In the years which followed the financial crisis and deep recession of 2008 and 2009, business investment took a nose dive, but since last year that trend has dramatically reversed and investment in IT is leading the way. Indeed spending by businesses on IT software and hardware is now 24% higher than it was in 2009.
A reduction of about 6% in UK GDP between the start of 2008 and end of 2009 triggered a huge and understandable loss of confidence on the part of both businesses and consumers. Confidence amongst consumers began to increase in 2011 and the economic growth enjoyed by the UK after that time was built almost entirely by consumer spending. From last year, however, businesses have joined the party and are now contributing more to growth than consumers. Indeed in 2014 business investment increased by 8% on the previous year, well above the historical average and whilst 2015 is not predicted to see quite such robust growth, a healthy increase of over 5% is forecast. Many economists predict that the rate of business investment growth will accelerate again from next year to over 7% during both 2016 and 2017.
Funding for business investment is assured through cash reserves built up over many years of low spending and easily available credit from banks and leasing companies, the only other ingredient required is confidence.
A further big incentive for business investment in IT is likely to come from the Government decision to replace the minimum wage with a living wage set at a significantly higher level. If labour is to cost more, there will have to be an increase in productivity to fund the increased cost, and productivity can only be increased by investment in new technology. As long as confidence in the overall economic environment remains strong, the next few years should produce great business opportunities for IT solution providers.
Andy is an experienced sales and finance professional with over 25 years’ experience in sales aid leasing. Andy is widely recognised as an expert in business finance and has in recent years focused his attention on developing partner sales teams develop an understanding of how businesses secure project financing. His training programme – Finance Unlocked – is a highly rated customisable course and is offered at no cost to partners.
If you’re interested in helping your sales team overcome finance-related hurdles during the selling cycle, please get in touch with Andy on
07966 114 243 or email here.