THE GROWING IMPORTANCE OF WORKING MOTHERS

According to recent research from the USA, a record number of women in the American workforce are the sole or primary breadwinners for their families.

In a finding that shows the massive change in working practices over the last fifty years, mothers now bring the majority of funding into 40 per cent of households, up from 11 per cent in 1960.

And whilst most of these families tend to be headed by single mothers, the number of married mothers who are bringing in more income than their husbands is also increasing. Indeed, in nearly a quarter of American marriages, the woman is the major breadwinner.

So what are attitudes of America to this finding?

Not surprisingly, they are mixed. Whilst 67 per cent stated that the extra income from working mothers made it easier for families to earn enough to live comfortably, 74 per cent said that it had also made it harder for parents to raise children.

Another contradictory finding is that whilst the vast majority have rejected that women should return to their traditional roles, over half said that children are better off with the mother being at home as compared to only 8 per cent for a father.

Yet, the number of stay at home fathers in the USA is increasing and is up 78 per cent from a decade ago although they still only account for 3.6 per cent of all at home parents.

But while the gender balances between the home and the workplace is changing, it is clear that many organisations still don’t understand the importance of work-life balances, especially amongst the growing number of women who want to build successful careers in business and also be with their families.

As a result, some have speculated that this could see an increase in female entrepreneurship over the next few years where customer service is more important than the hours you work.

However, not everyone can run their own business and with more women going into the workforce to earn income for their families, it is critical that governments should adjust their own policy thinking to take this into account.

As I have pointed out previously in this column, one of the biggest barriers for women to return to the workforce after having children is the massive current cost of childcare.

And whilst the coalition government has rightly acted to relax rules around nurseries, thus hopefully making them cheaper to run and therefore passing on these lower costs to parents, this is nowhere near what could be done to help families where both parents are working.

In fact, I remain disappointed that there has been no serious examination by the Treasury on how childcare and other family costs could be made tax deductible either directly for working parents or even for the hundreds of thousands of grandparents who currently do childminding at no cost.

Indeed, only last week, a study showed that almost 20 per cent of grandmothers in the UK provide at least ten hours of childcare a week, and around 90 per cent of them provide this care for free. Based on average childminder rates, that care would be worth £7.3 billion, nearly double what it was a decade ago.

So much remains to be done to ensure that government policies reflect the real changes that are happening in the workplace. With less than two years to go of this current administration, I hope that some of the radicalism we saw back in the summer of 2010 will reassert itself and that ministers will develop policies that really help hard working families around the country, especially if both parents of those families are working.

 

DEVELOPING ENTREPRENEURSHIP POLICY IN WALES - LEARNING FROM THE USA

In an earlier blog post, I discussed the development of a new economic approach by the governors of the individual states that make up the USA .

Having had the opportunity this week to fully digest the “Growing State Economies” report which sets out the priorities for such a strategy, it was heartening to note that the message was clear to those involved in economic development at a state level that they should stop competing against each other to attract investment from larger companies and move towards a more bottom-up approach to start and develop their own local businesses.

This is not going to be easy.

Data shows that individual states are, on average, still looking to spend twenty seven per cent more next year on strategic business attraction. And this is despite statistics that demonstrate that only two per cent of annual job gains across the individual states can be attributed to business relocations. Fortunately, for those keen to promote entrepreneurship at a local level in the USA, the message is slowly getting through to politicians and policymakers.

Indeed, the evidence suggests that in addition to attracting firms to a region, there is also an increasing focus by state policymakers on launching new companies and supporting existing businesses, with a growing appreciation that helping entrepreneurs start, grow, and renew businesses is one of the most important things a state or regional government can do to create jobs and raise living standards. In fact, funds for entrepreneurial development programmes by individual states will have grown by almost thirty per cent between 2012 and 2013 and, in the last year alone, over a third of US governors have introduced legislation or started specific programmes that are focused on boosting the numbers of startup companies.

So are there other lessons from the report for regional governments on this side of the Atlantic?

Are there key questions that need to be asked in relation to developing a clear policy agenda towards creating an entrepreneurially led economic recovery?

First of all, policymakers need to ask themselves whether their resources and attention are focused towards bringing in firms from elsewhere or towards growing their own entrepreneurs? Of course, this is a debate that has been going on for at least twenty years in Wales and yet we are no closer to the answer when it comes understanding the priorities of our Government.

For example, has the new office recently opened in London been established as a location to attract in new investment into Wales or as a place where Welsh firms can link in with potential clients based in one of the most prosperous and dynamic cities in the World?

