To be fair, 2024 has not been short of reasons why businesses might take umbrage with the wider UK economic scene.
Among them are the increases in employer national insurance and wider business costs set against a lack of detail on the new government’s much-vaunted economic growth mission; the weak state of the UK infrastructure that businesses so rely upon; tight labour markets and ongoing skills challenges; an anaemic growth rate; and uncertainty around global trade and climate change rules.
With the Government hopefully resetting the foundations and confidence for economic growth, there are four themes in particular that will have a major impact on the region’s and country’s prospects over 2025.
Capital investment
Private sector money, government money, pension fund money – all is welcome in the need to improve our faltering infrastructure and invest in our businesses. The prime target will likely be shiny new scale-ups in life sciences or tech, with the investment money coming from venture capital or private equity seeking larger rewards in return for larger risks.
However, equally valid will be investment in the untapped growth that describes so many of our solid SMEs that are the heart and soul, of UK plc. They too need funds to take their businesses to the next stage.
We also need investment to improve our region’s transport infrastructure. As I’ve said before, this is not just a ‘transport’ issue, but fundamental to improving economic growth, social mobility, cohesion and achieving net zero. Business West will be pushing for all such investment.
Global Trade and export
Export has been, for far too long, too low on successive governments’ agendas. Already since Brexit, exports from the UK have struggled and the looming threat of Donald Trump’s increased tariff regime, and the expected counter measures, could well stifle global trade.
It could get very complex, very quickly. Our trade experts are watching closely and, as ever, Business West will be guiding those trading internationally through it.
Artificial Intelligence
It’s here… and whilst AI may not take your job, or your business, someone who can better leverage the technology will. Transfer of AI technology expertise into UK workplaces is going to play a huge role in improving the UK’s workplace productivity.
At Business West, we are rolling out training to staff to ensure they are well equipped to take advantage of this technology. We are also exploring how AI, and other related technologies, can create greater value not only for us, but also for the businesses that we support.
Devolution
Many governments historically have grazed their knees on local government reform. The current strategy to devolve more and more out of Westminster to the regions is laudable but requires careful planning.
With the government’s tepidness about regional powerhouses like Western Gateway, and Mayoral Combined Authorities (MCAs) sparse on the ground in Southern England, I do fear potential, albeit temporary, two-tier devolution arrangements.
This could see the proud shires of Wiltshire and Gloucestershire either being shot-gunned into marriages with other shires, or falling behind the resources and powers being made available to the metropolitan MCAs. It will also be all-change at the West of England Combined Authority, as a new Metro Mayor will be ushered in, next spring.
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