Our economy, wallets, and jobs rely on Community Wealth Building

Early this year, at a roundtable hosted by a large Financial Services organisation, their chief executive of Business Banking challenged us with the question, “How can large organisations support smaller businesses?” After listening to the lively discussion, I suggested that the most impactful thing a large organisation can do to support a small business is taking them seriously enough when sourcing goods and services.

What is Community Wealth Building?

Community Wealth Building (CWB) is an approach to economic development adopted by the Scottish Government to help transform a country or local community by generating, circulating, and retaining wealth within its economy. In recent years, there has been a number of initiatives to build community wealth including Levelling Up which aims to improve jobs, pay, and increase investment in high streets.

Preston Council also embraced Community Wealth Building to harness the power of wealth that already exists within large public organisations. However, SMEs make up 99% of the UK economy and last year only 6.4% of government spending, when procuring goods and services, went to small businesses. I believe the UK Government should go a step further on a national scale, and set the example that SMEs are trusted business partners for large UK organisations. This will improve economic stability and social wellbeing, and have a positive impact on the environment.

Existing examples of CWB in the UK

As a professional working within the booming UK tech sector, it’s clear that we are already privileged as an industry. Many organisations and government initiatives, like CodeBase and their Techscaler contract or Barclays Eagle Labs and their Digital Growth Grant contract, are funded with the aim of building a network of successful tech founders, by providing them with well-crafted resources and programmes. A great addition to this initiative would be a framework that supports symbiotic relationships between large and small organisations which take into account both risk and commercial reward.

You may be wondering, then, why large organisations aren’t working with more small businesses if the benefits are so undeniable. The answer is largely down to perceptions. What do you think when you hear the phrase, ‘shop local’? I think of a farm on a country road, with a little sign advertising fresh organic eggs. Or, a small eccentric shop front, or the family-run cafe that you walk past, and would miss if it shut down. Even if ‘shop local’ is changed into a larger plan for economic prosperity, rather than a simple way for a person to shop, there are still four perceptions that complicate it.

What can be done to support CWB?

First, the term ‘local’ can be perceived as discriminative and anti-competitive. Single market principles protect against companies and individuals only doing business with local companies. Second, there’s a perception that inclusion of community benefits and social value within the procurement process increases costs. Third, there’s the perception that small companies don’t have the knowledge and experience to go through corporate procurement processes, and often aren’t aware of the opportunities. Last, handing contracts out only to local vendors can be perceived as corrupt if not handled carefully. This perception is not entirely unfounded, there are a number of cases where politicians have face criticism due to how procurement contracts have been unlawfully awarded. Naturally, and quite rightly, there is a hesitancy to come across as biased. (Reference)

Though there is a lot more work to be done, the existing initiatives have already generated positive results. For example, the Procurement Bill, which was updated in 2023, addresses barriers that hinder small companies during a procurement process. I believe the Scottish Government’s commitment to Community Wealth Building Consultation is another step in the right direction.

When challenged with the question at that roundtable, I wondered what else could we all be doing? Of course we can all buy eggs locally, and visit small gift shops to support a country’s economy. However, to really accelerate and realise the benefits of Community Wealth Building, ‘shop local’ needs to be the focus of large and small organisations working with government to create a roadmap which benefits all.

Have your say!

What do you think of the concept of community wealth building and shop local? If you have any thoughts please don’t hesitate to email me at megan@appointedd.com or connect with me on LinkedIn.