More than nine out of ten (91%) business leaders in Scotland believe that the UK needs a comprehensive industrial strategy according to BGF’s Growth Climate Index – a survey of British business leaders and entrepreneurs.
However, three quarters (67%) want the Government’s proposed Industrial Strategy to direct targeted support towards emerging businesses and sectors (e.g. clean energy, robotics and biotechnology) compared to just 18% who believe that the Government should prioritise support for established business and sectors.
The findings point to considerable support for the principles behind the Government’s Industrial Strategy. Mine out of ten (91%) of business leaders agree that under certain circumstances, it is right for the Government to intervene in the private sector to support economic growth. A further 84% believe that the Government should focus on supporting SMEs specifically as it seeks to boost productivity.
While there is broad agreement on the principles, respondents are divided over whether further clarity on Brexit is more important for British business than an industrial strategy at this stage – 53% agree compared to 47% who disagree.
However, the evidence indicates that business leaders are overall feeling more positive about the outlook for growth. The results of the previous Growth Climate Index, conducted immediately after the Referendum vote showed that 68% believed that conditions would worsen compared to just 15% who expected them to improve. This has changed to 44% expecting conditions for growth to improve over the next quarter compared to 38% who expect them to worsen (18% don’t expect them to change).
When asked about their assessment of the past quarter, 38% believe that conditions for growth have improved over the last quarter compared to 20% who believe they have worsened (42% think they have remained the same). Again, this represents a significant change from the last Growth Climate Index conducted in July 2016 when 58% believed that conditions had worsened in the previous quarter compared to only 14% who thought they’d improved.
Patrick Graham, Investor, BGF in Scotland said: “The Government’s Industrial Strategy is enjoying strong support from the private sector but business leaders clearly want a break from the past. Rather than solely propping up established players and businesses at the top, there is a clear appetite for a new kind of Industrial Strategy which supports and energises growing businesses and sectors, but also recognises the role that smaller businesses can play in driving innovation and eliminating the productivity gap. This task will only become more important as we leave the EU and build a new trading relationship with our European partners, and indeed the rest of the world.
“Whilst uncertainty remains, this latest survey points to signs of cautious optimism and indicates that resilient British businesses are beginning to develop a positive and pragmatic vision of our future. I share this vision and BGF remains committed to investing in and supporting the UK’s most ambitious small and mid-sized businesses.”