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DTI warning for small businesses.

Lord Simon of Highbury, the Treasury and Trade & Industry minister responsible for competitiveness, warned small businesses that they will not be immune from the current wave of industrial globalisation that is affecting the largest companies. “I think there is a lot more awareness of how extremely competitive global and European markets are becoming for everybody and how that’s going to impact right down the supply chain,” he told Financial Director. “Because of the way that the world is going and information and knowledge are transferred so quickly, more and more small companies in supply chains are going to feel the effect of global competition in real time. They’ve got to react and understand the marketplace much more quickly.” Lord Simon, a one-time FD of British Petroleum, added that he was concerned about the difficulties faced by smaller companies in raising capital. “We’ve got to get more flexibility in the system and that means looking at the taxation issues behind capital gains and venture capital and (business) angels,” he said. “We’ve got to look at those systems and talk carefully with the banks about how finance for small business works.” He added that he did not think there was enough incentive for risk-takers. “We want to think about trying to rebalance risk and reward. We think that’s a fundamental part of why the US has been successful in the growth of small businesses.”

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