A vibrant economy will be a growing economy, but that growth should be recognised and measured through factors other than pure economic output. That was the message from a wide range of experts across the vibrant economy discussion series, on the question of sustainable growth: what it looks like, how it can be achieved, and how it should be measured.
Key themes that emerged in the debate around sustainable growth included the questionable ambition levels of UK businesses; the imperative of a long-term view on growth and performance; and the need for new mechanisms to measure growth more holistically.
Ambition and modesty
A common theme that emerged across the discussions was the need for greater ambition among UK businesses. Dr. Shailendra Vyakarnam, Director of the Bettany Centre for Entrepreneurship at Cranfield School of Management, relaid a story about Eric Schmidt, now Chairman of Google and then at Sun Microsystems.
“He said they were not a small company that’s growing, just a big company starting small.” By contrast, he believed, UK companies were more likely to state their present financial position than outline their future ambition, and could benefit from a more assertive outlook: “Don’t be a £3m business trying to grow, but a £30m business that is sorting out how to get there.”
In relation, a number of entrepreneurs and CEOs made the point that the UK has sometimes struggled to convert its early-stage business population into high-growth successes. Rolf Stein, CEO of Advanced Plasma Power, commented: “I don’t think as a country we’re that bad at innovation; I also don’t think we’re that bad at entrepreneurialism at the early stage. What we’re not terribly good at is nurturing and helping grow and establish those companies to become leading global businesses.”
A long-term view
For many, there was also a frustration around short-term perspectives and attitudes in UK business. In the view of Mike Beesley, CEO of Resource Solutions Group, “the economy takes too short term a view on everything. Business is too short term; politicians can’t change anything in three to four years.”
Edwina Dunn, CEO of Starcount and founder of dunnhumby, was another who stressed the need for a broader perspective from business on its growth outlook: “companies need to think in a more holistic way: what are the factors that are going to affect growth, in the short, medium and long terms?”
The culture of short-termism, some felt, risks becoming a barrier to the development of a more rounded view on what growth should look like, where social and environmental factors are considered alongside financial returns.
“If the decision [on balancing social and economic capital] sits with a CEO at a listed company, then they will choose the economic potential, because that’s how markets react on an annualised basis,” was one view expressed. “It’s one year to the next. Social capital takes a lot longer than one year to create.”
Measuring sustainable growth
With many calling for new perspectives on growth, there was also discussion of new ways to measure that growth. As Debbie Wosskow, Founder of LoveHomeSwap, commented: “the question is how productivity and growth can be measured when the rules are changing.”
George Ferguson CBE, Mayor of Bristol was another to argue in favour of new indices for growth and economic performance: “We need to find new ways of measuring different things, like wellbeing and happiness, which may seem wishy-washy to some but in reality drive healthy economies.”
Tom Ball, Founder of NearDesk, concurred: “Somebody should find a way of measuring long-term value. We keep talking about wanting long term things to happen, but the numbers we use to measure things don’t reflect that.”
For sustainable growth to become a reality, therefore, there needs to be change not just in how growth is perceived, but in how it is measured and codified, by business and in the economy at large.