to unlock the £26bn productivity opportunity, and the determination and desire are certainly there to do it, but it must be achieved sustainably. This is why resilience is so vital to our future.

Building in resilience

“The last 12 months have been the most challenging that our industry has faced and with our successes interwoven into trade relations and the flow of goods across borders, resilience needs to be built into the network.”

While financial services, utilities and manufacturing have levels of resilience above the UK average, construction and services industries have lagged behind the national average consistently since 2001. Agriculture is the only sector to lose overall resilience during the 20-year period, according to the research.

Across the parts of the economy studied, the story of resilience appears to be linked to wider economic challenges and the confidence that those running companies have in making long-term investments.

areas of manufacturing are showing business resilience, others are more fragile

All sectors lost resilience immediately after the financial crash in 2008 and subsequent recession in 2009 and again in 2016 following the Brexit referendum decision.

While the economic shockwaves from both the implications of the UK leaving the EU and COVID-19 lockdowns is largely unknown, it has placed business resilience – from supply chain to technology, to skills

The study shows that while many key

The Index examined three broad areas: plant, process and people

and training – under the spotlight. Botfield added: "The idea of resilience within a business isn’t just having cash in the bank to weather the storm, it’s investing in the latest processes, equipment, products and ways of working as well as having protected, highly trained, well equipped and motivated people. Building resilience into organisations is likely to be a legacy of the COVID-19 pandemic and, for the UK, Brexit cross-border trade, and will see companies sink or swim in this sea change of business operations.”

The Index examined three broad areas: plant (business investment), process (productivity) and people. Reports exploring each of the areas separately will be released over the next few months.

Plant (Business Investment) While the Index unearthed the financial opportunity for the UK of increased resilience, it also paints a mixed picture of increases and decreases across various measures. These show how sectors have tracked over time when it comes to resilience and often show how inputs (such as investment) may not necessarily match up with outputs (such as productivity) generated. An example of

one such input is business investment. Business investment per hour increased 77% over the past two decades within manufacturing (more than any other sector and equal to £7.4bn of additional investment in 2018) making it by far the biggest driver of resilience within the sector. This investment was even higher in chemicals and engineering & vehicles categories. However, growth has not always been consistent – post the financial crash, manufacturing saw a bigger dip in investment in 2009 than any other sector and took five years to rebuild.

Process (Productivity)

Overall, the second biggest driver of resilience has been productivity gains, with a 40% improvement in output per hour since 2001. This is reflective of where effort historically has focussed on improving operational efficiency during the era of shoring and globalisation.


While many companies have often overlooked people as a form of resilience, there is extensive discussion on how businesses should look to build future resilience. People improvements have also driven resilience but to a lesser extent than plant and process. This area has increased just 20% over the past two decades.

Additional data from the Q4 2020 Red Flag Alert from Begbies Traynor confirms that sectors with the highest increases in resilience, such as manufacturing, are experiencing slower rises in significant financial distress. Whereas sectors with the lowest increases in resilience are experiencing the biggest rises in financial distress. In 2020, the number of construction businesses suffering from significant distress increased by 27%, while those in the support services sector increased by 28%. A slightly lower increase of 23% was recorded in the manufacturing sector.

Left: The Resilience Index shows the impact of events such as the financial crash and the Brexit referendum

RS Components


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