UK businesses still thinking big, despite the uncertain outlook
The business climate might be uncertain and the skills market set to alter dramatically. Yet AIB (GB)’s Steps to Growth 2017 survey shows that British firms are ambitious, with 87 per cent of respondents saying they want to grow their business.
Manufacturing appears the most ambitious sector, with 100 per cent of respondents saying that they want to grow. This breaks down as 73 per cent saying they have a strong appetite for growth and a plan in place to make that happen. The remaining 27 per cent are open to growth but don’t have a plan.
According to data from CIPS (the Chartered Institute of Procurement and Supply), UK manufacturing growth hit a three-year high in April. British businesses reported higher demand from clients in North America, Europe, Africa and Brazil, with the weaker pound keeping British products competitive.
Strategy and skills
“59% of manufacturing companies expect their turnover to increase by 21–40% in the next five years”
Of the manufacturing companies in the AIB (GB) survey, 59 per cent expect their turnover to increase by 21–40 per cent in the next five years. But this is dependent on a strong strategy from government, says Ann Watson, chief executive of Semta, the UK Sector Skills Council for Science, Engineering and Manufacturing Technologies. “The strategy needs to include strong, high-value exporting sectors like advanced manufacturing and engineering [AME] to succeed. We are already well placed as a potential global powerhouse in new battery technologies that will be crucial for future growth. A strong AME sector can also help to solve Britain’s productivity problem, with our higher-than-average GVA [gross value added] and turnover per employee.”
Research from EngineeringUK says the country needs 1.8 million more engineers and technically qualified people by 2025. “Skills are the crucial component for success in UK AME but we’re currently struggling with skills shortages,” Watson confirms. “We’re equipped and keen to help businesses in our sector grow their skills base as a way of growing their business. We know the appetite is there and that companies are actively looking for the right people. Last year over 72,000 job advertisements were posted for design engineers – more than the total number currently in employment.”
Organisations such as Semta are supporting engineering and manufacturing businesses by providing leadership in areas such as industrial digitisation and new technologies, as well as focused research such as its Engineering Skills for the Future report on diversity.
Busy times for healthcare
Healthcare is the second most ambitious sector, with 98 per cent of survey respondents saying that they want to grow. Of these, 89 per cent say they have a strong appetite for growth and a plan in place to make that happen, with 9 per cent saying they are open to growth but don’t have a plan.
One company confident of growth is Ingenica Solutions, which provides IT services to the healthcare sector in the areas of supply chain, procurement, inventory management and data management. “We identified a gap in the market for systems in the back office,” explains Nicola Hall, Ingenica’s managing director. “The government has cottoned on to the fact it doesn’t have enough procurement data and it can’t easily track and trace products. As budgets diminish, the NHS is looking to cut costs where it can and companies like Ingenica are well placed to serve this need.
“We see a great opportunity to grow on the back of government initiatives and also meet the needs of healthcare suppliers. Healthcare is always a challenge but if you’re in the right place at the right time with the right solution then that can make you fairly optimistic.” Ingenica also has plans to move geographically, Hall adds. “There are lots of government initiatives so we’re trying to get into the space in time for the rush.”
Other firms, like Cambridge-based Healthera, provider of digital solutions for patients to manage and reorder medication, also talk positively about public sector opportunities. “There’s a lot of support from the government to help companies like ours,” explains Healthera’s CEO Quintus Liu. “NHS England has made a callout to private companies in the industry for solutions that can potentially help the NHS relieve pressure in accident-and-emergency hospitalisation. We were one of five companies given £1 million to help develop these solutions.”
The company now serves 70 pharmacies, with another 80 lined up, and more than 3,000 patients. “We have national chains in the pipeline and lots of growth plans,” Liu explains. Crucial to this growth, he says, is “a great relationship with people in the EU. Our board has two members from the EU and our next market is going to be the Netherlands. We aim to bring more solutions before Brexit actually happens and help maintain the UK’s presence in the EU. Globalisation is essential for our growth.”
In these uncertain times, the ambition of the UK’s mid-sized companies will be key to driving the UK’s overall growth.