2023’s highlights include persistent inflation, historic interest rate rises and escalating conflict in Eastern Europe as well as the Middle East.
Despite inflation nearly halving in the UK, with the latest ONS figures showing gas and energy prices having fallen by 31.0% and 15.6% respectively, a significant share of global business leaders state rising business costs and energy prices are their largest concern. Our Data-Driven Resilience Report 2023, which surveys over 3200 global business leaders indicates these remain a serious threat to business growth and resilience.
Businesses are operating in a turbulent environment
In our 2022 report, a staggering 50% of British business leaders stated energy prices were the biggest concern/threat to their organisations – behind in the polls only to Germany, Austria, and Poland, who were much closer to the conflict in Eastern Europe. This sentiment has now shifted in a positive direction as in 2023 only 36% of British business leaders state energy to be one of their biggest concerns this year – demonstrating the UK’s successful mitigation strategy.
However, the ongoing issue of record high inflation has meant rising business costs are viewed as the largest threat by a third (34%) of business leaders surveyed. This rose to 48% and 44% for those in retail, catering and leisure and travel and transport sectors respectively.
Looking ahead to 2024, the Autumn Statement highlighted some promising opportunities for businesses who are in need of a long term boost. The policy announcement that made permanent the “full expensing” corporate tax relief scheme brought a sense of encouragement among leaders. This will improve business sentiment and stimulate investment with time. Not only this, but the cut in national insurance may tempt people back into work, easing supply-side constraints in the labour market.
However, borrowing costs remain high and the new much-lower medium-term growth and higher-for-longer inflation outlooks from the OBR mean that the impact of future demand must be carefully considered. Economic challenges are often unpredictable and businesses should consider foolproof strategies to weather the incoming storms.
Harnessing data to minimise risks
Although external factors are at times uncontrollable, it’s clear that businesses need to harness insights from the data they have to make educated, quick decisions to help them minimise changes to the economy and business landscape. In fact, 77% of leaders believing data is pivotal in navigating turbulent times. Data has moved on from traditionally providing basic information to diving deep into customer preferences, uncovering highly useful insights that contribute to the survival of the business, its revenue generation, customer service, personalisation and informed investments.
Harnessing this data is easier said than done, however. Businesses continue to struggle with internal limitations when it comes to managing their data and harnessing opportunities which puts them ahead of their competition.
Notably, over one-third (34%) of leaders report difficulties with achieving the true potential of their data, and almost a quarter (23%) aren’t sure how to get the best out of their business data.
To address this, businesses must create a structured data environment, which not only significantly reduces and manages risk but is also a critical tool towards identifying growth opportunities. Serving as testament to this, one-third (36%) of respondents are leveraging data to increase revenue, while 32% utilise data and insights to drive wider business growth, be it entering into new markets, increasing sales, introducing new products, or acquiring other businesses.
Ultimately, every business is unique in its nature and must tailor data management strategies to its needs, with data serving as the foundation for smarter decision-making, successful business transformation and competitive advantage. Having the right data and analytics in place can help businesses get the most value from new and existing solutions – from sales targeting and product development to automation and generative A.I. – to solve their challenges.