Lee Hopley delivered a fantastic keynote presentation yesterday at Digital Manufacturing Week on UK SME economic outlook. The Manufacturer's James Devonshire takes a look at some of the key points.
Lee Hopley is Deputy Director for Research Partnerships at the Enterprise Research Centre. She delivered her keynote presentation on the economic outlook for UK SMEs at The Manufacturer Digital Manufacturing Week event yesterday.
Here is some of what we learnt from Lee’s enormously insightful presentation:
- Unsurprisingly, the effects of the Covid-19 pandemic, subsequent public health response and the shutdowns that that has entailed globally have made for “a brutal year”, with double-digit contractions witnessed across most of the developed world.
- Nevertheless, despite strict social distancing measures still in place, most countries have seen a subsequent rebound now that they have started to open up.
- One of the most striking aspects of the decrease in output that has been witnessed is the degree of sectoral variation, with consumer-facing industries, such as accommodation and food service, taking the hardest hit at the beginning of lockdown. In comparison, the financial services sector and real estate industry have seen only modest contractions. Manufacturing has been somewhere in the middle.
- The Chancellor’s Coronavirus Job Retention Scheme has significantly helped businesses hold on to staff during the pandemic, curbing job losses.
- Nevertheless, expectations are that job losses will accelerate as 2020 ends and 2021 begins, despite the extension of the furlough scheme.
- Household worries about unemployment remained elevated in October and average earnings are set to decline.
- Significant financial fragilities are apparent, particularly for smaller businesses., with 15% of firms saying their operating costs exceed their turnover. For some firms with less than 50 employees, a “real crunch point is coming”, according to Lee.
- Furthermore, the fact that a large proportion of companies simply do not know their financial situation adds to concerns about the resilience of small companies at the moment.
- While there’s concern about the financial health of all businesses, small firms are particularly vulnerable.
- On the plus side, the pandemic has triggered many agile small businesses to consider further digitisation, as well as focus on becoming more efficient and reducing costs.
Final thoughts
Lee finished up her presentation with some insightful final thoughts:
- Any recovery contingent upon a dynamic and innovative private sector
- It’s a rocky road ahead, with components of business dynamism at risk
- Continued flexible, targeted support will be necessary (and ideally more predictable)
But Lee’s keynote presentation wasn’t the only highlight of this session. It was followed by a fantastic overview from Dr. Alicia Greated, Chief Executive Officer at KTN, on the brilliant work they are doing to connect innovators with new partners and new opportunities beyond their existing thinking.
The session was then rounded off with an excellent panel discussion, featuring Marlini Finney, Managing Director of Challs International Ltd; Thang Vo-Ta, CEO and founder of Callaly; Simon Reid, Head of Advanced Manufacturing at Growth Platform in Liverpool; and, of course, the Enterprise Research Centre’s Lee Hopley.
To listen to Lee’s keynote in its entirety, as well as Alicia’s presentation and the excellent panel discussion, head over to the Manufacturing Leaders’ Summit on the Digital Manufacturing Week platform and watch it on-demand now.
Day two of Digital Manufacturing Week began a few hours ago. You can still get an incredible amount of value out of the event by registering here.
*Header image courtesy of Depositphotos
