Report warns UK businesses to face up to reality after recession
UK businesses are being warned to accept the fact that it will not be “business as usual” for some time to come.
The warnings came from leading business groups including the CBI, the Institute of Directors and the Institute for Public Policy Research. They are contained in a new report by BDO, the accountants, and think tank the Centre for Future Studies.
The report, titled Transitions, said that weak economic growth is likely to continue for at least five years and it accused UK boardrooms of being “blinkered” about the current economic environment.
The report revealed nearly half of UK board directors predict that their companies would return to “pre-recession normality” and that their businesses would not fundamentally change in the next five years.
The report said: “Many executives clearly think that there will be a return to business normality in the next two years. However, the world is changing, and there’s a need for UK businesses to reinvent themselves if they are to survive.”
Peter Hemington, partner at BDO, comments: “The global economy has become unnaturally skewed through the rise of India and China. Although we hope that this recession may be over, the consequences still remain.
“As a result, the economic environment will remain tough for some time to come. Linked to this, we are going through a period of profound societal and technological change which will mean that some business models will wither away and die, while others will thrive and grow,” he added.
Meanwhile, the report highlighted that the UK economy contracted by 4.8% in 2009 - the fastest pace of decline in a year for almost 90 years.
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