Skip to content
An official website of the OECD. Find out more
Created by the Public Governance Directorate

This website was created by the OECD Observatory of Public Sector Innovation (OPSI), part of the OECD Public Governance Directorate (GOV).

How to validate authenticity

Validation that this is an official OECD website can be found on the Innovative Government page of the corporate OECD website.

Small Business Friendly Approvals Program

Small Business Friendly Approvals Program - Image 4

Small Business Friendly Approvals Program workshop session

The Small Business Development Corporation (SBDC) has embraced human-centred design to transform the way regulation is developed and applied for small businesses in Western Australia. The SBDC partnered with 22 local governments to deliver the Small Business Friendly Approvals Program, which involved reviewing the approvals journey from the small business’ perspective and designing reforms to streamline processes. The Program has ignited transformational change and made it easier to do business.

Innovation Summary

Innovation Overview

Local governments are responsible for assessing approvals for a large number of regulations, including those devolved from the State Government. There are often many forms and approvals required by local governments when a small business is opening for the first time or expanding. Consequently, unclear, inconsistent and delayed decision-making are significant sources of frustration and cost to Western Australian (WA) businesses.

Every day a business is unable to open has financial and economic implications.
The SBDC identified an opportunity to partner with local governments (LGs) to make it easier to start, operate and grow a small business in WA by:

• Mapping the local government approvals pathway for small businesses
• Identifying obstacles and opportunities to ease the approvals burden on small businesses
• Designing reforms to achieve more streamlined approval processes
• Supporting LGs to implement those reforms.

The Program employed a human-centred approach to co-designing approval reforms with each LG over a six-week period, culminating in the production of a comprehensive and customised Implementation Plan for each LG to implement.

Integral to the delivery of the project was the establishment of a cross-functional working group comprised of representatives from key service areas within the partnering LG (such as planning, health, building, economic development, and customer service) as well as a representative of the SBDC.

An important component of the Program was interviews with small business operators who had experienced challenges with the LG’s approval process. Hearing from the voice of the customer was a novel approach that was both confronting and central to enabling the local government to build empathy for business customers.

The Program sought to address:
• a lack of risk-based approach to regulatory approvals
• uncertainty and inconsistency associated with the permits required and the approvals process
• the time taken for approvals due to process inefficiencies
• the large number of forms and approvals required by LGs when a small business was opening for the first time or expanding
• the requirement for small businesses to submit the same information on numerous occasions, at each approval stage
• the fees for some approvals and the variation across different LGs.

The Program has been highly successful, with LGs delivering a range of benefits for small businesses, including improved information and guidance, a reduction in approval timeframes, and the adoption of a risk-based approach to regulation. It is estimated that the Program will deliver a net benefit to the State’s economy of $73.8 million over the next ten years, with return on investment of $8.94 for every $1 invested by the State Government.

Innovation Description

What Makes Your Project Innovative?

Fundamental to the Program’s innovative design was a multifaceted co-design approach that worked across two tiers of government and brought together representatives from within the LG that may not have ever worked together.
Drawing on subject matter expertise and experience across the whole organisation, officers were guided to map out entire application processes, from finding information to gaining relevant approvals. This included working across internal departments and external agencies to meet regulatory obligations.
Rather than viewing systems management through a regulatory lens, applying a human-centred design approach and walking in the shoes of the customer, fostered a greater understanding of how small businesses dealt with, and navigated, what can be complex and confusing application and approval processes.
This methodology was transformative in driving process improvements, internal efficiencies, and cultural change, to make it easier to start and grow a business.

What is the current status of your innovation?

Successful Program delivery during and post pandemic lockdown periods in WA leveraged off design thinking and human-centred design principles to:

• elevate the voice of the small business customer;
• guide local government officers to understand the customer journey; and
• identify improvements to benefit the customer and organisation.

This collaborative approach resulted in:

• meaningful engagement with 20 LGs
• 213 LG staff participating in human-centred design workshop sessions
• 499 identified reforms
• a projected net benefit of $73.8 million over a ten-year period; and
• a Benefit Cost Ratio1 of 8.94 (i.e. for every $1 invested, $8.94 of benefits is expected to be achieved).

