Firms ‘are missing out on untapped growth potential’Sep 17, 2018
However writes Fiona Baldwin, Grant Thornton’s practice leader in Milton Keynes, a new study reveals that local companies have yet to reach their full potential. If this can be achieved, the region could become a major engine of growth within the UK economy.
Grant Thornton’s latest Planning for Growthresearch found that if businesses in Milton Keynes and across the South East can overcome current barriers to growth and exploit opportunities, they could add more than £10 billion to the local economy in 2018.
The South East economy plays an important role the UK’s overall fortunes, representing 15% of total national GVA in 2016, second only to London. However, the rate of GVA growth was the second lowest in the country at 2.5%and at its lowest level since 2011.
- Pictured: Fiona Baldwin
- So, what is holding local businesses back?
The ongoing Brexit negotiations are a key factor with over a third of firms (35%) questioned highlighting how uncertainty was making leadership teams more risk adverse.
Changes in legislation and the wider economy (GDPR, currency fluctuations and interest rate rises) as well as local issues from transport and infrastructure to the skills shortage also present their own unique obstacles.
The big question is therefore, how do local businesses overcome these challenges?
Our research shows successful, high growth companies are focussed on four areas. The first is ensuring every member of their team understands and embraces the company culture. People are at the centre of every organisation and creating a sense of purpose where every employee feels valued drives motivation and performance.
Investment, particularly in top line growth, is also key yet only 3% of UK businesses made strategic investments in 2017. This is down from 70% over the previous five years suggesting firms have become more cautious, perhaps waiting for a clearer picture to emerge of the future shape of the UK economy.
Embracing technology to streamline systems and processes is the third decisive factor. The modern world is constantly changing but it is proving difficult for many firms to adapt with more than half citing technology as a growth inhibitor (47%) rather than an accelerator (34%). Companies will need to overcome this mindset to keep pace with competitors and maximise the benefits new technologies can bring.
Finally, strong connections with other organisations was seen as central to achieving growth. We certainly echo this and believe that by getting all sectors of the local community to work together, from private and public, to local government and not for profit, we can help shape a vibrant, progressive and productive future for Milton Keynes and the wider region.