Two hours workers earning less than the minimum wage can become a new pipeline for affordable labor for small businesses, if arranged by a digital inclusion innovation. Labor credit, where loans are used to pay workers directly at the end of each term, for the duration 2–4 months, can become a low interest special purpose facility, useful for SMEs that need workers in certain seasons for certain roles.
Spending map, where pegs for fixed amounts are published to spend on food and transport, every month could become a new way to drive customers to SMEs, as well as ensuring that small business workers can see options for more affordable ways to live.
Irish SMEs and Digital Inclusion Innovation
Libraries, public and academic, have lots of business related books, containing vital knowledge on how to do business better. There is hardly time for many small business owners or managers to read, but there can be a digital inclusion solution, where shelves containing business books are divided to certain library members or users, where they have to flip the books and note things of interest, then to submit, so that it can be adjusted and sent as short messages to owners to learn how to do business better.
One of the ways that many big businesses often survive is listing on the stock market, but many small and medium businesses—in many places—don’t have this pipeline, taking away a possible means of growth. Though models like SPAC have helped some companies list, it is possible to have a digital inclusion solution that becomes SMEs Index on the stock market, so that certain medium stage businesses can list, possible within Ireland, and in several other countries around the world where SMEs can do better.
There are medium stage businesses where they distribute or have a couple of branches or a large number of workers, they can align on an index, and be able to raise equity, to grow to make stuff, expand to new markets, while using their links to small businesses to boost more.
This guest post by David Stephen explores new directions that Irish SMEs could power for the industry and for the rest of the world.
SMEs: Global Digital Inclusion Innovation from Ireland
There are several resources for small businesses, yet the failure rate remains high. Innovations for SMEs are not always right for many of them. For some, what they need is a simple text message on possible business direction. For others, it is how they can have access to a new marketplace. There are often tools, but the business environment remains competitive and unpredictable.
There can be two pizza restaurants in the same vicinity, with similar standards, pricing and products but one gets the crowd and the other doesn’t. There are observations that certain small business owners or managers don’t make. There are also instructions they miss out on because they don’t have access to business and management consultants. There are tips for them, but some are vague and general, not particularly applicable.
There are several means that big businesses use in growing and excelling, but it is difficult for small businesses. To thrive, there are provisions they can use to cut costs, while maximizing possibilities for growth.
There are some possible new directions, for SMEs explored, below.
SMEs Labor Economics Model:
2 hours work, in 3 shifts within 12 hours, paying less than the minimum wage could become a new way to ensure that small businesses get all the workers they need in a way that is affordable enough not to strain the business. Labor costs are some of the challenges that small businesses have and options are limited, either not to hire, or to overwork those hired, or cut down on business possibilities because of fewer hands.
There are several roles in several small businesses that do not necessarily require high skills. These roles are a key opportunity to provide workers on demand, in a new labor economics model that revolves several workers while allowing responsibilities to get done with lower cost.
There are people in communities without work. There are others who have spare time, or have other things to do, coming in to work for two hours for a stretch to earn less than the minimum wage is something that a council government can approve as a limited stream to ensure that workers are available, enabling the local economy while benefiting multiple interests.
Already, there are people who have work but report that the minimum wage does not cover the cost of living. There are also small business owners or managers who say the minimum wage is steep. Meeting at a middle point for both would allow some still have free time for other things, while also working, earning—not enough, but something while saving from the burnout, stress and intensity of jobs that still don’t pay the bills.
A digital inclusion innovation could subsume this in this era of the gig economy and freelance work, while getting approvals and ensuring that roles are tiered, with this one as the lower tier, while SMEs can still hire others on other tiers, while limiting their use of this tier not to take too much advantage. There would also be protection against risk, competition, with insurance or agreements for small businesses, so that workers don’t come and cause harm or damage then leave.
Innovating this is possible within Ireland, to go around the world, to change what it means to work.
Labor Credit for Wages
There are several loan packages for small businesses catering to different needs by several entities, public and private. Most of the loans, though served over an interval, still come in bulk, such that a certain amount is approved. There are often purposes for most loans, but interest rates and terms make them sometimes unfriendly to small businesses. Loans also, do not guarantee that a small business will do better, or sell more. There are shops with stock but sales are low. There are others that what they need is not what they expend their loan on. There are risk levels for loans to small businesses as well as mismatches.
