SMEs are driving growth and investment
Andrew Harvey, national chairman of the Chartered Institute of Marketing, and Business Development and communications director of law firm, Dickinson Dees LLP, shares his thoughts on the current state of the marketing landscape.
The Chartered Institute of Marketing (CIM), of which I have just completed my first year as National Chairman, has found the Small to Medium business sector (SMEs) to be in upbeat mood to start this new year.
As this is the sector that many commentators, as well as Government sources, believe will be the driver to the recovery for our economy, this has to be good news, especially for the North East of England where most businesses fall into this category.
Overall, small organisations were more confident than large companies that their business could meet its financial and growth targets: 45 per cent of micro businesses and 38 per cent of small businesses were more confident this year than last year, while almost a third (29%) of mid-sized and a quarter (25%) of large companies expressed declining confidence.
This latest information comes from the Marketing Confidence Monitor launched by CIM at the end of 2012 supported by Deloitte and Forbes. The findings, produced from a weighted representative survey of more than 1,200 UK marketing professionals, showed that small and medium sized companies are planning strong investment and expecting increases in headcount in the coming year, particularly in their marketing departments. Larger companies, by contrast, are setting more cautious growth targets, reining in marketing budgets and expecting reductions in staff numbers.
On digging a little deeper I found particularly high confidence from marketers in the manufacturing and construction industries, so important for UK exports and our trade balance, and particularly good news for the North East. This was in spite of the last quarterly trade figures for those sectors. Not surprisingly, it showed there is low confidence in the banking and financial services sector
Marketing plays a crucial role in driving growth and performance, and marketers are uniquely positioned between the business and the customer. They understand how consumer confidence and business sentiment interact. It is the marketing teams who are most likely to come up with the ideas and initiatives to grow the business.
It’s encouraging, therefore, to see that small businesses are pressing forward with marketing investment and jobs - critical for fuelling growth - but it’s worrying that so many large companies are still expressing uncertainty. Times are clearly still very tough for everyone.
CIM’s new study produced an overall confidence score of +4.12, on a scale of +/-100, indicating some cautious optimism amid otherwise widespread uncertainty about the next 12 months. We’ll be updating our confidence index every three months, so we’ll be able to track whether those intentions translate into the beginnings of a real recovery, and we will make the data available to businesses to help them plan ahead.
The economy is undoubtedly fragile, with an uncertain political stage, with possible changes in Europe and uncertainty in Northern Africa. But we must not allow ourselves to talk business into recession. Instead of talk of triple recession, let’s see our glass as half full instead of half empty. All the evidence of past recessions has shown that it is those companies who go on investing in marketing activity throughout a recession that come out of it faster and stronger than those who cut their investment.