Quantitative easing is not the long term answer. It is not Government or the Bank of England that will stimulate the UK economy back to healthy levels of growth but a collaboration between the Media, Business and Shareholders.
Strategic Headway believes it is time for a joint approach. “These three groups need to collaborate together with a common goal in sight – building confidence. Any self-interest must be taken off the agenda’ says Michael Hill, Executive Director of Strategic Headway. The media should play an important part in economic recovery. It has a major influence on how consumers feel. As a consequence, constant sensationalised and pessimistic reporting exacerbates the negative ‘confidence’ felt by consumers. It is in the public interest to be less melodramatic and more unprejudiced in its style of reporting on economic matters.
Business must invest more. This starts with big businesses, many of whom are either sitting on a cash mountain or returning it to shareholders. Keeping shareholders happy in the short term is not addressing the big picture. Understandably it is a vicious circle; shareholders need to make adequate returns in their own right. Yet the only real way out is for shareholders, who have backed companies over the last few difficult years, to continue to do so by supporting and encouraging Boards to invest.
Asia is an imperative for building business confidence. The UK cannot rely on the European Union countries being its principal trading partners in the future; particularly if many are set for low levels of growth over the next ten years. Growth in the Asian markets is here to stay and trading with them should become the norm. For business today, this is more important than ever. The CEO of every business in the UK should have innovation as a strategic priority. They need to encourage and invest in innovation. It is not just about R&D. Innovation comes in many forms, from efficiency improvements to new products.
The time for strong leadership from business is now. Boards of Directors need to set strategy that will generate innovation and promote investment. Shareholders need to provide the financial ‘space’ to allow this investment; both in terms of capital outlay and returns. The Media needs to support these initiatives by constructively reporting progress.