If you want to fix the economy, do this
Aid bureaucracy is bad business for the aided, and even worse for the country.
This is not the first email I have received asking me if I am a consultant accredited by a public administration, which gives grants to small companies that want to grow, internationalise, digitise... The answer is always the same: no.
Small companies are (by far) the main creators of new jobs, as large companies have for years been committed to replacing people through the automation of many processes. However, the vast majority of companies created die within the first five years and, again, the vast majority of the survivors die within the next five years. This leaves us with a net survival rate of 4% of start-ups, which gives us an idea of where public policies need to go if we are serious about promoting entrepreneurship.
Increase the survival rate of small businesses by cutting red tape and lowering taxes. It is as simple as that.
Giving grants for business improvement (for example) through endless administrative processes is a good example of what I call the bureaucracy of aid. The eight thousand euros that they will give (after a long bureaucratic process) to a company that wants to be more sustainable does not compensate for the fact that the authorisation to install solar panels takes 7 years. Giving away financial mentoring to a self-employed person who pays more than 200 euros in contributions and is obliged to submit VAT is an awful financial idea. Take out the 200 euros or set a minimum turnover of 100,000 euros to submit VAT, and you will see how their finances improve.
© Oriol López 2023