“Think Small First” or “Small Business Lens” Principle

What is the “Think Small First” or “Small Business Lens” principle?

The “Think Small First” or “Small Business Lens” principle is a policy approach to consider small business needs, points of views and impacts when designing legislation, policies, and regulations. The “Think Small First” or “Small Business Lens” principle relies on the fact that “one size does not fit all”, meaning that policymaking needs to account for the disproportionate effects regulations have in businesses of all sizes, and thus, deliver streamlined requirements that are easy to comply with by all final users. The European Commission’s Think Small First document, Canada’s Small Business Lens, and the SME Policy Institute Association’s SME Test all provide useful resources on this principle that will be further discussed in this guide.

Why does considering small businesses in policymaking matter?

Small businesses account for most employment and economic activity in countries across the globe. And yet, they are often hard to reach by policy consultation processes and face higher burdens and costs in complying with policy requirements. The “Think Small First” or “Small Business Lens” principle stands as a core guideline policymakers can take to mainstream small business considerations into all stages involved in designing, implementing and evaluating regulations. Adopting small business lenses in policymaking can help reduce the regulatory complexity and compliance costs that new policies can have for small businesses. Policies that deliver simplified administrative rules and procedures for small businesses ultimately make it easier for them to comply with the law.

How can the “Think Small” or “Small Business Lens” Principle support small businesses to trade?

With the same importance small business considerations have for general policy making processes, thinking small first matters for designing, negotiating, and implementing trade policy. Although small businesses are the main engines of employment and economic activity, they do not participate in international trade on equal terms with larger firms. Applying the “Think Small Principle” can enable trade policies and agreements at national, bilateral, regional and multilateral levels to be inclusive of small businesses. In turn, this plays a role in developing trade requirements and provisions for enabling small business to engage in cross-border trade by facing less compliance costs and having better access to business support, finance and information needed for doing international business. The Federation of Small Business Trading Forward provides further information on how policymakers can start approaching the “Think Small First” principle to support small businesses to trade.

Where can policymakers access further resources on policy frameworks, guidelines and tools?

• OECD’s SME Policy Index: The Organization for Economic Co-operation and Development (OECD) uses a small and medium-sized enterprises (SME) policy index for guiding countries to setting targets for developing policies affecting small businesses. Visit the OECD website.

Where can policymakers access good practices and national examples?

• Australia’s Guidance Note on Best Practice Consultation: The Government of Australia developed guidelines for regulators to undertake inclusive policy consultation processes and consider practical matters when involving small businesses. Visit this website of the Government of Australia.
• Canada’s Small Business Lens Checklist: The Government of Canada formulated nine checklist items for regulators to include small businesses in policymaking processes and consider their needs and potential impacts in meeting regulatory requirements. Visit this website of the Government of Canada.
• European Commission’s Consultation with Stakeholders in Shaping Policies Affecting Small Businesses: The European Commission assessed methods and procedures on policy consultation processes to identify how small businesses can be better involved in policymaking at national and regional levels. Visit this European Commission website