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New era for UK business

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UK business is on the brink of a new era, according to the Confederation of British Industry.

In its report, The Shape of Business – The Next 10 Years, the CBI finds that the recession and credit crunch has been the catalyst for changes in commercial models, supply chains and finance.

The CBI expects firms to find alternatives to debt-driven growth to protect investment and innovation. Meanwhile, ongoing concerns over a ‘domino effect’ of supply chain failures and issues around trade credit insurance will compel companies to form more collaborative partnerships.

Sustainability and ethics will become more integrated into the business model, and developments in technology and training will lead to more a flexible workforce. For some firms that might mean a smaller core workforce and a larger ‘flexiforce’.

CBI director-general Richard Lambert says: “What we now need is a more balanced, less risky pathway to growth – one in which the short-term returns may be lower, but the long-term rewards for management success will be a lot more sustainable and secure.”

The report’s findings echo results of an Ipsos Mori survey of business leaders at the end of 2009, which found that that more than half (55%) said they will now only tolerate a lower level of risk from gearing. Two thirds (68%) expect no improvement in credit availability in 2010, and as a result will reshape their business financing.

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