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Banks, Lenders & Investors Cash Flow & Forecasting Finance General

Is short term investment damaging future business prosperity?

For many years, the UK economy has depended heavily on consumer spending and on property speculation.
This may have led investors, even pension funds that require steady returns over many years, to focus too heavily on short term investment and gain and, therefore, on quarterly or annual reports and results thus undermining their willingness to wait for future returns.
However, the creative infrastructure that led to such inventions as the steam engine depended not only on “lightbulb” moments but also on people who were educated, skilled and above all had the time to think slowly and in depth.
Recently the Bank of England’s Chief Economist, Andy Haldane, has been worrying that the development of the internet has also undermined the ability to think slowly and in depth and thus the patience needed for business innovation and progress.
If UK businesses, from SMEs to large corporations, are to remain at the forefront of innovation they will need continued investment in the best brains, in research and development and in a decent infrastructure and that means investors willing to be patient for the long haul.
Is it time that more emphasis was put on education, training, employee development and perhaps even public investment in longer term projects to emphasise the importance of sustained effort and patience?

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Banks, Lenders & Investors Business Development & Marketing Finance General Rescue, Restructuring & Recovery

How can SMEs pay for innovation?

SMEs are the lifeblood of an economy and generally have been the most innovative businesses.
It is often said that while the big corporations have the resources for large-scale, ongoing R & D their effort is largely focused on existing products.
But while historically many new ideas have originated from inventors “tinkering” in their spare time, this is less likely in the 21st Century.
Very few SMEs will have a turnover with a sufficient margin to allow for funding ongoing research and development, especially in the highly technical, software, biomedical and scientific fields.
Yet to survive and prosper, SMEs need to find their niche and then innovation to stay ahead of the competition. Can this be done?
There are a number of options. In the UK there is the STEM (Science, Technology, Engineering and Maths) project in schools, supported by businesses, which is designed to encourage the next generation of innovators.
There are also collaborations between businesses and universities, both in the UK and elsewhere.
There is also an EU programme specifically designed to support innovative SMEs with funding and by connecting them with mentoring and other partners. Horizon 2020 can invest up to £2 million in a company and is worth looking at if you are truly innovative: www.h2020uk.org/smes.
Do also contact us at K2 as we are familiar with this and other sources of finance.