Will the Con-Lib Coalition Have a Positive Impact on UK Businesses?

Monday, 17 May 2010

An Overview of the Creative Industry

Con-Lib Coalition ImageThe economic growth of any country comes from the government and the private sector. I do not need to tell you about the state the British Government has been left in after thirteen years of Labour Governing. But let’s take a look about the state of UK creative industries:

I speak on behalf of those working in creative industries throughout the UK that many of us have seen a drastic cut back in Private Sector spending – huge cutbacks in client budgets since 2008 particularly in the advertising, public relations and graphic design industries. This being attributed to the massive government spending which has had a negative impact in private sector consumption and investment. When business directors and shareholders do not understand the true importance of marketing these divisions of the business are usually the first to see a slash in budget.

Lucky for those of us in the digital industry we have not suffered so much at the hands of the public sector over spend. In fact we have seen an increase in online marketing spend with more organisations and companies starting to embrace and understand the value of marketing their business and products online. In fact, 66% of companies are planning to increase their digital marketing budgets during 2010 (Marketing Budgets Report, econsultancy 2010).

Creative SME’s have competed for public sector contracts

In attempts to further conserve profits many SME’s have turned to the public sector to sustain their business. This has proved a good strategy in some cases but has generally not been the case for creative SME’s due to the rigid procurement processes which prevent smaller private sector providers from competing for public sector contracts. Sam Allen, search expert at Zeta wrote an excellent post about public sector organisations using private design agencies.

Labour ‘spin’ has resulted in a negative reputation for Marketing and PR

PR is often said to be about reputation management yet through poor and ineffective attempts to manage themselves the UK government has damaged the meaning of PR.

The government’s attempts to ‘market’ themselves and influence public opinion have always had a negative impact on the perceived value of Public Relations and there is nothing new here. However the last thirteen years or so of government ruling have left the UK industry severely tarnished. From the appalling MP’s expenses which were leaked in 2008-09 to the infamous “good day to bury bad news” email sent by Jo Moore during the 9/11 bombings – Labour has been an excellent example of poor reputation management riddled with communication crisis, slander and lies and this is giving the PR industry a terrible position.

Secondly, in an attempt to win the public votes the three main parties (hypocritically) throughout their campaigns have taken a real swipe at PR.

They’ve threatened to slash public sector PR and marketing spend, or even to ban public sector spending on what we’d otherwise see as normal government activity. The risk is that good government takes second place to good political positioning, and that in the anticipation of a second election in 2010, the parties decided to make PR their punch bag of choice” says Francis Ingham the director of the PRCA.

A party coalition and hopes for economic recovery

The long awaited outcome of the 2010 UK General Election was finally concluded earlier last week after a long weekend of political confusion, discussion and debate.  After thirteen years of doom under New Labour ruling, signified by Spin, Conspiracies and of course the hated Recession – we hope that an alliance between Tory leader Cameron as PM and Lib Dem’s Clegg as deputy will see Britain move into a realm of stability and economic prosperity, with Cameron leading the way to an economic recovery.

The Conservative-Liberal Democrats coalition has left many UK businesses and business owners feeling a lot more optimistic about trade and the future stability of the economy. The proposed cuts to the public sector spend may finally give private sector organisations the fuel to prosper again.

A study of business owners and executives by employment law firm Citation (www.citation.co.uk ) found that 63% of business owners believe their company would perform better under the new Con-Lib ruling.

But what is the feeling of business owners and directors in creative industries and other private sector organisations? I sought to do a bit of my own research to see if this figure is representative by asking business executives and directors whether they agreed that UK business would perform better under the new ruling.

The general views reflect the findings of the Citation research. And despite the differing political opinions there is a general consensus of optimism and hope. Clive Sexton’s comments highlight that whilst the government is essentially leading the country and dictating budget and spend within the UK economy, the sustainability of individual businesses and organisations will always be determined by the drive and innovation of their individual leaders and employees.

Ruth Lopardo, Entrepreneur/Founder of Love It Love It Love It www.loveitloveitloveit.co.uk Online Children’s Clothing Store

“My thoughts on the coalition as a business owner are that I’m concerned that the government will be stable enough in the medium term to see the fledgling economic recovery through without tipping the country back in to recession, especially with a Chancellor as inexperienced as George Osborne.   The Conservatives are often seen as the party of business, and whilst the Lib Dems are an unknown quantity in Government they may bring a fresh approach.  However, the current economic situation will give both the Government and businesses a very rocky ride.  The scale of spending cuts proposed by the coalition to cut the budget deficit is also of concern; if lots of customers are losing their jobs or cutting back spending in case they lose their jobs that can only be bad for business.  On a personal note, as a children’s clothing retailer, I would be very much against the application of normal rate VAT to kids clothes, that would be a disaster for my customers and for my business.”

