The enemy of entrepreneurship is often seen as ‘Red Tape’ (administrative and bureaucratic procedures). And there have been many times in my career where I blamed it for holding back ideas or plans.  However, ironically, the opposite is apparently true.

Think about it:  In countries with very little red tape, corruption abounds.  Deals can be set up one day and be simply ignored the next.  Securing one’s revenue and distribution chains is a nightmare.  Historically, the countries with the highest sophistication in administrative procedures are the ones that survive political and economic changes the best.

Whether we like it or not, red tape is good for us.  It is the collection of procedures that ensures stability and gives confidence to outsiders. However, there is a balance and most of us can think of numerous examples of restrictive red tape, but even many of these on closer inspection, make sense (maybe not for us but for the people they protect).

The question to consider when complaining about Red Tape is that if you take any bit of it away – with what, if anything, should it be replaced?

As global companies work ever harder to standardize their procedures across the globe, to achieve visibility and red tape efficiency, perhaps someone should consider an SAP system for governments and countries?  Imagine it: One way of applying for a license to trade, or for completing a VAT tax declaration?  

However, when I look at what is happening in the small country in which I live, I am simply amazed at how good humans are at creating procedures and rules to protect their own personal, narrow, interests. Whether it is good for their society as a whole – that is another matter!

Here in Belgium the politicians are busy trying to set up separate social security systems for the three different regions.  When you consider that Belgium has a total population smaller than that of Paris, it’s simply amazing that it can survive at all as an independent!  At the end of the day it is the Red Tape that is holding it together during the politically difficult times it is currently going through.   

Where would we be without it?

Have a good week

Harley