Businesses in the South West have the potential to tap into an extra £4.9 billion GVA in 2018 if they can overcome key barriers and exploit opportunities, according to a new report from Grant Thornton UK.
The Planning for Growth report found that across the UK the potential GVA to be unlocked amounts to a staggering £72.5 billion, which could translate in to 1.4 million jobs. With the UK economy expected to grow just 1.5 per cent in 2018, missed growth could prove game-changing.
South West businesses have a strong record of generating GVA growth, with a 4.3 per cent increase in 2016 – the second highest rate of improvement in the UK behind London (4.4 per cent).
Tim Lincoln, practice lead for Grant Thornton in Bristol, said: “The challenge now is for South West businesses to build on their impressive growth in 2016 and capitalise on the momentum. To create a vibrant economy, every region needs to be firing on all cylinders and the South West – with its spread of sectors from financial services to tech to tourism and leisure – has a vitally important part to play.”
Grant Thornton’s research found many positives for the South West. Looking at key areas to drive growth such as people and talent, use of technology, and brand and marketing, the region’s businesses emerge ahead of the national curve.
Skills are a key differentiator for businesses, with 62 per cent of the region’s businesses who identified this as an accelerator for growth confident in their ability to leverage talent and skills, outperforming businesses nationally at 55 per cent.
A higher proportion of South West businesses also see technology as an accelerator (30 per cent) than as a barrier (25 per cent) – bucking the national trend.
What’s more, South West businesses are confident over brand and marketing, with 34 per cent regarding it as an accelerator.
However, only just over half (52 per cent) of South West business leaders are confident that they will achieve their growth plans for the next three-to-five years, with nearly four in ten agreeing that political uncertainty is inhibiting growth.
The impact of this uncertainty has reduced the level of investment for growth over the last couple of years. Only nine per cent of South West firms have made their most recent strategic investment in revenue growth in the last year, while for 82 per cent of companies the investment came three-to-five years ago.
Tim added: “While political uncertainty has not been identified as the biggest challenge for businesses, a definite drop-off in recent growth ambition is discernible, although businesses do still harbour growth plans for the future. The key is to take advantage of opportunities that present themselves and overcome existing challenges identified, without taking on too much risk
“We believe that if more UK businesses adopt a Growth Generator mindset, we can unlock the UK’s full growth potential and the private sector can lead the way in shaping a vibrant economy. The signs are that businesses in the South West are punching their weight in the UK – but there is scope to do more and move nearer to claiming that £4.9 billion prize.”