When Gordon Brown said he had discovered the antidote to the boom and bust that had become the hallmark of the UK economy there were more than a few sceptical eyebrows raised.
Every decade or so since time immemorial, the UK had lurched into the red after a period of sustained growth only to finally extricate itself from the doldrums and begin to flourish again.
The reasons for the downturns over the years have been many and varied, be it the state of the public finances, an overheated housing market or one off economic phenomena like the dotcom boom.
But this time around the downturn has been different.
Far from eradicating boom and bust, the current Government has overseen not only one of the most significant booms in recent memory but also one of the most catastrophic busts.
This time around the blame for the crash has been laid at the door of the financial services sector whose predilection for risky investments brought about the so-called credit crunch which has seen the UK – and much of the rest of the world – plunged into one of the deepest and longest recessions in living memory.
According to the latest numbers the UK has finally followed the rest of the developed world back into positive territory in recent months but the recovery is horribly fragile: credit still comes at a premium, exports have suffered, the housing market remains flat and the public finances are in their worst state since Waterloo.
The upshot is that there are many who believe the business landscape in the UK may have been irrevocably changed, if not forever then certainly for a generation.
In a bid to really get to the heart of this change, national accountancy firm BDO has commissioned an unprecedented piece of research called Transitions.
The definitive and powerful study brought together an expert panel of academics at the Centre for Future Studies and the report came to quite unequivocal conclusions – the operating environment for businesses will never return to pre-recession normality and that a period of precariousness and weak growth could continue until 2015.
Mark Anslow, lead partner at BDO in Birmingham, said: "The research warns that businesses need to transform themselves to adapt to a new world order that will emerge as economic performance improves, many executives clearly think that there will be a return to business normality in the next two years.
"However, our report demonstrates that the world is changing, and there’s a need for UK businesses to reinvent themselves if they are to survive.
"After a decade of high economic growth as China and India began to integrate themselves into the world economy, the fundamental imbalances that this trend has created have derailed western economies.
"At the same time, technological change both threatens existing business models and offers opportunities to develop new routes to profitable growth for those that embrace it."
Dr Frank Shaw, foresight director at the Centre for Future Studies, said: "Our forward-looking research has benefitted from the wisdom of the many commentators and businesses all of whom are leaders in their fields.
"The expert panel’s insights and devil’s advocacy were invaluable in shaping our thinking. There’s more to come from the panel over the next few months on the actions businesses simply can’t afford to ignore as these transitions take effect."
Ian Pearson, futurist at Futorizon, added: "I think the recession has been quite a healthy thing to happen. It has enforced the necessity to trim a lot of dead wood from the economy. The companies which are faster to modify themselves and more willing to grasp new techniques and new business models will thrive and will come out of the recession much richer than they went in."
The expert panel included:
- Tony Dolphin, senior economist at the Institute for Public Policy Research.
- Graeme Leach, chief economist at the Institute of Directors.
- Stephen Radley, chief economist at the manufacturing lobby group the EEF.
- Lai Wah Co, head of economic analysis at the BBI.
- Ian Pearson, a futurist at Futorizon.
- Richard Snook, formerly cenior sconomist at the Centre for Economic and Business Research.
- Nicholas Bate, author and consultant at Strategic Edge.
- Ian Brinkley, programme director at The Work Foundation.
- Dr Robert Davies, strategy consultant at Imhotep Consultancy.
- Peter Hemington, partner at business services firm BDO LLP.
- Rupert Merson, former partner at BDO LLP.
While the initial findings of the Transitions report are now available from BDO and Centre for Future Studies, the main substance of the report will be broken down into six separate sections that will be published individually over the coming months.
The reports will cover:
1) A realigned economic world order
2) New forms of capitalism
3) Effective regulation and governance
4) Corporate cultures of creativity, innovation and challenge
5) A permanent cultural shift in consumer attitudes and behaviours
6) Reappraised and redefined sustainable development
The findings of each of these individual reports will be published in the Birmingham Post as well as on BDO’s website.
Readers are invited to go to www.freedomtothink.biz or click on the BDO link on Birmingham Post’s homepage at birminghampost.net and firstly download the overview of the Transitions report.
Following the publication of each section of the report, readers will be able to go to a special feedback form on the website and have your say on whether you agree with the report’s vision of the future.
The feedback from the business community will then be used to shape a special interactive Transitions event later this year where a panel of invited experts chaired by Birmingham Post editor Alun Thorne will discuss the report and the business community’s reaction to it.
Read the first report – A realigned economic world order – in the Birmingham Post on April 1.