With the General Election voting day fast approaching and the release of party manifestos, emerging businesses are keen to see how each party propose to help UK businesses and if their policies are going to be favourable for business growth.
According to the latest Growth Climate Index, businesses believe that the most important areas for focus at the moment is on industrial strategy, the intervention of the government and the ongoing question of productivity. The survey spoke to 280 business leaders and entrepreneurs with the aim of measuring the confidence of the UK’s business growth environment.
Top of the list
The survey was conducted by the Business Growth Fund and was the first since just after the June 2016 Brexit vote. Of those surveyed, 88% said that the UK requires a comprehensive industrial strategy while some 77% also said they want to see the government’s proposal strategy back emerging businesses and sectors including clean energy and biotechnology. This is opposed to just 11% who want the government to prioritise support for the establishment business sectors and companies.
In fact, there is an overall approval among business leaders for the industrial strategy that the current government has formulated. 86% of business leaders think that under certain circumstances, it is a good thing that the government intervenes with the private sector – primarily to support economic growth. And 82% of those surveyed believe that the government should focus on SMEs in order to boost overall productivity.
One area that caused division among those who took part in the survey was Brexit. For example, 49% believe that Brexit is more important for British business than industrial strategy at this point versus 47% who think strategy is ahead of Brexit in importance.
One area around Brexit where opinions have changed is in terms of the outlook for growth. In the previous survey, just after the Referendum vote, some 72% said that growth would worsen versus just 12% who expected to see an improvement. Now, figures are more even with 38% expecting an improvement in growth, 33% thinking things would stay the same and 29% who think it will worsen.
Similarly, when asked about the last quarter and if conditions for growth had improved, 38% think things haven’t changed while 26% said things were worse and 36% think things have improved. This shows an improvement from the July 2016 survey when only 10% thought that conditions had improved.
Support for the government
Stephen Welton, chief of the BGF, said that there was strong support from the private sector for the current government’s industrial strategy, showing that business leaders wanted a break from the past. They approve that the government has moved away from just supporting established companies and the biggest names in any industry and instead helping emerging businesses. Leaders also approve of the new acknowledgement of the importance of smaller businesses in driving innovation and helping to eliminate the productivity gap.
He went on to highlight the fact that this will become more important as we leave the EU and build a new trading relationship with European partners and those around the world. He confirmed that the survey shows a cautious optimism in business leaders and that companies are starting to have a positive and pragmatic vision of the country’s future.