‘Magpie’ firms can add £100bn to our economy
WHAT can business learn from magpies? This may seem like an odd question, but the CBI’s latest research finds that the UK needs more companies being proud ‘magpies’, picking up the innovations that other businesses have tested and proven, and fewer behaving like ‘ostriches’, sticking with what they know.
Our research suggests that could add over £100bn to the economy, reducing inequality between the highest and lowest earners. With the Chancellor’s Budget tomorrow, Brexit countdown well under way, the time for action has never been more urgent.
The latest in cutting-edge technologies always catch the eye – and the headlines. Three technologies in particular – artificial intelligence, the internet of things and blockchain – are not just on the business fringes anymore, but shifting rapidly into the business mainstream over the next five years.
But building a successful business is not always about the next big thing in technology.
If we are to truly get to grips with tackling inequality and our deepseated low productivity problems in the UK – and especially Wales – then we need more businesses adopting the tried and trusted technologies of today, not just looking to tomorrow.
This dark cloud of low productivity does not hang over all firms. The high-fliers of UK business are more competitive than those of many other countries. But the UK has a greater share of firms at the lower end of the productivity scale than France and Germany, employing over two-thirds of the workforce.
Where firms are more unequal in terms of productivity, people are more unequal in terms of pay. The striking differences seen between the ‘best’ and the ‘rest’ of UK firms cause variations in the wages, opportunities and living standards of people across the country.
From ostrich to magpie lays out how government and employers can tackle this problem through raising business take-up of existing technologies and management practices seen as ‘best in class’.
Investing now in cloud, mobile and cyber security, for example, paves the way for a bright future of investment in ground-breaking technologies like artificial intelligence.
Unfortunately, UK firms are left in the dust of peers in many European countries. When it comes to investing in Customer Relationship Management (CRM) software, and buying and selling over the internet, we are a decade behind the Danes.
The CBI’s research shows UK businesses lead the pack of G7 countries in some characteristics that the best ‘adopters’ have in common. Being well linked with global value chains forces firms to take up technology that can coexist with that of their customers and suppliers. And many more of our small and medium-sized businesses collaborate on innovative projects with other businesses and institutions – a dockyard for the sharing of best practice and ideas.
However, we need more companies to embrace visionary management and leadership. UK businesses tend towards more risk-averse management mindsets, a classic Ostrich behaviour that takes away a firm’s edge to make the best investments, and make the most of them. The nascent “Be the Business” movement led by John Lewis’ Charlie Mayfield provides an excellent vehicle through which to address this shortcoming.
Let’s not take away from the strengths of UK innovation. Here, British business has a great record and reputation, battling for global premiership in areas like machine learning and battery technology. Leading businesses drive this through outstanding R&D, collaboration and leadership.
Creating world-class innovation is only part of the battle, however. For innovations to realise their full potential, we must get many more businesses lifting their heads and taking up the technologies and ideas that are right under their noses.
This should be made a national priority, starting with the industrial strategy and the Welsh Government’s economic strategy by putting innovation, and the diffusion of innovations, at its heart.
By addressing this blind spot we can truly start to move the needle on the Wales’ sluggish productivity growth, tackling inequality and improving jobs.