Business News Round Up (07/10/2021)
Scotland’s investor base ‘most self-contained outside of London’ but report raises concerns
Scotland’s investor base is the most self-contained outside of London, but disparities in access to finance are leading to “wasted economic potential”, a new study suggests.The British Business Bank’s first annual regions and nations tracker shows that while Scotland’s 9% share of UK equity deals since 2011 outperformed its 6% proportion of the SME (small and medium-sized enterprise) population, its value of private debt investment was just 2%. The report notes that this imbalance reflects regional disparities in access to equity finance and private debt across the UK. According to the tracker, 81% of equity investment stakes in Scottish companies involved an investor within the country, behind only London’s 90% on the same measure and ahead of north-east England with 66%. About one-eighth (12%) of equity investors in Scottish companies were based in London, while 7% were based in other parts of the UK. Companies in Edinburgh are the key focus of the Scottish equity market, with nearly half (47%) of pairings between businesses and investors based in the Scottish capital. Glasgow is the second highest, with 16% of pairings. North Lanarkshire and Aberdeen represented 9% and 5%, respectively.
Report reveals regional discrepancies in equity investments
The North West accounts for just 4.2% of total UK equity investments, compared with the 62% accounted for by London – but Manchester, Liverpool and Cheshire East account for the lion’s share (53%) of all equity deals within the region, new research shows. The British Business Bank’s first annual Regions and Nations Tracker shows that 42% of businesses in the North West were using external finance in 2021, but economic potential continues to be wasted because of regional disparities in access to equity finance and private debt. Core debt products, including overdrafts, loans, and credit cards, are the most used forms of business finance in all regions and nations of the UK, but equity finance and private debt can support companies with the potential for rapid growth. Manchester, Liverpool and Cheshire East are the epicentres of the equity ecosystem in the North West in terms of recipient businesses, accounting for 31%, 11% and 11%, respectively – compared with zero equity deals happening in Blackpool and Barrow-in-Furness. The report also highlighted the lack of uptake of equity funding in Northern regions. The North West saw the most investment, accounting for 5.7% of UK equity deals in 2020, yet this was lower than its share of the UK business population (9%).
Research reveals a lack of specialist entry-level talent in Scotland
UK employers are facing a skills shortage when it comes to hiring specialist, entry level talent. The Open University’s annual Business Barometer report, in partnership with the Institute of Directors, reveals 62% of leaders in Scotland are struggling with recruitment, as candidates lack specialist skills and relevant experience. In fact, 42% of Scotland’s businesses believe finding staff with the right skills will be the biggest challenge in the next 12 months, with 36% stating the problem will remain for the next five years. Despite the challenges associated with hiring entry level talent, 57% believe that work-based learning is critical to their long-term success. The survey took in 1,500 senior leaders in the UK – a fifth of whom were based in Scotland. The skills shortage gap has remained a challenge north of the border, with 61% of organisations saying that the pandemic has made it harder to recruit candidates with the right skills.
https://www.insider.co.uk/news/research-reveals-lack-specialist-entry-25157051
New research reveals micro-businesses in the North West are set to bounce back
Seven in ten North West micro-businesses expect activity levels to bounce back over the next 12 months as consumer demand rises, according to new research into one of the most important parts of the UK economy. Shawbrook Bank’s Micro Business Monitor surveyed* UK businesses with 25 employees or fewer – known as the backbone of the economy – in a bid to understand the opportunities and challenges that lie ahead for more than 5.7million firms in the UK. Three quarters of North West micro-businesses believe increasing consumer demand will be key to their success, followed by 60% that plan to diversify or introduce new revenue streams. More than two fifths also intend to hire additional full-time or part-time employees in the next six to 12 months. Almost a third plan to invest in digital, technology or automation while 27% are planning to target new sectors.