Innovation could be the light on the horizon for UK businesses, and it could be digital
The cocktail of challenges UK businesses currently face means if ever there was a time for thinking innovatively, it’s now. And with the Government’s new Digital Strategy to make the UK into a “global tech superpower”, there is a definite tech emphasis businesses are being encouraged to explore.
The word “digital” might be intimidating for some but embracing innovation could uncover new areas of growth for your business. Whether it’s using digital to improve your technology, facilitate smarter operation, gather useful data, or build trust in your brand – it could be the key to enhancing your offer and unlocking new value.
The digital light on the horizon
The Government’s new Digital Strategy is driving the pressure for businesses to rethink, remodel and revive, capitalising on the already strong position of the UK as a digital leader. More than £12 billion in venture capital funding was secured by UK tech start-ups this year alone, putting us just behind the US and ahead of China on funding secured by tech start-ups.
Tech Minister, Chris Phil, at the recent London Tech Week, unveiled the Government’s plan to grow the economy and create more high-skilled, high-wage jobs, via a unified roadmap for digital tech infrastructure to drive the innovation that, it is hoped, will benefit the whole of the UK.
£23 million for jobs and a New Digital Skills Council
There will be £23 million for jobs in AI and science, and tech leaders will come together in a new Digital Skills Council to tackle the skills gap. Industry leaders and training experts are planned to come together, from Starling, Amazon Web Services and Multiverse to work with employers and encourage investment in employer-led training to upskill workforces.
The launch of the Digital Strategy is great news but don’t limit your capacity for innovation to just that. Apply innovative thinking across your whole operation; get clear on realities, think about cost transformation, or sustainable supply chains. This, alongside adopting better use of digital, will take your business forward.
Unprecedented pressures on businesses
The UK economy shrank by more than 0.3% in April this year, after already falling 0.1% in March. Financial markets around the world have dropped into the red and there has been the sharpest rise some of us have ever seen in inflation. Soaring costs of supplies and energy are stunting businesses in every sector, while public spending, due to pressures on household budgets, is near a crisis point.
There’s no doubt that it helps to be realistic when it comes to the challenges our economy is facing. Some think recession is likely whilst others have a more positive outlook, but one thing is certain – it’s wise to proceed thoughtfully and cautiously.
Limiting factors still prevail – planning is crucial
Shortages of key materials, continued supply chain disruption, surging energy costs, and further interest rate hikes all continue to limit growth and confidence.
The three main sectors: service, industrial production and construction all shrank for the first time since January 2021. Manufacturing has suffered due to high fuel and energy costs, reducing production by 0.6%. Even construction has fallen, by 0.4%, after good growth seen from storm repair activity in February.
The rise in interest rates, consumer spending, and cost of materials are a complex cocktail of issues that directly affect day-to-day functioning as well as long-term survival and growth. Though they be interrelated – detailed planning is vital to success.
Transforming costs for continued growth
The biggest challenge businesses face is ensuring their model of costs enables them to continue operating at a healthy profit. This is causing many businesses to look at suppliers and their supply chains, considering a switch to more resilient models that hold fewer resources, rely more on local producers and are more sustainable.
Ensuring digital safety and security
Businesses are being urged by the Government to increase their cybersecurity, with new data showing a third of UK firms suffer a breach every week. It’s no longer a case of just installing anti-virus software and thinking everything is ok. Attacks are becoming more sophisticated, highlighting the need for education and culture change for businesses so they and their employees can stay safe.
It was never a case of ‘going back to normal’ and consumers want to see that businesses can still serve them safely and appropriately should a further wave of the pandemic hit. Businesses that have put semi-permanent operational measures into place, and workable contingencies, stand a better chance and gaining consumer trust and brand integrity in to the bargain.
The Net Zero Strategy affects every business, compelling the drive towards decarbonisation. A business that can remodel to take account of sustainability issues too is thinking on its feet, and, particularly when it comes to cost-transformation, is a well-placed long-term strategy.
It’s a lot to think about – net-zero, covid confidence, cost transformation, digital safety – but by continually assessing your business model against these external pressures and being solution focused, you can have a truly adaptable and agile business.
One key point to remember – keep your accountant involved, wherever possible. As the Government continues to introduce measures that influence the overarching tax model, tax strategy and innovation have never been more important.