In 2018, UK businesses could leave up to £72.5billion of untapped growth on the table. Companies need to become purpose-driven, invested in top-line growth, tech confident and networked to unlock their growth potential. In the South East alone, this translates to £10billion, measured as GVA.
Our research, Planning for Growth, also unveiled a sustainable high-growth group of businesses that nationally achieved 20% or more in growth in 2017 – and sustained growth for the past three years. These Growth Generators are almost five times more likely to be achieving their one-to-two-year growth targets than the rest of the market. And they are also nearly 10 times more likely to reach their targets than low-to-no growth companies. On top of this financial performance, Growth Generators share a growth mindset based on four key characteristics:
- invested in top-line growth and willing to seek external funding and engage in M&A activity
- tech confident
However, with the rate of expansion at its lowest since 2012 – 1.7% in 2017 – what is holding back growth in the private sector?
Technology acceleration and disruption have become the new norm. So it’s not surprising that our research found many UK businesses rank technology not only as their number one accelerator (37%), but also their number one barrier (38%) to growth. However, only 55% of business leaders who chose technology as an accelerator believe their leadership team has the ability to harness it as a tool for growth, and only same percent believe their leadership have the ability to overcome technology as a barrier. Given this large capability gap, it’s no wonder technology is also cited as the top investment area for all businesses.
With only 29% of Growth Generators ranking technology as one of their top five barriers to growth, and the average business having technology as their top investment area, it’s clear business leaders are ready to unleash the potential that technology holds. And of those that did select it as a barrier to growth, 63% were confident in their ability to overcome it.
Oxford-based Wendy Hart, partner in our technology team, says: “The first companies in a market to tech-enable their businesses tend to be disruptive and see an uplift in their perceived value. For management, a clear understanding of what it is they’re seeking to achieve through the application of technology, be it back-office or customer-facing systems, will help ensure a clear brief to technology vendors and consultants and reduces the risk of expensive mistakes. Seeing technology as a core part of the business strategy and not a cost centre is a first step in embracing its potential to unlock growth, and one which can pay dividends.”
For a business pursuing ambitious growth plans, technical agility is crucial to future-proof for tomorrow’s needs. Consider how your technology decisions may affect your business in the future, how your technology model affects the market value of your business, and your solution’s ability to grow with you. Even in uncertain times, private sector companies have a large degree of control over their own destiny. Ambitiously thinking like Growth Generators is key to unlocking the full growth potential of the UK economy.
Read more at grantthornton.co.uk/en/insights/growth
Any queries, please contact Sarah-Beth Hutchins