By Jonathan Davies
The latest instalment of the Smith & Williamson Enterprise Index has suggested optimism amongst business leaders in the UK is stabilising.
The index score is up to 106.2 in the the months to the end of September, compared with 103.3 in the same period last year. During 2014, the index has scored between 105 and 109.
One of this quarter’s questions considered the introduction of a mandatory living wage, this is calculated based upon the amount an individual would need to earn to cover their basic living costs. When asked whether they thought that a mandatory living wage, rather than a national minimum wage, would adversely affect small businesses, 56 percent of the index’s respondents said that it would.
Arguments in favour suggest that a living wage would help to increase the motivation, attendance and the output of employees, who would spend more buying local goods and services.
This quarter’s respondents were also asked whether they believed that mandatory quotas are the best way to increase the number of women in boardrooms. The majority (62%) indicated that this wasn’t the best way forward with 18% of respondents remaining ‘on the fence’ about the issue. This reinforces the general consensus that mandatory quotas are counter-productive, undermining the perceived competence of women in relation to future board roles.
When asked whether or not the emergence of a ‘sharing economy’, also known as ‘collaborative consumption’ (whereby participants share access to products or services) is detrimental to their businesses, half of the respondents signalled that it is. While sharing economy businesses such as Airbnb, Uber, and TaskRabbit were developed to improve efficiencies and utilisation, they were also intended to disrupt prevailing business models.
More positively, over 70% of the Index’s respondents indicated that they anticipated that their export turnover would increase in 2014. John Longworth, Director General of the British Chamber Of Commerce says that despite a wealth of positive export figures being recorded recently, there is still more that the UK must do if it is to reach its full exporting potential.
Longworth believes that “we need to transform the domestic mindset of those businesses by creating an environment that makes it worthwhile for them to export”.
When asked whether the UK is better off inside the EU, 61% of the Index’s respondents answered positively. Chris Muktar, Cofounder of WikiJobs said that he believed that the UK is better off inside the EU because “countries outside of the EU face tougher trading conditions and while it’s true that the UK may be paying more than its fair share to the EU, this is a short sighted view”, adding that “you need to ask what the EU might look like in 50 years’ time and what the relationship of the UK to that might be”. Mark Hindmarsh of Versatile Connections, said that “the EU is the UK’s main trading partner worth more than £400bn a year, or 52% of the total trade in goods and services.
Staying in the EU means the UK is more likely to be in position to win new trade deals as opposed to being an independent outside EU player”.
The contrary argument is that the UK and the EU will necessarily remain as key trading partners irrespective of the UK’s EU membership.
Commenting on the results of this quarter’s Index, Guy Rigby, head of entrepreneurial services at Smith & Williamson, said: “The findings around the sharing economy are particularly interesting, with half of the businesses questioned fearing the disruption it will bring. Innovation in this area will not cease, so adaptability is the order of the day”.
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