19 Mar 2018
New research from leading business and financial adviser Grant Thornton UK LLP (“Planning for growth in Scotland”) has identified that Scottish businesses could leave up to £4.3 billion (£4,336,253,750) in untapped growth potential on the table in 2018.
Based on a survey of 114 Scottish businesses with turnover between £10m to £1bn, and supplemented with qualitative in-depth interviews with senior business leaders, the report identifies an array of barriers to growth for companies in Scotland, which if surmounted, could unlock an estimated £4.3bn in gross value add across the economy. Comparatively, this equates to creating a new economy larger than Renfrewshire. (GVA 2016: £4.05bn).
Whilst UK business optimism has been on a downward trend since the months leading up to and following Britain’s referendum on EU membership, the research suggests Scottish business remain focused on future growth. 70% of respondents plan to maintain current levels of growth in the future, above the UK average of 61%, while 50% are looking to invest in technology (UK average: 50%), and 39% plan to increase international collaboration and networks (UK average: 41%).
While a majority of Scottish business leaders plan to spend on new technology in the next two years, investment in that area is also the biggest concern, with 38% describing technological investment as a potential barrier to future growth.
Only 22% of respondents told us they plan to invest in a dedicated Brexit strategy, compared to 24% across the UK. However, the debate over free movement of people and goods post-Brexit appears to have influence another major future growth concern, with 37% of Scottish respondents telling us access to skills and talent could hamper their long-term expansion plans.
The top five barriers to growth were:
Andrew Howie, Grant Thornton UK’s Managing Partner in Scotland, said:
“Scotland’s business community has clearly been unsettled by the outcome of the Brexit vote and the limited information on future trading relations with the EU and other global economies. But, while confidence may have taken a knock, our research suggests access to skills and investment in technology remain at the forefront of their concerns.
“It’s encouraging that 70% of Scottish business leaders plan to maintain current levels of growth in the next two years, which reinforces the sense of resilience driving the success of Scotland’s vibrant economy. Many obstacles are on the horizon. But by working more collaboratively, strategically and with purpose, our rich and varied business community can contribute even greater growth – and shape a successful, sustainable future for the country.”
The report also identifies a cohort of businesses that have achieved at least 20% annual turnover growth in the last year. Dubbed the ‘Growth Generators’, the businesses have four unique characteristics which set them apart from their peers. They are:
Greenock-based PG Paper is one example of a business on a sustained growth journey. CEO, Poonam Gupta, believes the secret to their success is working as one team, focused on shared goals:
“I think it’s really important for any business, not just ours, to communicate the purpose clearly, internally and externally. I would say particularly internally because then the whole team is working towards the same goal and the same vision that has been set out for it. Ultimately, if everyone knows what they’re working towards, their jobs get easier, and they have clear targets on what they need to achieve. Externally, I would say exactly the same. We work with a lot of companies around the globe and it’s important to tell them what we are about and where we are headed.”