We live in interesting times. Making sense of a world gripped by fundamental political, economic and social change is challenging.
Factor in the impact of technological-led change which is transforming industries and markets, destroying jobs and businesses, and creating new ones that could not have been predicted just a few years ago, and the future can appear to be somewhat daunting.
If you do not plan your way through this uncertainty and invest for the future, your worst fears could well be justified. If, however, you have a business and technology strategy that focusses on developing new capabilities, while holding down costs, you can survive and thrive.
The sources of uncertainty are legion. Brexit looms above everything else, and however you voted as an individual, the uncertainty - what Financial Times columnist Robert Shrimsley describes as ‘a terrifying game of Brexit chicken’ - is extracting a price.
Brexit troubles for talent ahead
Businesses of all sizes do not know the shape of their trading relationships from the end of March 2019 and the knock-on impact on the overall economic outlook. This makes for difficult planning, hiring and investment decisions.
This uncertainty is in addition to long standing issues faced by British companies and small businesses in particular, such as both a low skills base and an endemic skills shortage. The SME lobbying and campaign group the Federation of Small Business said in a January 2019 survey that 36 percent of those questioned cited access to appropriately skilled staff as a barrier to business growth.
This was higher than those citing lack of consumer demand (29 percent) and labour costs (21 percent). Post-Brexit immigration and nationality regulations could make it even more difficult for business to hire people with the necessary skills.
If Brexit weren’t sufficient, businesses face a host of other challenges from the beginning of April. These include the Making Tax Digital programme, which mandates the online filing of VAT returns, the government’s higher living wage regulations and rising employer auto-enrolment contributions.
For many business owners the reflex reaction to both economic uncertainty and rising costs is to batten down the hatches. The temptation is to cut controllable costs, reduce overheads and pull back on discretionary spending, including investment and training and wait for better times.
While it makes sense to cut out waste and focus your efforts on customers and lines of business that deliver the best margins, it is folly in the digital economy to cut back on technology investment and on training.
Making the case for continued technology investment
Organisations that are able to invest through the downturn in the economy are always best positioned to benefit from the end of uncertainty and the eventual upturn that follows. Training is the only antidote to skill shortages, while the increasing pace of technology innovation, particularly with the rise of artificial intelligence (AI) and cognitive computing, means tech investment cannot be skimped.
We have seen the impact of Moore’s law in hardware, which predicted exponential growth in computing power. We could now be on on the cusp of Moore’s law in software also, and those left behind will find it difficult to catch up.
The case for technology investment does not only apply to those on the cutting edge of AI. It applies to all businesses.
Ensuring your basic business systems operate efficiently, your data is secure and accessible, your websites, email, communications systems, and collaboration tools all work efficiently and meet the demands of customers and staff – is the basic platform for business agility, scalability and growth. And that requires considered, but consistent investment.