Liz Jackson – MD of Great Guns Marketing www.greatgunsmarketing.co.uk

“I’m very pleased that after much deliberation the Conservatives and Liberal Democrats have finally struck a deal. If they can put their differences aside and work for the common good then I see no reason why it shouldn’t be a success. Undoubtedly what we need right now is a government that acts quickly in cutting the deficit, removes the ludicrous ‘jobs tax’ and believes in public sector growth. Also, I think it is good to see wise political minds such as Vince Cable being drafted into the cabinet as he clearly has a vast array of political and financial knowledge that will help lead the British economy from the brink of bankruptcy towards growth.”

Roger Allen, MD of Zeta

“Britain desperately needs a stable government that addresses the issues at hand clearly without the ‘spin’ and double speak which was synonymous of New Labour. The new Con-Lib coalition will combine Tory realism with Liberal policies. Political stability and sound financial management are the foundations that businesses need to prosper.” Roger also shared his opinion to leading business website, Business Wings.

Hessia Fernandes, Entrepreneur/Founder of www.cooltribe.com -  Online Green Social network

“The coalition was born more out of need than idealism so I am slightly suspicious of its agenda and its ability to last. But having said that, there is a real opportunity for both parties to make it work.  I am at the moment reserving judgement as we haven’t yet passed the PR/spin phase.  I am genuinely interested to see what happens in the next few weeks.  As a small business, my main point of concern is George Osbourne´s inexperience at managing projects of this scale, after all the economy is in dire straits and it feels like we´ve given the little schoolboy the titanic to captain in a sea full of icebergs.  For my business to grow I need a growing economy where businesses will invest in online marketing so I just hope that the budget deficit cuts don’t put too many people out of work and don’t push businesses to be more cautious with their marketing spend.”

Commenting on the 13th May 2010, Clive Sexton – Director of leading Global Interim Management Provider –Impact Executives

“49 days to the emergency budget, 4 days to parliament assembling, 11 days to the Queens speech. It is inevitable that there will be significant and major cuts across the Public Sector, inevitable union strife, in addition there are concerns that there will also be civil unrest also across the UK, this has been building for sometime. Unavoidable higher taxes, VAT going up to 20%. So the Private sector just needs to draw a line under it all, look at new markets beyond the UK and Eurozone, where there is growth opportunity and come up with totally new propositions for the UK market and adapt those on a country by country basis and lift itself out very positively of the demise we have been in this past year plus and GO FOR POSTIVE CHANGE AND GROWTH STRATEGIES, which will be driven by INNOVATION.”

Siobhan Bales, Managing Director of Managing Director of bgroup creative agency & bdaily business news network NE – www.thebgroup.co.uk

“The coalition fills me with a real mix of dread and hope. Dread becuase of the fundamental belief systems of each party being so opposed, with liberalism wanting to take more from the self made business people, and Tories rebalancing the tax system to encourage entrepreneurship – business people pushing to grow and develop their businesses to the next level. It is a time when we don’t know the economic support infrastructure for our regions going forward. Will the coalition disbanned the RDAs or Business Links, what will happen to the real spend in 2010/11/12 on public health, tourism and enterprise promotion. All of these decisions will have a significant impact on the strategy of both of my businesses. Hope lives in a new administration, not as tired and wanting to make their mark. Successful business startup and growth sits at the heart of our economic growth in the UK. It is essential to support our businesses and create fast wins, to move confidence and opportunity for growth across our regions. This government may have the right mix to do this”.

Jamie Gavin – Managing Director inPressOnline www.inpressonline.com

“I believe the Conservatives are trying to appeal to small businesses by offering normal incentives like waving N.I contributions for the first registered employee etc – which is all well and good, but I worry that if they are unable to live up to expectations and effectively recover the state of the economy there will be no economy left to operate in under con-lib.”

So what is the future for our industries (Marketing, Digital Communications and PR)?

Did our former government understand the value of the creative industries? My answer is no. They largely failed to demonstrate themselves as good communicators as you can read above. Labour is a great example of when PR goes wrong, and how to not conduct crisis communications!

What about Digital? The report for a digital Britain ensured a strong digital economy by 2020 by promising all broadband access by 2012.  Gordon Brown came across well using industry terms and  knowing exactly what he was talking about and understood the value of digital communications. I personally think it was just web-wash – another ‘promise’ that would never surface if they came to power.

However business owners and executives are hopeful that the new alliance will help British businesses perform better. I guess we have to wait and see…