Those operating in the world of business know that many factors impact success, like your location or markets, but one avenue often unexplored is public policy, which can have a massive impact on your operations. If you’re an aspiring entrepreneur or currently own your own business, then it is imperative to understand the public policy in your jurisdiction. This article will delve into the relationship between public policy and companies so you’re better prepared for a prosperous future.
Table of Contents
What is Public Policy?
Public policy isn’t only about governments influencing markets, it also dictates how businesses and people operate. This includes a wide range of regulations, laws, and actions that address many things, such as social issues, economic growth, and trade. However, the implementation of public policy can have far-reaching consequences, both positive and negative.
While it largely depends on where you reside and what business you operate, the effect on policy can largely impact the outcomes of your business. Things like regulations or government incentives can propel your business to success but if you’re on the other side of the coin it can make certain aspects of your business too costly to maintain. Recently, more policy is geared toward things like economics or sustainability, so the country can maintain growth while managing its impact on the environment.
Effects on Market Dynamics
One of the ways in which public policy impacts businesses is through its influence on market dynamics. Policies related to trade, taxation, and industry regulations can reshape the landscape and disrupt established markets in a multitude of ways. In some cases, war can bring about trade restrictions between neighbouring countries having a massive impact on imports or exports. If parts of your business are reliant on trades with other economies or countries it might be good to review the potential risks of this business model.
Understanding Regulations
When discussing public policy’s impact on businesses, it is impossible to ignore the burden of regulations. While regulations are necessary for maintaining fairness and protecting consumers, excessive hurdles can slow innovation and business growth. These can be particularly burdensome for entrepreneurs who may find it difficult to navigate regulatory frameworks when developing new business ventures.
In Australia, we have a variety of regulations that apply to new businesses that can help promote fair working environments, health and safety standards and appropriate taxation to name a few. If you want to run a restaurant, for example, you will need to ensure all staff are adequately trained in food preparation and maintain a clean environment. The breaching of these conditions can result in hefty fines and authorities often performing checks on businesses.
While larger more established companies might already know how to navigate regulations it’s important to understand the landscape as a smaller business. This understanding upfront will help you be prepared for your growth in the business space and avoid any nasty surprises.
Government Incentives and Subsidies to Fuel Growth
Additionally, public policy can also catalyze entrepreneurial growth through incentives and subsidies. We can see many governments offering tax breaks and grants to encourage specific activities in certain industries. This support can provide aspiring entrepreneurs with the necessary resources and incentives to turn their innovative ideas into thriving businesses.
We can see new and emerging technologies that make us more efficient and environmentally friendly being a significant target for these incentives. Credit or subsidies for the production or use of electronic vehicles might be one, or even penalties for excess carbon use might be another incentive. All these have the potential to affect businesses so make sure you keep on top of these developments.
Summary
To conclude, the complexities arising from public policy can have far-reaching consequences in your local and global economy. Anyone involved in business needs to keep their finger on the trigger for any potential developments and changes to policy so you’re prepared. Those cognizant of these changes and how they can use them in their favour will be the ones most poised for success.
