20 finance


How can we build a better world for our children to grow up in?


A comment from Norman Armstrong, partner at Grant Thornton’s Southampton office


The potential of a vibrant economy


• The UK lags behind other nations when it comes to productivity. If the shortfall can be bridged, GDP by 2025 would be £382 billion higher (in 2012 prices)


• An increase in exports to 45% of GDP over the next 10 years (by 2026), could provide substantial gains for the UK economy


• Sickness costs the UK economy £26.9 billion per year in lost output


• Overcoming the housing crisis would boost consumer spending in Great Britain by £1.2b in 2016 up to £6.5b in 2020 and £18.0b in 2025


• If housebuilding matched population growth in 2020, GDP would enjoy an £8.8b boost down to £2.1b in 2025


• Filling job shortages in manufacturing and construction, through apprenticeships and immigration could make UK gains of between £8.5b and £9.3b by 2025


• If GVA per worker in every region of the UK was the same as the rest of the G7 (except in London where it is higher) there would be significant economic gains


In these times of economic uncertainty, both in the British and global markets, I was heartened to discover there is real potential for the UK’s businesses, cities and communities to thrive during the next decade.


Frustratingly, despite this opportunity for growth, Grant Thornton’s research has revealed that less than half of UK businesses currently identify international markets as a potential route for increased income.


Grant Thornton has a well-earned reputation as a firm with purpose, and we believe there is huge untapped potential in Britain, particularly in this region.


By addressing some of the UK’s fundamental social and economic challenges collaboratively, we can create vibrant cities and communities where businesses and people can flourish.


To this end, Grant Thornton is conducting an 18-month long, nationwide inquiry into what it will take to build a vibrant economy. We plan to use the combined knowledge of our people, our clients and our networks to bring individuals and organisations together to develop the ideas and partnerships on which a vibrant economy will be built. The whole concept behind 'Vibrant Economy' is this idea that, for all of us in the UK, if we are going to thrive and pass on something better to our children’s generation, we’ve all got a responsibility to step up and drive the changes that are going to create growth and shape our environments.


Grant Thornton has established an independent commission which will steer a series of thematic and city-based inquiries, and this will be supported by a community who exemplify what it will take to build a vibrant economy; the Faces of a Vibrant Economy.


Facts from the Vibrant Economy study


Two external factors that can help British businesses reach their potential:


• Improved infrastructure (such as better transport links, broadband and location) topped the list of factors that were most important to business growth (82%)


• Improvements in employee health and access to healthcare could deliver a £6.2b boost to economic output by 2025


www.businessmag.co.uk


Three areas have been identified where I believe the most impact can be made to shape a vibrant economy. These are areas of credibility and strength for Grant Thornton, where its skills, connections, expertise and knowledge provide a great opportunity to contribute to sustainable growth:


1 Building trust and integrity in markets.


2 Unlocking sustainable growth in dynamic organisations.


3 Creating environments where businesses and people flourish.


The Vibrant Economy research has also shown that UK skills shortages are holding businesses back. If we were able to fill all the job vacancies that are left


THE BUSINESS MAGAZINE – SOLENT & SOUTH COAST – MAY 2016


Details: Norman Armstrong norman.armstrong@uk.gt.com www.grant-thornton.co.uk


empty due to skills shortages, we could provide a £8.9b boost to the UK economy in 10 years’ time.


Grant Thornton has worked with the Centre for Economics and Business Research (CEBR) and YouGov to identify a range of growth opportunities that UK businesses could make the most of.


A YouGov survey of 1,000 business leaders shows that businesses can do a lot themselves to help achieve this potential, particularly in terms of developing workforce.


A total of 70% said that their future success depended on attracting new talent, but only 54% of respondents believe development and retention of their current employees is important to business growth.


These results also indicate there is an opportunity for the UK’s businesses to boost their success by focusing on more than just profit. Research by the Edelman Trust shows that a business’ contribution to the greater good is the leading factor as to whether people trust that business.


And as we all know, whatever line of business we are in, building trust is paramount for the future success of any venture and the prosperity of our economy.


Only 27% of businesses place importance on having a positive impact on their local community or wider society, while 39% of businesses view transparency and good governance as a necessary part of success


A core group of around 15% of businesses in the UK said that the success of their business depends on: their impact on society, on the environment, the development of their employees and making profits.


This core group of businesses have higher than average growth forecasts: 88% said they had the potential to grow over the next 12 months compared to 66% of all businesses surveyed.


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