programmes whereby retired, semi-retired and current business people work with new business people (Employment Matters, Vol 3' January 1992). As recommended in our last report, it is still vital that mentors and clients are appropriately matched, particularly for women and Maori setting up in business. Apart from the occasional supportive accountant and enterprise agency staff, there was little evidence of business mentoring at the grassroots level in the two study areas. One or two small businesses reported that they were starting to gain the support of local business people, for example the stationery retailer, but more reported hostility and "small mindedness". An example was a mobile barbeque business which was adding colour to a main street and running at a profit. Local retailers had complained about the competition and the smell of the food cooking. As a result, the owners had to move from their location to a peripheral site away from the main flow of pedestrian traffic. Although they were operating the business within the conditions of their licence, in the end, they said, it was a matter of how much "pull" one had in local business and decision-making circles.
Another important role for the private sector in community development is social responsibility in business. Such involvement can provide a good public image for a company. Many grassroots people, both the unemployed and those looking for alternative or complementary approaches to the economy, are concerned about cases of dubious business and political ethics and the exploitation of people and the environment. Mcdonald (The Employment Catalyst, Vol1, December 1991) discusses issues of social responsibility in business:
"Even in these hard economic times any business has to be judged in broader terms than simple profitability and survival. Business is a social activity and as such brings with it a need for social responsibility. As the present government expands the power of business in this country the need for high ethical standards in the business correspondingly increases."
Mcdonald suggests there are four main factors in the consideration of what is ethically responsible:
- the relationship between a business and its customers;
- the relationship between a business and its employees;
- the relationship between a business and the physical environment;
- the relationship between a business and the larger community within which it operates.
His conclusion is particularly relevant for community development:
"The government has asked us to place great faith in the responsibility of business and has facilitated its functioning in order that it contribute to a better and more decent society. Every business person that neglects to foster fair and reasonable relationships between itself and its customers and employees and the physical and social environment which allows it to operate, denies that faith and works against that goal."
The impact of the economic recession has meant that grassroots people have had to focus on sheer survival before they can move into community development initiatives. Increased social stresses in communities resulting from unemployment, poverty, and health and family problems make self-help initiatives and community development even more of a challenge. In addition, the impact of devolution of former state responsibilities to "the community", with insufficient resources to do the job, has placed a great burden on voluntary services and caregivers. It has also increased economic and social reliance on unpaid work.
The current ideological emphasis on individualism is very dislocating for those who prefer to work collectively for the good of the group and those who believe that society still has a collective responsibility for its most disadvantaged members. As many of the case studies have illustrated, grassroots enterprises often have a conflict of values between operating as a group initiative for the collective good, or as a private business for the individual good.
Hekia Parata (1990) has outlined her vision for New Zealand which goes beyond the pursuit of individual gain:
"The distribution of income and wealth will be leavened by the predominant influence of collective well-being rather than the pursuit of individual gain. Equity and equality will be achievable through thinking of self as part of the whole and not as self competing with the whole. Competition and excellence will be integral to improved standards of living - but the benefits will be shared."
Reliance on the state will have diminished significantly, replaced instead with self-reliance where 'self' is defined in the collective context. The enormous, largely unregenerative expenditure by the state through the payment of benefits will have been replaced by productive use of taxes in venture capital for small business and enterprise development." (Hekia Parata, New Zealand Women Looking Forward From the 1990 's, 1990.)
People working at the grassroots level are often dismissed as not being entrepreneurial in the conventional business sense. However; they are frequently enterprising in their attempts to become financially independent and contribute to community development. Although the positive initiatives recorded in this report might seem small in the total scheme of things, they are symbolic for those working against great odds to become independent and contribute to their communities. They are one piece of the jigsaw of economic development. To ensure that all New Zealanders have the opportunity to contribute to our economic, social and cultural development, government support for an "enterprise culture" should include grassroots community development initiatives. Policies and services which help the most disadvantaged groups (in terms of income and employment) to help themselves will have a long-term payoff in reducing alienation, crime and black economy activities.
Overarching issues
It is recommended that policy makers:
- ensure that resources are available for programmes that enable the most disadvantaged groups to help themselves.
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