Why Businesses Need a Strong Understanding of Public Policy

While you may not initially expect it to have such a large impact on the business landscape, all businesses need to have an understanding of public policy, the stronger and more in-depth the better. Why? Well, there are three major reasons, but first, we should explain what public policy is.

What is Public Policy?

In short, public policy is the guidebook that politicians and legislators use to draft new laws for society and to guide their decision-making. Policy can be held on just about anything, ranging from specific policies regarding criminal or civil legislation to simple things like how they run meetings. Every political party has their own set of policies that describe its political ideals and intentions and can be used to give both members and voters an idea of what they will do if they get into power. These policies are, in essence, the playbook for political parties and the basis for how large parties maintain cohesion on a variety of important and influential topics.

Public Policy is what happens when those guidebooks become the law. They describe in specific detail the intended effect and the specific regulations over any given subject matter and can dictate huge swathes of society. Just like internal political policy, Public Policy can cover anything from how individuals meet and associate to what counts as a civil or criminal offence to detailing how those offences should be responded to.

So, Why Should Businesses be Concerned about Public Policy?

Simply put, it's because public policy dictates how businesses are allowed to operate. Public Policy is how licences get set and how they are dispersed. They dictate key monetary matters like minimum wage and pay levels, to broader concepts like who pays superannuation and how much. Public Policy can place restrictions on unions and restrictions on who can be employed. It can even control who comes in or out of the country and what jobs are permitted to be run remotely, robotically or offshore. But public policy can go further still, modern issues like controlling who has access to personal data, how it is handled and setting minimum standards around cyber security are buzz topics in modern industries, and issues surrounding accessibility and job security for employees are of growing concern.

With that in mind, it should seem pretty obvious that an understanding of public policy, as it relates to business, should be a major concern for businesses. But it's just that right? A concern? So long as the business plays nice by the law and keeps itself updated on public policy changes so it can respond accordingly everything is covered right? Well... not exactly. Obeying existing policies is one reason why businesses should be concerned, but there's another reason as well, and that's for future-proofing.

Public Policy may feel like a static, slumbering beast you have to research just enough to obey, but it's essentially a living entity. Changes in public policy happen all the time - especially with each new electoral cycle - and some businesses can be very susceptible to public policy decisions. An increase in minimum wage can massively affect the bottom line, but a change to international workers' visas could affect both existing and future employees. More to the point, international laws and international policies can affect this too.

Businesses today often need to be competitive at a global scale, and understanding the trade and political agreements from one country to another can be critical even for simple things like importing or exporting products. However, change happens all the time. A business built on international branding, or adhering to international laws, may have issues when entire markets suddenly close up or adopt isolationist policies. In recent years, the practice of globalism has been met with friction and between Brexit and the Euro Crisis a strong movement against globalism has sprung up, sparking a global culture war. Adhering to and predicting local policy is one thing, but predicting national and global trends on top of that is something else entirely.

How to get the Expertise to Account for Public Policy

For many businesses, it's practically a requirement to hire someone who has completed a policy evaluation course just to obtain reliable advice to deal with sudden and rapid changes in the market, assisting with the development of new business models. This can be achieved by hiring a contractor for the purpose, or it could involve training members of management in the reading and evaluating of such policies.

It's often not reasonable to expect all members of upper administration to be experts in public policy, they already have to be experts in management and planning, and adding local, national and international public policy into the mix can be quite an ask. However, it's still useful to have business leaders trained in how to read, obey and predict the future of policy in order to best inform those plans. For small businesses, training your key staff might be critical, but for larger businesses, hiring outside help is often unavoidable.

But there is a third reason why all businesses might want a solid grasp of public policy.

Business Lobbying

Why simply adhere to or evaluate and predict the future when you can make it happen? Lobby groups billions of dollars in business spending every year, and those who spend the most are often among the most influential political players. The Australian Hotels Association and ClubsNSW, together, disclosed roughly $16 million in political contributions in only two financial years, fighting to keep poker machines in hotels. In doing so, they retained an income that would otherwise have been removed. The Association of Mining and Exploration Companies regularly spends millions campaigning against anti-mining advocates. On the flip side, many of those advocate groups are supported by businesses trying to forge an opening in the market for "clean energy" or "ethical products". The world of public policy is as much a battlefield for activists as it is for businesses that often operate on either side of that spectrum, and having a foot in the door and a voice in that battle requires engaging with and taking a stand over public policy.

Regardless of the priorities of your business, public policy is a major factor that cannot and should not be ignored, especially for those businesses that want to be industry leaders and have a strong voice in the future of their own products.