16 business focus
We are on a confident path of recovery and growth
Confidence – that underpinning catalyst for growth – has returned to the Thames Valley business community, according to delegates attending Grant Thornton’s Agents of Growth summit in Reading
“I have a general impression of optimism in this room, and the region, and that none of the barriers to growth are insurmountable,” said Grant Thornton partner Wendy Hart summing up the half-day summit at the Penta Hotel.
The upbeat mood was confirmed by interactive surveys taken at the summit (see right) and by recent research undertaken by Grant Thornton in partnership with the Centre for Economics and Business Research (CEBR), Grant Thornton UK CEO Scott Barnes revealed.
The Grant Thornton sponsored ‘UK Business Confidence Monitor’ (BCM), in association with the Institute of Chartered Accountants in England and Wales, was currently at its highest since it began 10 years ago and recording its longest sustained period of rising optimism.
Barnes said a key aim of Grant Thornton’s nationwide summits would be to help companies, particularly mid-sized businesses (MSBs typically employ 50-499 people), to unlock their potential for growth.
“MSBs form a hugely important part of the UK economy, and we think their value is very much under-represented. Much is said about SMEs and large corporates but it seems MSBs struggle to create an identity. Our Agents of Growth campaign seeks to raise the MSB profile amongst investors, dealmakers and policy makers.”
Barnes noted that 67% of Thames Valley businesses surveyed don’t feel a sense of shared identity with other UK MSBs “Wouldn’t it be great if we had the equivalent in the UK of Germany’s vibrant Middlestand business sector? Would it help?” he queried.
“It’s your success (MSBs) that will help to drive growth and job creation, which will in turn drive the UK economy forward.”
Barnes pointed out that Agents of Growth research had shown that the UK’s 34,000 MSBs were already “more vibrant, more resilient, and more confident than businesses from other sectors.”
In recent years, MSBs had also outperformed small and large employers in turnover growth, productivity (18% higher than the UK average), job creation, and export growth, while making a significant £285 billion overall contribution to the UK GDP.
Since 2000 the number of MSBs has risen
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what individual customers require. Using new technology to provide that quality of service is crucial.
• Leadership that makes the most of available resources is required – moral courage being the pre-eminent leadership quality.
• “If you are not learning every day, then you are not making the best use of the days and potential that you have been God-given.”
“The most important part of what you do is what you can do with others, and that applies to governments, nations, and businesses,” Ashdown added.
Local views from an informed panel
Paddy Ashdown
by 11% (compared with +6% for small businesses, -17% for large businesses) Barnes highlighted. Other research showed key barriers to growth as: accessing finance, attracting and retaining talent, finding support for international expansion.
Summit keynote speaker Paddy Ashdown was equally praiseworthy about MSBs – “the real centre of gravity of the UK economy.” Having survived “the toughest economic circumstances of the past 30-40 years” most UK businesses now had a good chance of survival, something they should be proud of, he believed. “But, can you grow?”
Ashdown advised that UK businesses should carefully consider the opportunities and challenges of growth, in the light of:
• A totally globalised world. “Today there is no domestic affair that does not have an international dimension to it.” The capability to partner internationally or reach out globally is essential.
• The need to rebalance the nation’s economy away from financial services. “We will only survive in a highly competitive business world, if we are able to produce tradeable goods that are wanted across the world.”
• The paradigm business structure for today is the flat network model – which is not the vertical structure of hierarchical governments.
• We now operate in a bespoke age. The customer is king and we need to provide
So, what are the key factors that will help or hinder mid-market business growth?
Facilitating the event, BBC Breakfast business reporter Steph McGovern involved an attentive audience with the views of an informed guest panel (pictured): Charles Davis, head of macroeconomics at CEBR; Steve Lamb, Thames Valley Berkshire LEP chairman; Phil Smith, Cisco Systems UK CEO; Grant Thornton corporate finance partner Wendy Hart, and John O’Hanlon, Ridgeway Garages CEO.
Grasp the opportunities
Charles Davis suggested that, with business confidence growing, capital expenditure and growth investment would now increase. But, he felt the focus should be on foreign trading, especially with consumer spending currently driving the UK recovery. Disappointingly the research had revealed that only one third of MSBs have international operations, and only one in five plan international expansion – that being mainly in western Europe, not emerging markets.
John O’Hanlon said improved confidence was reflected in Ridgeway’s increased car sales. However, with consumers using Internet research, showroom footfall was down and businesses needed to provide compelling reasons for consumers to visit them. Customer contact, strong relationships and quality service were essential. Average today is not good enough. “We are now aiming to go from good to great.”
THE BUSINESS MAGAZINE – THAMES VALLEY – DECEMBER13/JANUARY14
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