Power Up: UK business has been saved
Power Up: UK business
Collaborate to boost UK growth
The UK economy has proven its resilience many times throughout history. But we cannot take this ability for granted. It is critical that the UK remains competitive, that we retain our strength in innovation, and that we develop and attract the skills our economy needs so that we can achieve inclusive growth and prosperity for all.
Power Up: UK business is the second in a series of insight reports that explore topical challenges facing the UK government and businesses.
How can collaboration between institutions and businesses large and small drive growth in a post-Brexit world?
UK businesses are facing many challenges which include, but are not limited to, the uncertainty around Brexit. Traditional trading relationships are becoming uncertain, immigration policies re-examined and the global business environment is shifting. For the UK to prosper in these conditions, collaboration is essential to both boost innovative capabilities at home and help UK businesses to access opportunities in foreign markets.
This report draws on crowdsourced sentiment data gathered from over 500 young dynamic scaleups via Deloitte Pixel, as well as analysis of currently available economic data on trade relationships.
We examine the issues, pitfalls and the three key actions that the UK government and businesses large or small need to consider now, to be fit for the future:
Strengthen and develop relationships with non-traditional trading partners
- Prior to the EU referendum, the EU was by far the most popular market with 74% viewing it as one of the most attractive markets for overseas growth.
- Brexit has resulted in a sharp fall in its attractiveness, with just 35% now rating it in the top three markets for growth opportunities.
- Post the referendum, the US has overtaken the EU to become the most popular market for the UK’s aspiring scaleups looking to expand overseas. 52% of respondents rated it in their top three markets for growth opportunities.
Although the EU will remain an important market for UK businesses, the result of the EU referendum serves as a reminder of the substantial trade opportunities that exist beyond the EU. UK businesses will need to strengthen relationships with the US, and further develop them in less familiar markets such as China.
To find out more, explore our interactive map below.
Commercialise innovation more effectively throughout the UK economy
The UK is a world-class idea generator with a thriving startup scene. However, that innovative culture is less prevalent in mature established businesses. Government needs to design funding and policy incentives to address funding gaps and systemic sticking points that obstruct innovation. Businesses need to understand the implications of technology on their business and wider industry. They should design a model of experimentation that allows freedom to explore innovative, high risk projects while protecting core operations.
Build a culture of collaboration between corporates and scaleups
- Scaleups consider themselves to be self-sufficient in achieving future ambitions, 56% did not plan to seek any external support.
There is a big opportunity for corporates and scaleups to form mutually beneficial partnerships, which have the potential to boost productivity and competitiveness. To allow this, corporates need to become more comfortable with managed risk, and our research shows that scaleups need to be more open to feedback to develop their products. There are many means of collaboration and partnership; choosing the appropriate type to meet specific objectives is crucial.
Untapped potential for UK exporters
Traditionally the strength of the UK’s economic relationships has been founded on shared history and/or geographic proximity. Whilst Deloitte believes that the EU will remain an important market for UK businesses of all sizes, we should seek to build economic relationships with less traditional markets such as China, which has a large market and represents opportunity for UK exporters.
Use the interactive map below to explore the opportunities for UK exporters.
Share of GDP
To do list:
|Corporates should seek to collaborate with aspiring scaleups who can complement their capabilities and help stimulate the innovation that they are unable to achieve in-house.|
|Corporates should streamline the processes that early stage businesses are subjected to during procurement to make it easier, cheaper and therefore more appealing for young businesses to work with them.|
|Aspiring scaleups should target partnerships with corporates who share their vision, can help them develop their offering and are able to connect them to bigger consumer networks.|