By Marcus Leach
British businesses predict steady growth, an increase in real GDP and an improved business landscape over the next decade.
However, they also expect foreign ownership of UK companies and assets to increase, according to the ‘Business in 2021’ research.
The research in which 664 business leaders were surveyed on the conditions they expect their businesses to face in a decade, by Barclays Corporate, found respondents generally positive about the UK’s long term economic prospects, with half expecting the UK to be a better place to do business in 2021. Just 29% expect UK business conditions to deteriorate and a further 13% expect conditions to be similar to today.
Views vary significantly between regions however, with more than two thirds of respondents in Northern Ireland, Scotland and the East Midlands all positive about the future, compared with just 44% of London companies. Businesses are generally more positive about their regions also, with on average 5% more companies confident about their future regional business landscape than the UK as a whole.
Certain sectors are also far less confident about the future, with retailers the least positive over the long term, 55% predicting the UK will be a worse place to do business in ten years. Conversely 63% of tech sector businesses see the UK as offering a better place to do business in 2021.
More than half of businesses (55%) predict steady and sustained growth over the coming decade, although a significant minority (31%) expect zero or negative growth over the next ten years. When asked what will fuel this growth, technology is cited by 88% of businesses as being a key driver, while just 44% of businesses viewing immigration/population growth as an economic driver.
“It is clear that the majority of businesses believe in the fundamental strength of the UK as a place to do business, and this underlines the temporary nature of the challenges we are currently experiencing," Kevin Wall, Managing Director, Barclays Corporate, commented.
"It is also telling to see that businesses are generally more positive about their region than the UK as a whole, showing the importance of regional development.
“To see so many businesses anticipating steady and sustained economic growth over the next decade should also be welcome news for a Government that is focussed on developing a growth strategy.”
Foreign investors stand to benefit from any economic growth, with foreign ownership of UK companies and assets predicted to increase over the next decade by 79% of businesses, including 37% of businesses that believe there will be ‘much more’ foreign ownership in the UK.
“The UK has been a magnet for foreign direct investment for more than two decades bringing both benefits and challenges," Wall continued.
"While we can expect more international investment in the UK to stimulate economic development and job creation, there also needs to be consideration given to the fact decision making, research and development and tax generation may be located elsewhere.”
The survey also revealed a lack of ambition around exporting, with 74% of UK businesses stating they did not export and had no plans to start trading overseas in the coming 10 years, with small businesses least interested, although even 60% of those companies with turnover of between £100-£500 million had no plans to export.
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