Building business confidence.
5th March 2017
A new study commissioned by Newable shows that building business confidence is a key driver of economic success.
It’s what we do.
The new brand we introduced towards the end of last year was not simply an exercise in choosing a new name and picking some swish new colours. It was about defining the values that make up who we are as a company and thinking hard about what we offer customers as a united business. Although we have not adopted a corporate slogan – like Nike’s Just Do It for example – we have introduced the theme of building business confidence.
Confidence is our key business benefit
On first appearances Newable offers clients a portfolio of disparate products and services. For example, Newable Consulting helps companies mitigate business critical risk. Our Exporting team helps companies navigate the maze of trading overseas on behalf of the Department of International Trade. Newable Funding provides loans to help people start-up and scale their businesses. And that’s just for starters. However, the deeper one looks the more commonality there is between these offerings. At root we give people the confidence to realise the potential of their business. So clients of Newable Consulting go to bed at night confident that they have taken the right steps to minimise the risk of their business crashing due to a fatal data breach, a black hole in corporate governance, or an inability to manage complex change. If you’re a client of our International Trade Advisers, you can embark out into the big wide world of exporting confident of success. If you take a loan from Newable, you can be confident that someone is prepared to back you and provide mentoring support so that you can get your business up and running. And so on.
More and more confident
We want to scale the scope of Newable’s business dramatically in the next few years. We want to become the champion of business growth. We want to become the authority in building business confidence. These bold statements raised a challenge. We wanted to make sure that our intuitive belief that business confidence is in fact linked to business growth. If we could establish that linkage, then by becoming master builders of business confidence we could we will be well on the way to achieving our own goals of creating a bigger and better Newable.
Newable working with CEBR
Measurement of business confidence has actually been taking place on a monthly basis since 1958. Consumer confidence is also measured. These are high profile studies. They make the news. Rises and falls in confidence levels moves markets. And, of course the levels have been hugely volatile since the Brexit vote last June. One of the UK’s leading authorities in economic forecasting and analysis is the Centre for Economic and Business Research (CEBR) (www.cebr.co.uk).
The missing link
There are research studies into economic sentiment, that is business confidence. There are research studies into economic statistics, that is GDP, job creation, investment spend etc. However, there is a missing link in seeing whether sentiment and statistics are somehow interrelated. So we commissioned CEBR to conduct research into whether that link existed, the extent to which it existed, and the impact of one on the other. Data was taken from the long-established CBI Business Optimism Index, and it was compared to the data from the UK Government’s Office for National Statistics (ONS) then applying controls to identify the influence of other factors such as interest rates and GDP.
The headlines of the study are that there is, indeed, a strong correlation between business confidence and job creation particularly when a two quarter lag is applied. There is also a strong correlation between business confidence and business investment, again with a two quarter lag. Interestingly, the research identified a less significant correlation between business confidence and R&D spend, suggesting that R&D decisions are longer term calculations, less likely to be impacted by prevailing sentiment. The research was able to extrapolate out to assess the impact of confidence on GDP, although the methodology of GDP calculation makes the correlation less directly identifiable.
The results of CEBR’s research study has just been published as a Newable White Paper. This paper reveals that levels of business confidence in 2016 were lower than the long term average (recorded between 1972 – 2015). If confidence had been at the level of the historic average, then the UK economy would have enjoyed an additional £2.2bn in business investment and 249,000 additional jobs would have been created.
The research indicates that in 2017, if we can return business confidence levels to their historic norm, then growth could be boosted by the equivalent of 0.5%. This is hugely significant. CEBR themselves are forecasting GDP growth of just 0.8% this year, the slowest since the recession of 2009.
A confidence booster
The report is a confidence booster all round. It identifies the importance of confidence to taking positive decisions that ultimately drive businesses and the economy forward. It underlines the importance of what we do at Newable for our clients on a daily basis. We help business people with the advice and resources so that they can make big decisions confidently. And it confirms that Newable has a powerful platform which helps to differentiate us in the market place and establish our claim to be the champion of business growth.
The report by its nature looks at macro measures – GDP and so forth. However, the macro is, of course, merely an aggregation of the micro; the individual business decisions that are taken (or not) at a local level each and every day. Decisions that are determined, very markedly, by how confident business people feel about the likelihood of a successful outcome. Therefore, business confidence is a source of competitive advantage. And by building business confidence, Newable helps clients unlock this.
Newable in the news
We have promoted the survey via a media press release and this has already been covered already by the Mail on Sunday. Chris Manson is meeting with James Hurley of The Times in early March to discuss the report.
Some printed copies of the White Paper are available on request from Nick Wright and a soft copy can be downloaded from the Newable website.