Fixing the Productivity Crisis
The recent announcement that the British economy is struggling to bounce back to pre-recession productivity should not come as any major surprise.
SMEs have blossomed across the country and in general this would lead one to believe that we must be on the right track.
Indeed, looking at the rise in GDP you'd be forgiven for making such a mistake.
The reality is that we are trundling along at a dangerously slow pace across a host of sectors and the primary cause of this is the lack of capital available to the thousands of small businesses to invest in growth and new technologies or machinery.
On the face of it, this lack of outside capital could spell even more gloom and doom for the economy.
Entrepreneurs and business owners however have to step up to the plate and look at their own resources and make use of those resources.
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Few if any SME’s actually lack capital or access to capital.
Business owners need to become savvier about using what assets they have to create working capital.
Whether it’s a implementing a sale and lease-back on plant and equipment or cash flow acceleration with facilities such as factoring and invoice discounting.
If you are on the growth curve then as an entrepreneur you should have no reason not to leverage your assets to solve your short term working capital problem.
One of the core traits associated with entrepreneurialism is the ability to take the initiative and so it is the case here.
Waiting on the Government to fix the issue is not an option.
While greater financial incentives and better financial education may act to stimulate productivity to some extent - and they are measures that should definitely be considered moving forward - the reality is that their introduction would be slow and drawn out.
Ultimately the issue is a difficult one to fix. It requires changing the mind-set of the British employers.
Austerity and regulation, while much needed, have created a culture of apprehension and risk aversion in the UK that is unconducive to growth and productivity.
To overcome this, business owners must realise the variety of options available to them, such as those mentioned above and they must embrace the notion that sustainable growth requires investment and a commitment to work force development, R&D and technology.