Almost half (46%) of UK businesses sit in the lowest quadrant of a new model of competitiveness based on Talent, Technology and Future Readiness, devised by academics at Goldsmiths, University of London in partnership with Microsoft.
Economists within a research team led by Dr Chris Brauer at Goldsmiths, University of London estimate that the UK would see an immediate boost to the economy of £48.25 billion if every leader took even basic, low-investment steps to move towards sustainable growth practices. This is more than the Government spent on the first five months of its furlough scheme (£35.4 billion).
The new Microsoft report, Creating a Blueprint for UK Competitiveness, identifies two distinct rebuilding strategies employed by UK businesses in wake of the Covid-19 pandemic, Hollow Growth and Sustainable Growth.
Firms pursuing a Hollow Growth strategy typically extract as much value as possible from people to reduce costs; offer little support to employees to help them adapt to new conditions; focus technology investments in siloed areas to meet individual challenges; and benchmark future readiness using traditional productivity measures.
In contrast, organisations pursuing Sustainable Growth strive to maintain resilience and have a capacity to adapt; provide leadership defined by empathy and decisiveness; nurture a culture of trust, empowerment and inclusivity; and consider the impact of technology across their organisations as part of a wider strategic approach.
The report categorises UK organisations as Front Runners, with growth of 5% to 15% in the current climate (15% of the total); Challengers, with steady or low growth of less than 5% (27% of the total); Survivors, experiencing small declines in turnover of less than 5% (12% of the total); and Endangered, facing turnover declines of 5% to 15% (46% of the total).
Its analysis identifies a correlation between the strategy adopted by organisations and their current competitiveness levels, with Frontrunners most likely to pursue a Sustainable Growth strategy and have a solid digital infrastructure and Endangered firms most likely to have less diverse talent and be slow to integrate new technology.