Britain’s start-up businesses are more optimistic about their prospects than their rivals in the United States, Europe and even fast-growing Asian economies, despite the uncertainties caused by Brexit, according to research by EY.
The professional services company said that half of UK businesses less than five years old expected to grow by more than 11 per cent this year. Almost a quarter were forecasting growth of more than 26 per cent.
“British businesses are unfazed by uncertainty and are forecasting higher growth than all 30 countries surveyed, easily outstripping the US and even fast-growth tiger economies India and China,” EY said.
“Given the uncertainties besetting UK companies as they face two years of Brexit negotiations, it is encouraging that the country’s youngest companies show these high levels of confidence.”
The optimism was generally echoed across the world in EY’s growth barometer. Its survey of 2,340 executive board directors at middle-market businesses with revenues of $1 million to $3 billion found that the vast majority were bullish about their outlook.
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Businesses were confident that they could grow on average between 6 per cent and 10 per cent this year, faster than the World Bank’s latest global growth forecast of 2.7 per cent.
One of the survey’s more revealing findings was that uncertainty had become a standard business risk. Whereas fears about Brexit, Donald Trump and the European elections paralysed decision-making last year, companies were now getting on with plans regardless of the political backdrop.
“Uncertainty has become the new normal and while geopolitical risks and trade barriers are influential factors, middle-market companies are moving ahead with hiring plans,” Annette Kimmitt, EY’s global growth markets leader, said. Entrepreneurs were “developing agile and flexible strategies to work with uncertainty”, she added.
The survey also cited automation and artificial intelligence as disruptive forces. Yet rather than a threat, 89 per cent of executives saw uncertainty as grounds for growth opportunities.
Finding talent was businesses’ top priority and 93 per cent of executives believed that technology would help them to select the right candidates.
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Flying in the face of conventional wisdom that automation would cannibalise jobs, 41 per cent of middle-market businesses said that they planned to increase headcount. They also planned to take advantage of the increasingly flexible “gig economy” to make more use of contractors.
Bosses said their biggest threat was other companies, ahead of political instability and the availability of credit.