Hunting for Bureaucracy: a challenge that will save money for small businesses


How entrepreneurs can influence regulatory policy in their sector.

Businesses will work to the fullest and develop only when the state facilitates the business environment and introduces clear, understandable, and transparent rules of the game.

It may not be obvious to the state decision-makers what exactly hinders entrepreneurs involved in a particular activity at a certain stage.

Public authorities often believe that they know about all the problems of business. In fact, these are “common” problems of major players and members of several well-known business associations playing a significant role and having a long experience working with the authorities.

At the same time, many small entrepreneurs are not members of any business association at all. The vast majority of their ability to lobby their interests is insufficient, so many regulatory issues remain unresolved. However, it is possible to establish cooperation with small and medium-sized businesses.

Direct contact through online tools will help quickly and effectively determine what the government requirements entrepreneurs consider excessive or irrational. First of all, these are short online surveys that allow to find out a business position on a particular issue.

The principle of such interaction is quite simple. Analysts compile an exhaustive list of government requirements for a particular type of business (for example, the beauty industry), examine them for feasibility and efficiency, and propose to cancel/change certain rules and optimize interaction with the state.

Many processes related to starting/ending a business and obtaining permits can be converted into an online format. This will minimize entrepreneurs’ contact with the authorities and, therefore, reduce corruption risks and bureaucratic pressure on entrepreneurs.

After an expert assessment of regulation, it is important to agree on proposals for its improvement with business representatives, who are likely to add a few initiatives of their own.

Currently, online surveys are the most optimal tool for obtaining quick feedback from businesses on the proposed changes.

The UK Government’s Red Tape Challenge initiative, which was implemented in the country in 2011-2014, can be a foreign equivalent of this interaction format between government and businesses.

The initiative is based on the classic crowdsourcing of business representatives’ opinions on the need/adequacy of legal acts regulating business activities.

First, representatives of the government department responsible for deregulation policy analyzed the regulatory environment in the sectors.

A list of provisions that regulate the activities in a particular sector was published on a specially created page of the Government’s website, and business representatives were asked to comment on them.

About 21,000 regulatory acts in 28 sectors and more than 100 markets were analyzed during the Red Tape Challenge. The survey did not include tax and national security provisions.

In the end, the Government collected more than 30,000 comments from the business community on which regulation to keep, improve, and abolish. As a result, more than 3,000 regulatory acts have been abolished or revised, saving businesses more than £1.2 billion a year.

EU countries have used different tools in their practice of combating bureaucracy and excessive regulatory burden on businesses.

For example, the European Commission’s Cutting Red Tape initiative was based on a systematic review of economic sectors, in-depth expert assessment of the regulatory effectiveness, formulation of proposals to change the regulatory environment, and further communication with businesses.

The UK Government has launched its Red Tape Challenge. Unlike the European Commission, the UK Government focused more on business representatives’ opinions on how effective and adequate regulation is in terms of the realities of economic development and business needs.

In the current context, when small businesses suffer the most from pandemics and quarantine restrictions, public policymakers need to develop effective compensation mechanisms, including making it easier to do business.

The goal expected: businesses spend less time and money on start-ups and activities, reducing the number of contacts with government officials. Identifying specific business problem issues and reducing the regulatory burden on certain activities should be deregulation policy priorities.

That is why the Better Regulation Delivery Office (BRDO) and the representatives of the Reform Support Team (RST) at the Ministry of Economic Development launched an initiative to review the regulation of specific business types with parallel communication with business community representatives. The initiative is an adapted version of the Red Tape Challenge. We called it the “Hunting for Bureaucracy”.

We choose a specific type of business and form an exhaustive list of regulations covering its activities. Next, we create an online questionnaire that contains simple questions about the need and adequacy of regulations.

We publish questionnaires for entrepreneurs on the BRDO’s Facebook page once every two or three weeks and distribute them among profile associations.

Every entrepreneur in the sector we study can participate completely anonymously. The motivation to spend five minutes on a questionnaire is quite simple: it is a real opportunity to drive changes in your sector regulation.

To date, we have analyzed the regulatory framework for activities of beauty salons, fitness centres, and related businesses. A survey on the regulation of service stations is currently launched.

Doing business in a modern developed country should be simple and comfortable. This is an ambitious and long-term goal, but it is achievable for the state. We can make it only by joint efforts.