The transfer and adaption of knowledge gains achieved through Program key learnings, methodology, quantitative and qualitative results, has informed extended Program reach to a broader stakeholder network across state and local government.

Innovation Development

Collaborations & Partnerships

Collaborators included LG CEOs, broader executive and organisational staff , working group participants and small business operators that had applied for a permit/approval at the LG, and Regional Chamber of Commerce and Industry (CCI) representatives who provided a voice for regional small business operators.

The SBDC also partnered with the Department of Racing, Gaming and Liquor to identify improvements to liquor licensing approval processes based on successful pilot program methodology.

Users, Stakeholders & Beneficiaries

The development and implementation of Program reforms have resulted in small businesses being provided with better information upfront, faster approval timeframes and an improved overall experience.
Local governments are also benefiting from streamlined processes and stronger internal communications. Both of which have contributed to breaking down of departmental silos, and efficiency gains across the organisation, which in turn supports the LG to stimulate and sustain local economic growth.

Innovation Reflections

Results, Outcomes & Impacts

An independent CBA found that Program benefits primarily accrue through reduced time for granting approvals, resulting in additional economic activity in the small business sector. Program design and its approach to building engagement across a LG has also acted as a catalyst to investigate and implement additional reforms to their systems and processes which would otherwise not have taken place.

The $2.2 million taxpayer investment through Streamline WA is expected to deliver a net benefit of $73.8 million in present value terms over the next ten years. This represents an all-encompassing win for small businesses, LGs, local communities, and WA.

Challenges and Failures

Pandemic impacts including lockdowns, working from home orders, health directives and high staff turnover necessitated that the SBDC and facilitators evolve and adapt the 10–12 day Program delivery.
This agility ensured delivery to 11 metropolitan and nine regional LGs, through bespoke re-designs and support measures to meet the evolving pandemic situation and partner’s capabilities.
Pivots included shorter and more condensed officer contact time, and greater SBDC and facilitator support in developing Action and Implementation Plans.
Ongoing resource stress in regional centres necessitated further recalibration and the development of alternative delivery models, including two-day intensive masterclasses to impart key Program learnings.

Conditions for Success

Working across two tiers of government, each with a unique set of regulatory parameters and expectations required a high level of trust and commitment by each partner. This included:

• Local government partner:
o An engaged and willing CEO and executive team
o The organisation having the time to commit to the Program
o Leadership to ensure implementation of reforms, and permission from the CEO for officers to continue to innovate.

• SBDC:
o The design and execution of a strong project plan and management process
o Ensuring reforms strategically aligned with State Government policy objectives and LG community and corporate plans
o Provision of a mechanism to monitor and report on reform progress
o Measuring results.

Replication

In addition to catching the attention of intrastate and national networks, and a recent Silver Award from the Institute of Public Administration Australia WA, the Program’s unique design, key learnings and proven methodology currently informs internal projects and was the catalyst for Program delivery to state-based agencies committed to developing reforms to streamline:

• Low-risk liquor licence applications - Department of Racing, Gaming and Liquor; and
• Approvals processes for tourism industry business customers - Department of Biodiversity, Conservation and Attractions.

Preparations are now underway to further expand the Program to other agencies seeking to improve the way they develop and apply regulation.

Lessons Learned

Delivery of the two-year initiative is now complete, and a recent independent economic evaluation confirms that the Program’s benefits to small businesses and LGs will accrue over time. To maintain reform momentum, the SBDC will continue to work with participants to make it easier for small business to establish, relocate, grow and thrive.

This strengthening of working relationships will not be developed in isolation but continue to be based on a collaborative approach, one that leverages off all aspects of the SBDC and contributes to ensuring better outcomes for our local government partners, their small business communities and the WA economy.

Anything Else?

Following is a statement by ACIL Allen, a leading in independent economics, policy and strategy advisory firm, commissioned by the SBDC to undertake an Economic Evaluation of the Program.

“In ACIL Allen’s opinion, the Small Business Friendly Approvals Program is a cost-effective, fit-for-purpose approach to identifying and progressing reforms which benefit both small business and the Local Government sector.

The Program’s disaggregated design and approach to building engagement across LGAs through a multidisciplinary team has clearly acted as a catalyst for individual organisations to investigate and implement reforms to their systems and processes that may not otherwise have taken place.”