Throughout Britain and beyond, the ricochets of a tempestuous 2016 are being felt; in every industry and every business, leaders are reflecting – could we have predicted the Brexit vote, how ready are we for the changes it might bring, and do we have the skills and resources to ride an era of digital disruption.
Everything points to the importance government places on the small business community, with tech and innovation at the forefront of these policies. So does this offer any insight into the next 12-18 months?
Investors will continue to seek alternative investment opportunities, as banks fail to provide the return on investment expected. With programmes available such as the Seed Enterprise Investment Scheme (SEIS), which has been designed specifically to help small, early-stage companies raise equity finance, investors can put their money in high-growth start-ups. When combined with the government promise to support investment in scale-up and innovative businesses, this is great news for entrepreneurs and will likely result in a plethora of exciting new ventures and investments.
Cloud computing services will soon become the biggest revenue generator for software firms, with annual global spending on cloud services expected to increase by a 19.4 per cent Compound Annual Growth Rate (CAGR) by 2019. As a cloud-based invoice financing service, we have been witnessing first hand the rapid growth and acceleration in the adoption of this technology, and it’s by no means done growing. The industry will continue to boom in 2017, building more momentum as people and businesses increasingly see the value and benefit of adopting cloud technologies. In short, there’s only one way this is going – it’s going to take over.
Irrespective of the announcements made in the Chancellor’s Autumn statement, the outlook for SMEs seeking investment is promising. As long as investors don’t get the ROI they want or expect from banks, and I don’t see this changing in the short-term, there will be more money available from private individuals looking to invest in small businesses – so now is a great time to be an SME.
Turning to new businesses; despite the promises made by the prime minister to support start-up and scale-up businesses, the truth is, it’s never been tougher to find that breakthrough idea. The pace of innovation has really stepped up, and with significant investment announced by the Chancellor in this area, the likelihood is, the pace will only get faster. Therefore, I expect to see lots of innovative ideas brought forward and tech companies established in 2017, taking the digital landscape in the UK to unprecedented levels.
With exchange rates still feeling the bite from the Brexit vote, and the pound taking the hit, investors from Europe and the US will look to the UK where they can buy 40-50 per cent cheaper than before as well as invest in innovative start-ups. The result? A lot more money will be entering Britain in 2017.
The adoption of telematics and usage-based insurance as well as the replacing of traditional insurance platforms with more innovative options such as cloud software and portals were two predicted trends for 2016 that didn’t quite make the appearance we were expecting. However, once the Brexit roadmap is clearer and confidence in the UK has stabilised, I expect to see these two trends make their way onto the market, and for the sector to reach the peaks it was hoping for in 2016.
Momentum within Fintech will continue to build, however, a customer-centric approach will begin to overtake the need for exciting new technologies. Digital business transformation means changing minds and attitudes, and I expect 2017 to see much more focus on improving customer experiences in order to achieve true transformation. Leaders in the space are likely to seek collaborative relationships with banks and other financial institutions to deliver holistic, customer-focused, digital-first services.
Conservatism post-Brexit remains a major barrier to growth for many businesses, as they await the longer-term consequences of this historical vote. But as the dust settles and a resolution is achieved, 2017 should see a re-emergence of confidence, and a new-found appetite for growth.
At a time of significant disruption, there remains for some a reluctance to embrace change. As we’ve said, digital disruption means changing your mindset and your approach, as well as your resources. While 2016 set the scene, and for many, unnerved them, 2017 should see a natural evolution of digital transformation, whereby disruption is increasingly seen as an opportunity rather than threat.
Source: Ben Lobel - smallbusiness.co.uk