𝙀𝙘𝙤𝙣𝙤𝙢𝙞𝙘 𝙚𝙫𝙚𝙣𝙩𝙨 𝙘𝙖𝙣 𝙖𝙛𝙛𝙚𝙘𝙩 𝙧𝙖𝙩𝙚𝙨 𝙤𝙛 𝙚𝙣𝙩𝙧𝙚𝙥𝙧𝙚𝙣𝙚𝙪𝙧𝙨𝙝𝙞𝙥 𝙖𝙣𝙙 𝙨𝙝𝙖𝙥𝙚 𝙩𝙝𝙚 𝙙𝙚𝙢𝙖𝙣𝙙 𝙛𝙤𝙧 𝙡𝙤𝙘𝙖𝙡 𝙚𝙣𝙩𝙚𝙧𝙥𝙧𝙞𝙨𝙚 𝙨𝙪𝙥𝙥𝙤𝙧𝙩
The economic cycle can affect entrepreneurship rates. The 2022 GEM survey for the UK found that the market uncertainty caused by macroeconomic policy mistakes of the UK government in 2022 had compounded the challenging economic environment caused by the Covid-19 pandemic and Ukraine War. A visible reduced interest in starting a business amongst the UK adult population was evident. The research also showed that the UK’s fall in entrepreneurial spirit in 2022 was comparable to previous periods of economic uncertainty like the 2008 global financial crisis and the early months of the COVID pandemic in 2020.
One thing that I’ve been part of has been the 𝗽𝗶𝘃𝗼𝘁𝗶𝗻𝗴 𝗼𝗳 𝗲𝗻𝘁𝗲𝗿𝗽𝗿𝗶𝘀𝗲 𝘀𝘂𝗽𝗽𝗼𝗿𝘁 𝗱𝘂𝗿𝗶𝗻𝗴 𝗮 𝗰𝗿𝗶𝘀𝗶𝘀 𝗼𝗿 𝘁𝗶𝗺𝗲𝘀 𝗼𝗿 𝗺𝗮𝗷𝗼𝗿 𝗰𝗵𝗮𝗻𝗴𝗲 𝗶𝗻 𝘁𝗵𝗲 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗲𝗻𝘃𝗶𝗿𝗼𝗻𝗺𝗲𝗻𝘁.
The types of services and needs that come to the fore, and can help save businesses or reduce the negative economic impact of an economic crisis or shock include:
𝗣𝘂𝘁𝘁𝗶𝗻𝗴 𝗺𝗼𝗿𝗲 𝗿𝗲𝘀𝗼𝘂𝗿𝗰𝗲𝘀 𝗶𝗻𝘁𝗼 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗮𝗱𝘃𝗶𝗰𝗲 𝗮𝗻𝗱 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁. Many businesses don’t know where their finances are at, and how resilient they are or how they can reduce risk.
𝗛𝗲𝗹𝗽 𝘄𝗶𝘁𝗵 𝗿𝗲𝗰𝗿𝘂𝗶𝘁𝗶𝗻𝗴 𝗮𝗻𝗱 𝗿𝗲𝘁𝗮𝗶𝗻𝗶𝗻𝗴 𝘀𝘁𝗮𝗳𝗳. The economic costs and fall out from lay offs or recruitment freezes can last for years for a local economy. Try to create grants, stimulus or help with this for businesses.
𝗥𝗮𝗽𝗶𝗱 𝗿𝗲𝗱𝘂𝗻𝗱𝗮𝗻𝗰𝘆 𝗿𝗲𝘀𝗽𝗼𝗻𝘀𝗲. A redundancy situation can often release skilled workers that another employer needs. I’ve seen this happen a lot in the past 25 years.
𝗠𝗮𝗿𝗸𝗲𝘁 𝗮𝗻𝗱 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗱𝗶𝘃𝗲𝗿𝘀𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻. Businesses may experience part of their market contracting rapidly and need help to diversify their customer base.
𝗔𝗰𝗰𝗲𝗹𝗲𝗿𝗮𝘁𝗲 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗱𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁 𝗮𝗻𝗱 𝘁𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻. Sometimes the best decision for a business to make is to transform their productivity or use of technology. Economic crises can lead to decisions by businesses to transform more rapidly than they would have otherwise done.
𝗙𝗶𝗻𝗮𝗻𝗰𝗲 𝗮𝗻𝗱 𝗹𝗼𝗮𝗻𝘀. This can be vital if provided to commercially viable loans or finance needs that banks are not willing to support due to corporate policies or changing risk appetites. They still need significant due diligence – as the covid loans experience shows, this kind of intervention is vulnerable to fraud or default.
5. Beyond slogans: a grown-up conversation about UK industrial strategy (Article 5 of 5 on industrial policy)
The preceding four articles have sought to build perspectives on the role of industrial development in local and regional economies. In this final article. I tie this together by looking at the role of industrial policy and strategy. The perennial question for the UK:...
