Is patience being used to justify a lack of investment in productivity?

It would be a mistake to expect business activity to take off immediately after the UK election, although some will have hoped it would.

Three key processes will have to be completed and, whatever SMEs and others might wish, they are going to take time.

So although there is a growing clamour of business voices on the subject of the UK’s continued EU membership, patience is going to be needed. Rushing the negotiations over revamping various regulations is not likely to lead to a result all can live with.

Similarly, there are two more months to go before the Chancellor delivers a promised additional budget in July, which has contained promises to help SMEs. Again patience is going to be needed not only to find out what the proposals are but also until those proposals are enacted.

Finally, there is the much discussed issue of low UK productivity. Bank of England Governor Mark Carney added further weight to the argument that it is in part the result of businesses failing to invest in more up to date technology and equipment, preferring instead to put off investment and in the short-term use low-skill workers, some of them from other EU countries, who can be more easily got rid of should the need arise.

To improve productivity means not only investment in new kit, it also requires investment in developing a skilled workforce.

While it could be argued that this is at least something SMEs could risk investing in now, assuming they can raise the finance, it will still require patience before they see the fruits of that investment in productivity.

So should business be at least starting to take some risks and start investing, or is it wiser to tread water and remain patient for a while yet?

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