United Kingdom
Business will never be the same again - Peter Hemington
The UK business environment will never return to pre-recession normality, according to our latest research, Transitions. Despite this almost half (44 per cent) of board members that we polled thought that it would and that their business would not fundamentally change in the next five years.
Notwithstanding, Transitions warns that businesses need to transform themselves to adapt to a new world order that will emerge as economic performance improves, many executives clearly think that there will be a return to business normality in the next two years. However, our report demonstrates that the world is changing, and there’s a need for UK businesses to reinvent themselves if they are to survive.
The world has changed. After a decade of high economic growth as China and India began to integrate themselves into the world economy, the fundamental imbalances that this trend has created have derailed western economies. At the same time, technological change both threatens existing business models and offers opportunities to develop new routes to profitable growth for those that embrace it.
As a result, business will never be the same again.
Today’s businesses are built for a world where cheap goods are imported from low cost economies and where consumer, business and government spending have been financed by debt. And while digital technologies are now widespread, in reality their uptake has a very long way to go – this will continue to change the world massively.
We believe the next five years to 2015 will be precarious for many companies with high levels of uncertainty, risk and complexity. In this context, although we will see ‘recovery’, the word will have a new meaning and we will not see a return to the way things were.
BDO and our body of economic experts and research sources visualise the process as a series of transitions from the industrial structures, models and values of the past to the digital, global, networked age of the future. Over the coming months we will be delivering series of reports that outline a different transition:
- A realigned economic world order
- New forms of capitalism
- Effective regulation and governance
- Corporate cultures of creativity, innovation and challenge
- A permanent cultural shift in consumer attitudes and behaviours
- Reappraised and redefined sustainable development
Each transition will be narrated in depth in separate ‘transitions briefings’. These will seek to answer the question as to how boardrooms should respond to this crisis, as the tactics of ‘recession-as-usual’ are not sufficient for firms to weather the economic upheaval because it is no ordinary recession. Is it just a case of recession-as-usual: budget-paring, personnel-slashing, and portfolio-trimming?
What is required is an inventiveness that leads to innovation throughout the organisation; from new business models and propositions to new management structures.
Each transition report will provide further insights and also guidelines on how to translate the concepts presented into a specific actionable agenda.
If you would like to discuss BDO's Transitions reports and how we may be able to help your business, please contact Peter Hemington, Partner at BDO.