Small firms need big government
Small firms need big government
Last week I spent two days on a placement with a firm in Hoorn, Excellent Products. If I learnt one thing, it’s that enforcement of the rules is vital for small and medium-sized enterprises (SMEs). The alternative is that those SMEs which obey the law are driven out of the market by fraudulent firms. So should the government cut spending on inspections, it will not only be consumers and workers, but also the owners of small firms who understand that they must rely on the government when companies knowingly break the rules.
Excellent Products has its headquarters in the Netherlands town of Hoorn, but also operates a factory in Vietnam where the products – fasteners such as ratchet straps and luggage binders – are manufactured. Monique Ansink rules the roost at the firm and takes the issue of social responsibility seriously. She knows that her products are tremendously important to transport safety, as this could be directly affected were straps to give way. So she does her absolute best to meet all safety regulations. Unfortunately some of the competition take less care over quality, with the result that their products are correspondingly cheaper. Here however, it’s certainly the case that buying cheap is buying dear.
In the retail trade quality is of course important, but shops which compete ruthlessly on price and where quality takes a back seat are on the increase. During the economic crisis of recent years consumers are more concerned about price than ever, so it isn’t easy for a firm to maintain the quality of its products.
There are now EU product safety rules which are then converted into technical specifications, known as ‘the standards’. Use of these standards isn’t compulsory. Firms can decide for themselves how they demonstrate that their products meet them and how they are tested. This avoids a lot of bother and the consumer can be certain that the product in question is safe.
The government no longer develops standards itself, but has hived this task off to private standardisation agencies. In Europe there are three big players, which between them set the majority of standards. If you want to know what the technical specifications are, you have to buy them from one of these agencies. After you’ve made your product according to these specs, you will have to have it tested by a testing body. These are also private firms, some of which are excellent, while others are simply on the fiddle and will grant a certificate despite not having applied adequate tests.
If you look for ratchet straps in a shop, you’ll notice that each has a label carrying a great deal of product information. For the average consumer, however, it’s impossible to distinguish the authentic from the knock-off, let alone to know whether the testing body mentioned on the label is reliable or not. So before long you find yourself with a cheaper product but one which isn’t as good. Only if fraudulent companies are exposed can an equal playing field be restored, but for that you need sufficient numbers of inspectors in your food and goods authorities. What’s being said now is that the standards are a private matter, so we don’t need to give them priority. Meanwhile, our safety is at stake.
The need for enforcement of the rules for the achievement of a level playing field was the main theme of the entire placement. We even spoke about the reintroduction of a modern version of the diploma which we used to have in the Netherlands for people working in retail. I’m in favour. Honest entrepreneurs such as the Excellent Products team should be given a fair chance, with the authorities not sitting back. Inspectorates, but also, for example, the customs service, should be used to create that level playing field. Entrepreneurs such as Monique deserve that. Who sets aside two whole days to tell a Euro-MP about the practical problems which an entrepreneur faces? I will in any case be quickly getting down to work in the European Parliament armed with the four pages of action points which I took away from the visit and will be sending Monique a progress report on a regular basis. Action not words!
- See also:
- Dennis de Jong