THE coronavirus pandemic has spurred widespread business innovation, according to a recent member survey by the Institute of Directors.
But it is clear that further action from government is needed to maintain the momentum.
The IoD survey found that:
• Almost 9 in 10 (87 per cent) of company directors polled had made changes to their business in response to the pandemic.
• Less than one in 5 respondents (19 per cent) said they hadn’t made any permanent changes due to the pandemic.
• 42 per cent said the changes they had made improved their organisation’s productivity, compared with 27 per cent who said they did not.
• Two thirds had made all the adjustments they intended to make, but a further fifth wanted to make more changes in response to the virus.
On balance, directors surveyed expected to ramp up investment in areas such as research & development, training and software in the year ahead, but significant minorities in each area said they would have to rein in spending.
Overall, business leaders anticipated lower investment in buildings and machinery compared with their plans before the pandemic which may have long last impacts for commercial properties and high streets.
The Institute have urged government to help SMEs kick on after the pandemic by pushing ahead with infrastructure and skills spending, and improved tax reliefs to support firms’ investment plans.
The IoD have warned that business debt and uncertain demand could hold back productivity growth after the pandemic if these actions aren’t taken.
There’s no overstating the challenges businesses have faced this year. But a surge in innovation is one silver lining from this difficult year, we have many local success stories of businesses who have successfully pivoted during the pandemic.
Necessity is the mother of invention. Facing unprecedented restrictions, companies have had to come up with workarounds, fast. Many of these solutions – whether remote working, adapted supply chains, or moving services online – have turned out to work better than business-as-usual. As a result, some organisations may be more prone to embrace innovation going forward.
Sadly, this doesn’t mean our long-standing productivity puzzle is suddenly solved. Entrenched challenges around skills and infrastructure still need addressed. The Government has been taking strides on these key issues for business, but there’s distance left to run.
In the aftermath of the virus, many companies will be saddled with significant levels of corporate debt. The Treasury will need to be accommodating to encourage business investment with tax reliefs.
One thing it certainly shouldn’t be doing yet is hiking up taxes, which could snuff out the recovery.
:: Kirsty McManus is national director at the Institute of Directors (IoD) Northern Ireland
