Networking and Outsourcing: Have we come full-circle?
A recent business statistical analysis written for Parliament by Chris Rhodes provided me with some rather interesting business information. I was stunned by the fact that 4.6 million of the 4.8 million UK businesses were micro enterprises in 2012. The analysis also reported that the majority of these micro enterprises were sole-proprietor businesses, with no additional employees. This made me wonder just how well all these sole traders were managing the extreme amount of work that comes with operating any business. It is difficult enough to cope with the workload when there are several employees to assist with the various tasks, so I have a hard time imagining that the majority of the 4.6 million sole-traders are handling all of the work without any help from others. Then I realised that most of them were relying on networking and outsourcing, and this made me ask myself, “Have we came full-circle in our economic development in the UK?”
UK Economic Systems
If we look at the history of the UK’s economic systems, we find that the UK started out with an economic system based on hunting, fishing, and bartering or trading. Then our ancestors switched to an agrarian system, based primarily on agriculture, along with trading. Next came a period in which the domestic system was used. This structure was also known as the putting-out or cottage system, because people manufactured finished products in their homes. A manufacturer would provide raw materials to the cottage dwellers so they could assemble a finished product. Next, the finished products were sold to the business owner who had provided the raw materials, with the cost of the materials being subtracted from the cost. Then the products were sold back to the cottage dwellers or elsewhere at a much higher price. Thus, the manufacturing, textile and retail industries expanded. The factory system eventually replaced the domestic system during the Industrial Revolution.
During the UK’s colonisation period, mercantilism became the primary economic system. The UK business owners had a built-in customer base. Mercantilism required the colonists to conduct all of their trading and business within the British Empire and capitalism replaced mercantilism as the British Empire started giving more autonomy to its colonies. As capitalism and the Industrial Revolution took hold, large corporations and global business conglomerations arose, especially in the manufacturing and finance industries.
Solutions in the Ancient Past
In the ancient past, all mankind relied upon themselves or micro businesses for every type of product and service. There were no large corporations or business conglomerations to satisfy massive demands. However, there are several differences between the ancient micro businesses and the modern day ones. For instance, there was a smaller human population demanding the products and services provided by commercial businesses in ancient times. Many of the businesses were also set up as partnerships with the government or as monopolies that had very little competition from marketplace rivals.
The business owners did utilise networking and outsourcing to help create, produce and market products or services. However, many of them also relied on uncompensated or low-cost labour that was not officially classified as employees. For instances, during the Celtic and Roman times of occupation, slaves were used for labour. The Saxons and Vikings also had slaves. However, slave labour was primarily utilised in its colonies, while apprentices and poorly paid peasants were used in the British Isles. In the UK, slave labour had gradually been replaced with indentured servants and apprentices, as well as by women and children labourers. And eventually the machines and new technologies began to replace both, the unskilled labourers and the craftsmen.
Modern Day Workload
However, the work required to properly operate a business has not changed much despite the passage of thousands of years. In modern times, as it was in the ancient past, a business owner has to perform many duties. There are the administrative responsibilities, such as bookkeeping, accounting, and daily correspondence. And then there are the tasks created by the need to research, create, produce and market the products or services. Additionally, there are the everyday jobs that come with taking and filling the orders. And of course, the business proprietor must provide good customer services if he or she wants to succeed.
As in the past, governments are forming partnerships with privately owned businesses to accomplish their social and economic goals. And in turn, these businesses must keep up with the demands of their potential customers. They must also beat out the fierce competition in a global marketplace that is flooded with competent rivals. However, due to the increase in costs and laws governing the business realm, proprietors now have fewer options for coping with the workload. Entrepreneurs can no longer rely upon uncompensated forced labour or low-waged employees to perform the majority of the tasks. Yet, the workload is too much for any person to handle single-handedly.
Modern Day Solutions
So nowadays, modern day businesses of all sizes are discovering that the only way to survive is to utilise a system of networking and outsourcing. Larger companies are regaining their competitive edge by downsizing and outsourcing some of the administrative work to small, home-based virtual offices and transcription businesses. These smaller businesses typically perform the administrative tasks related to accounting, record keeping, bookkeeping, accounting, and customer services. Some of the smaller companies provide sales and marketing support, or provide the services that would normally be handled by a secretary, personal assistant or receptionist. Some also provide the essential technological support, website designing, computer programming, and website maintenance that modern businesses must have.
Nonetheless, even the smaller businesses need extra help with their workload. Due to the costs and employment laws, most small to medium sized businesses cannot afford to take on permanent employees. Yet, without more people to do the work, a business cannot easily expand or gain a competitive edge over its global rivals. The business is limited to whatever skills, talents, and expertise that the owner/operator has, which may not be enough to keep the business going. So it is essential for the small to medium sized businesses to network with each other, as well as network with the larger companies.
Thus, the UK economic system may have come full-circle by returning to the cottage system. Perhaps we have indeed returned to the economic system that worked best for UK citizens, since this system allows people to once again work from home. However, there is a huge difference between the current putting-out system of the past and present. The current putting-out system utilises well-trained, well-paid adults to provide the services instead of unskilled, uneducated peasants and children. Thus, this system could eventually help the UK regain its supremacy of the global marketplace in every industry, once we have learned how to properly use the system.