It should be said that while the UK’s present domestic challenges fade pretty quickly in the wider context of the recent natural disasters that have beset other nations this year, nonetheless the UK’s Chancellor George Osborne did have his work cut out trying to eke out any sense of an effective economic growth strategy for the UK this year.
The UK’s first quarter statistics have yet to be published but in my capacity as Xero’s self-appointed UK economic pundit, was I able to plug company formations statistics for January & February into my December data and I’ve just spent ten minutes colouring in this pretty chart – click it to zoom.
The UK’s growth challenges are not inconsiderable and while the volatility and wild statistical lunges of 2008 and 2009 were replaced by a more placid set of numbers in 2010, the eventual blending out and weaning off of the government’s emergency recessionary medication now appears to be biting down hard. GDP growth slipped in Q4, unemployment is still trending painfully high and, notably, the number of UK company formations appears uncharacteristically flat in this first quarter.
The UK’s private sector is much the same as those found most mature, developed economies in that it is almost entirely composed of small businesses, and so it’s those millions of small businesses that will have to get their shoulders behind any drive back into prosperity regardless of Osborne’s budget announcements this lunchtime. There’s only so much a government can do fiscally to drive growth. Precisely how the UK fares in the next ten years will no doubt bear out some correlation to stimulus resulting from the widening UK regulatory and tax simplification along with other commercial Startup Britain friendly initiatives. They in themselves won’t be sufficient to enable the UK to hustle itself back up the economic and productivity rankings in Europe, let alone the rest of the world.
For me it was Osborne’s big picture talk today was most the insightful; UK businesses require more than tax breaks. They require a wholesale re-imagining of what it means to be a prosperous, competitive and profitable British business in today’s globalized economy. That’s a huge gauntlet thrown-down.
Speaking as a Brit both personally and professionally, I’ve never had more belief or been more buzzed about the possibilities of the next ten years. In spite of my perplexing chart – and, frankly, you should never drive looking out the rear window – the opportunities for prosperity in the UK are immense. Whether that’s partly driven off the back of a revolution in operational agility or ever sharpening acuity of financial affairs with the help of great technology like Xero, or just seizing new opportunities to reposition your business in a wider regional or even global stage, now is that time.
George Osborne’s budget today can’t do it all and that means self-belief is going to be the critical ingredient if we are to block out the pain of change and transformation.
I’m a believer; my shoes are off.