Secondly, do policymakers have an agreed view of what they define as entrepreneurship and, more importantly, do they distinguish between the various types of entrepreneurs that can contribute to the economy? It is generally recognised that working with startups, where the focus is on developing products and finding customers, is very different to working with growing firms that struggle with quite different issues such as such as strategic planning, market diversification, and operational efficiencies. Yet, there is generally a lack of appreciation by policymakers of the different needs of business as they grow and develop with a more generalised approach to business support being the norm.

Thirdly, do politicians and their civil servants make use of insights gained directly from entrepreneurs and those who work with them? This is the one area in which it could be argued that Wales has made great strides recently with the creation of various industry panels to advise the Minister on key sectoral developments, as well as specific groups to develop policies in areas such as microbusinesses, business rates and city regions. Yet whilst such strategies are important, the real value is when they are put into action and that, as policymakers in the US have discovered, is not as simple as it sounds given that the imperatives of entrepreneurs may be in contrast to those of government officials.

Finally, do all the economic initiatives developed to support entrepreneurs take advantage of the complementarities between policies? This is a particular challenge for Wales where, historically, we have seen a very tribal approach to economic and business development, driven by a silo mentality where individuals “protect their patch” in terms of policy developments.

For example, we have a range of different programmes to support innovative businesses across Wales and to link them into the university sector. Yet, there seems to be little co-ordination between these programmes, resulting in the unacceptable situation where organisations are competing with each other for clients using the same pot of public funding.

Therefore, as the report from the governors of the different American states has shown, there are key challenges in developing a coherent policy framework to support entrepreneurship. One can only hope that regional governments in the UK, and indeed Europe, are up to this challenge in creating a more enterprise focused approached to economic development.

WALES, REGIONAL ECONOMIES AND LEARNING FROM THE USA

Last week, a major economic study was released in the USA that received very little publicity on this side of the Atlantic.

And it came from a very unexpected source, namely the group that represents the governors of all fifty American States, namely the National Governors Association (NGA).

With national governments focusing largely on issues regarding the global economy and how to emerge from the financial mess that has engulfed much of the Western world over the last five years, administrations at a state, regional and local level are looking to take greater responsibility for economic development, especially in encouraging their local indigenous business base to grow.

The study, entitled “Growing State Economies”, provides ideas and options to help states to develop those policies that can encourage entrepreneurship and innovation. Drawing on evidence from academics, research foundations and, most importantly, the business community, it develops a framework to help the private sector to expand and create employment.

The report is the brainchild of Governor Dave Heinemann of Nebraska, who last year challenged the other forty nine states wishing to promote entrepreneurial activity and business growth to identify the innovation and industrial assets of their region; determine the best policy strategies to take advantage of their assets and strengths; facilitate relationships between groups such research institutions, investment funds, industry associations and professional networks as sources of ideas, funding and advice; and provide the education and training needed to prepare the next generation of entrepreneurs and business leaders.

To do so, it looks to exemplars of practical policies that have made a difference to each state economy. This includes tax credits offered by Arizona and Nebraska to investors in new businesses that produce medical devices, renewable energy and other high-tech innovations; a commission in New Jersey aimed at eliminating red tape; state-funded research labs in Oregon; and how small businesses in North Carolina and Washington could be helped in expanding into the international market. But this is only is this a report that builds upon best practice from each individual state, from Washington to Florida.

It also provides a set of policy guidelines that should be of interest to devolved governments and city regions within the UK. And being authored from the World’s largest economy, you would not be surprised to learn that it sees the key to economic growth as having as many innovative, productive and globally competitive businesses and workers as possible within each state’s borders. To achieve this, the report examines how governments at a sub-national level can help more start-ups launch and grow, assist firms to gain access to skilled labour, finance and international markets, and encourage new ideas and new technologies to gain acceptance in the marketplace, especially through the development of regional clusters.

As I am sure many of you will agree, none of this is rocket science but what the NGA has managed to accomplish, which many other public bodies have failed to undertake across the World, is to articulate a clear and simple vision of how public policy can support these different priorities that can generate and support economic growth.

It also demonstrates, with Republican and Democrat governors coming together to support this initiative, that there are lessons to be learnt by the different administrations in the UK on putting economic pragmatism above political differences, especially at this time in the global economic cycle.

There is much to learn from this report and, during the next few weeks, I will be focusing on some of the main policy conclusions and their potential impact on the economy. Indeed, with the Welsh government promoting the concept of city-regions and North Wales looking for greater economic co-operation across the six local authorities in the region, there may be much to learn from what is happening at a state and local level across the Atlantic.