November 2017 economic statistics: All the figures SMEs need to know
5 min read
04 December 2017
The Autumn Budget contained numerous announcements, including further investment for training staff and educating pupils. Our November 2017 economic statistics unveil why it couldn't have come at a better time.
Chancellor Philip Hammond used his Autumn Budget speech to alleviate some of the pressures felt by small businesses. While his drive to close the UK skills gap was an important one though, our November 2017 economic statistics round-up found it easily hidden by some of the meatier announcements.
A newly unveiled ten-year action plan, for example, would unlock the scale-up ambitions of SMEs. There will be a “doubling of EIS investment limits for knowledge-intensive companies, while ensuring it is not used as a shelter for low-risk capital preservation schemes.”
The government will also be piloting a 100 per cent business rates retention in London next year.
As important as these announcements were, the November 2017 economic statistics reveal, Hammond’s move to bridge the nation’s skills gap through a number of investments was desperately needed.
For starters, it came off the back of a CBI report, From Ostrich to Magpie, which set out how the UK could tackle its productivity gap. The nation was filled with ostriches – those that stick to what they know – the CBI laid bare, and this failure to adapt was largely what fuelled the gap.
Hammond made clear digital skills were necessary if the UK was to tap into new technologies. The need for such a focus was boosted all the more by the CBI’s claim that Britain persistently lagged behind European leaders in terms of digital adaption.
“In 2015, the proportion of UK firms adopting cloud computing was nearly 30 percentage points below Europe’s best performers,” it said. “Moreover, UK businesses underperform on the adoption of effective management and leadership styles relative to top performing countries.
“If the UK had more firms follow what successful ones already do, and fewer behaving like ostriches, not actively looking out for ways to improve, business and government could move the needle on sluggish productivity growth. It would also help close the gap between the ‘best’ and the ‘rest’ of businesses, as well as reduce the difference between the highest and lowest earners.”
In fact, McKinsey Global Institute suggested 55 per cent of labour productivity growth would come off the back of companies adopting existing best practice. The remaining 45 per cent, the CBI further pointed out, would be resultant of innovation creation.
The chancellor’s skills focus also comes at a time where Brexit negotiations have led to a “brain drain” of skilled labour.
“Higher skilled professionals are over-represented in the numbers of those emigrating, and firms are finding it harder to secure applications or acceptances of job offers from EU nationals for roles in the UK,” Sophie Barrett-Brown, head of UK immigration at Laura Devine Solicitors, opined in our November 2017 economic statistics piece.
“The Brexit vote is influencing people’s decision to migrate into and out of the UK,” she said. “Since the referendum there has been no change in EU free movement law and no material changes to the UK Immigration Rules driving this reduction, so the fact that fewer skilled people are coming and more are leaving is not due to greater control of migration, rather it reflects the personal choice of migrants.
“This growing brain drain of skilled labour is a real concern for British employers. Businesses tell us those leaving come from higher skilled backgrounds. It poses a real threat to the businesses and professions Britain relies on for its reputation as a world-leading, highly-skilled, creative, technological and innovative economy.”
So increasing the skills of Brits could further boost the UK’s reputation as a great place to do business, and remove the pressure of hiring the right talent from employers, giving them more time to focus on technology changes and ways to make current staff more productive.[rb_inline_related]