The cost conundrum
Self-improvement comes with a cost. Whether it's a personal or company-wide goal, investment of time and money - upfront - is a necessary expense. And while we would like to see the fruits of our labour quickly, the reality is that real change takes time, which makes justifying that initial outlay difficult.
Some companies formalise 'self-improvement' by reinvesting some percentage of profits. This gives them budgets specifically for implementing new processes and materials that will hopefully deliver prosperity through innovation and, most importantly, give the business longevity.
Business has never been tougher in the UK, Europe and further afield. Staying competitive in the high-tech sector has always been expensive, but business costs are increasingly making it even harder. A recent report by the Forum for Private Business highlights the increasing cost pressures being faced by businesses, particularly those small to medium sized. It paints a rather different picture to the widely reported 'positive signs of economic recovery' and the success lauded toward the UK engineering and manufacturing sector.
The report says that business costs are rising at 3.5% above inflation, with most seeing an above inflation increase in energy, transport and raw material costs. It means many firms are continuing to fire fight against financial pressures, with investment falling down the list of priorities. Indeed, 73% of those surveyed said that excessive business costs are having a detrimental effect on reinvestment and inhibit plans for growth. In short, SME's are struggling to take full advantage of these promising signs of recovery.
One excess to all of this is red tape. Administrative demands in terms of financial reporting and regulatory compliance have increased significantly in recent years, resulting in paperwork being given priority over innovation. And the incurred regulatory cost to change processes and materials is often too great to justify. This is stagnating the ability of many SME's to add value and keep any kind of technology lead against competitors abroad, and that is a real problem for both industry and Government.
Many want to see the UK capitalise on its current position and re-establish itself as a leading nation of quality engineered products. Industry must be given the freedom and financial ease to not just consolidate its current position, but to capitalise upon it.
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