British business: Three years of innovation in just three months
Britain’s small businesses achieved three years of innovation in just three months as they battled to keep trading during the coronavirus lockdown. While such efforts to keep revenues flowing have been successful for some owners, concerns about employment prospects and future investment remain for many as lockdown restrictions begin to ease.
These findings form part of a report from Be the Business, the business-led productivity movement. Since lockdown began, the pace of innovation by businesses has rapidly accelerated:
- Over half a million businesses (37%) in the UK have changed or are changing their operating model to find new ways to meet customers’ needs
- Over a fifth (22%) have introduced new services and 18% introduced at least one new product. This compares to 26% and 15% of businesses who introduced new services and products between 2017 and 2019, according to data from BEIS released last month
- More than one fifth (22%) also began selling online for the first time during lockdown
While business has been resilient and creative during lockdown, some business owners are concerned about the pace of economic recovery. The whitepaper suggests one in four businesses believe their turnover in two years’ time (2022/2023) will be lower than last year versus 37% who believe it will be higher.
Employment concerns do also remain. Three-fifths (58%) of businesses furloughed staff during lockdown according to the whitepaper. As the economy unlocks, businesses expect to lay off 11% of the workers they have furloughed and a quarter have already had to make redundancies.
As the economy reopens, British business falls into three distinct categories in terms of mindset:
- The Innovators: the third of businesses who have pivoted, tried new ideas, adopted new technology and introduced new products during lockdown.
- The Stickers: the third who intend to carry on or return to how they operated before lockdown. The majority in this group have not adopted new technology and largely want to try and go back to what made them successful previously.
- The Undecided: the final third who did not make sweeping changes during lockdown but are open to the idea of doing so as the economy rebuilds.
Be the Business believes the UK needs to support the Innovators and the Undecideds to drive economic recovery. The innovators, which have experimented during lockdown often through necessity, will require financial and political incentives to maintain this attitude. The Undecideds, which have taken a more cautious approach during lockdown but desire to change, will need encouragement, access to advice, and guidance.
Tony Danker, CEO, Be the Business, said: “Three years of ideas, inventions and new technologies in just three months is testament to the tenacity and latent entrepreneurial spirit of British business in the face of hostile economic conditions. But we must not under-estimate the fragility of any recovery and effects of possible scarring.
“This study shows that a quick and strong recovery is down to the choices that business owners make in the next few months. We must give them cause to choose ambition over fear.”