In 2017, like the previous year, businesses have had to show that they are resilient to surprise results. For much of 2017 the word on everyone’s lips seems to have been ‘Brexit’, and a review of the year would be incomplete without mentioning it. Just as the crucial Brexit negotiations were coming up fast we had a hastily called general election. In addition to the significant domestic challenges we were facing, the lack of a government with a majority undeniably created yet more uncertainty.
Most of the companies I’ve come into contact with here in Lincolnshire and wider afield breathed a huge sigh of relief that the UK and European Commission reached agreement on phase 1 issues.
They’ve also welcomed the announcement that EU leaders have agreed to move the negotiations onto phase 2. It doesn’t mean the hard work has all been done, far from it, but it does mean we are now very close to discussing transitional arrangements and our future trading relationship with the EU.
As we approached the end of 2017 we had a fairly lacklustre Budget from the Chancellor, and the Industrial Strategy that has been hailed as the government’s grand ambition to turn around the UK’s woeful productivity. The measures in the Industrial Strategy could be the beginning of a bold, new approach to the economy, but only if what has been announced is followed through, not just in this parliament, but over many parliaments to come. Now more than ever, the public and private sector need to join forces on this long-term vision that targets all dimensions of the UK economy – people, place and business. The IoD recently published new figures, showing the scale of the productivity challenge facing the UK.
A major issue for us in 2017 was our campaign to increase awareness of mental health challenges in the workplace, which we’ve referred to as ‘the last business taboo’. In March our own surveys and statistics from OECD suggested that poor mental health costs the UK some 5% of GDP. We’ve argued that mental health is a business issue on a par with physical health and safety, and that increasing awareness of mental health across the business landscape could play a key role in addressing Britain’s ‘productivity puzzle’. As our report ‘A Little More Conversation’ was delivered, we also witnessed Prince Harry and Theresa May also opening up about the subject.
So, what might we look forward to in 2018? For a start, the Brexit negotiations will be difficult and challenging. But what else?
A recent survey of our members revealed that investing in digital and physical infrastructure are companies’ top priorities for government action. But business leaders also say they must make better use of technology in their firms, improve organisational efficiency and boost skills and training in order to tackle the productivity challenge.
Given the ongoing criticism of the power and influence of internet giants it’s entirely likely that new regulations will be introduced.
The ‘gig economy’ gets a bad press, with frequent stories about Uber and Deliveroo. But what’s being missed are the fantastic opportunities that digital work platforms such as Freelancer, Upwork or TaskRabbit can offer businesses and workers. There are benefits to companies that can get this right. The gig economy lets you access talent from around the globe, 24/7. We’re moving away from a 9-5 working day and, for businesses, this means constant progress and production. As for workers, they are given the choice of what jobs to do and can access a global pool of employers.
There’s likely to be continued limited growth in pay packets and a straitjacket on consumer spending. For the time being, the Bank of England’s mantra on interest rates should be ‘lower for longer’. It’s absolutely vital now to keep the cost of credit low whilst households are squeezed and businesses navigate ongoing investment uncertainty.
Finally, we can expect a rapidly rising demand for electric vehicles, more applications for artificial intelligence, increased use of facial recognition and further developments in digital health monitoring and robotic surgery.