What some small businesses need are experts in behavioral economics, to model new paths for them, or those in game theory, digital marketing, inclusion, sales, and so on. There are some workers needs that can be used to nudge the business forward, but many times, things deemed unnecessary by SMEs are what would induce growth.
So instead of bulk or general purpose loans, it is possible to have a special loan, to pay wages only. This loan goes directly for payment, as the small business would only send payroll, so deductions and others are made, but payment is made to workers, contract, or permanent, at the end of each term, directly.
The goal is for skills or workers to be added to increase reach, possibilities or strategy for that business, to make what should have been shortages, or losses get cut.
There are lots of fintech solutions for loans and credit, but loan for term payment are hardly common, or available, or designed as a product for many SMEs. The goal is to have a new solution for this, where banks and other players can use to power credit for salary directly to workers, for 2–4 months. It is expected that the small business starts to pay back before the end of the term, while having a friendlier interest rate since the risk is low and the loan is not in bulk.
This may also be useful to pay for the two hours’ labor.
Universal Basic Income Spending Peg for SMEs
There’s buzz on UBI [Universal Basic Income] as a way to guarantee income should automation take most jobs. But what may be necessary may not be that, yet, but a way to show how people can spend a certain amount, in one month, in a community.
For example, how can someone spend say 150, 200, 250 euros in a month on just food and transport? So that no matter how low any income is or underemployment, it is possible to know that some amounts are possible following that published peg.
Compliance is optional, but the purpose is to show that it is possible. The list can be updated per inflation and different across regions. A digital inclusion innovation can model how communities can shape this.
Also, it is possible to use this to boost SMEs, such that what they have makes the list, driving customers their way. Small business workers can also benefit from this, as well as students, the elderly and others.
Digital Inclusion Serendipity from Libraries
Small business owners can receive text messages on tips from books on business, economics, marketing, sales and so on, for ways they can do better. These messages would be tailored for them based on the business type, location, size and so on. There can also be voice messages instead of text messages to some, as another option. There are many books in the library with lots of information, hidden away that can shape how a business improves.
Making this possible such that some library users or members would get the information out and note, then send it to a repository that would organize them, and make it possible to be delivered to business owners or managers once every week, could be an additional tool for growth.
The arrangement of this from all sides is possible with a digital inclusion innovation.
For SMEs, to do better and more specifically grow, requires new ways and options for their approach, so that they can find ways of taking advantage of tools at their disposal rather than seeing no choice, which is sometimes the case for many.
SMEs Stock Exchange
It is possible to have a new SMEs Index on some stock market, or local indexes where investors can buy stock of some medium business so that they can get on a growth rung, while enabling more small businesses to become medium scale businesses.
For some medium businesses from being wholesalers, distributors they may go on to become to manufacturers, with factories, develop R&D while also possible to acquire smaller players, benefiting the economy. There are outsourcing companies within a region that can scale into global labor companies, using new labor economics models.
It can be called the SMEX Index 200, allowing companies that sell directly to consumers to list. Certain stock exchanges use the single index model, mostly composite, but there will be a second layer that would allow new companies to list, investors to buy stocks, letting inflows into companies and the economy.
There are some original equipment manufacturers and original design manufacturers that started differently before they grew into that function. With access to liquidity and the possibility to offer new stocks, many mid-sized growing businesses would list in a throw-target for growth. They would disclose information, switch to higher standard, get goal driven and find new niches they can drive.
SMEs grow, but mostly level off at a certain size since they have no altitude connector. Using this path, it would be an answer to some of the growth lapses for many years, with businesses. Some companies offering consumer products may choose to move there, but would mostly target new ones.
This can be a new addition along SPAC [Special Purpose Acquisition Company], decentralized finance, low interest rate extensions and more. There could be SMEs Food Index, for restaurants or SMEFi, or hospitality index for medium scale hotels SMEhi, and many others: SMEFi 100, SMEHi 150, SMESi 200, and so on.
Digital Inclusion Innovation
SMEs are the closest businesses to people in communities and are the key opportunity to turn a local economy around in a new way. These paths as products could be made in Ireland, for SMEs, as necessary and possible for small businesses, within and in other places around the world.
David Stephen does research in theoretical neuroscience. He has a research experience in computer vision at Universitat Rovira i Virgili, Tarragona. He was a visiting scholar in medical entomology at the University of Illinois, Urbana-Champaign. He blogs on troic.medium.com
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