Time is now
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Lucy Armstrong, chair of the CBI’s SME Council, argues that businesses have put off investment decisions for too long.
I think private and family businesses are finally starting to see they need to make longer-term investment decisions. The main response to the economic situation over the last few years has been to play dead lions and say, ‘if I don’t move I’ll be ok’.
If businesses have survived this long they now have to make some long-term decisions and this is a real challenge – going for growth rather than just sitting back. While they might think it is better not to spend and invest, that is actually a higher-risk strategy.
No one is saying it is easy to invest. What doesn’t help is looking at the news every evening and hearing about how things are getting worse. People are hearing that the banks are not lending, and so they are not bothering to go and ask.
We are starting to see a number of alternatives to bank finance coming through but it is going to take time. Remember, all other sources of finance were squeezed out by the banks in the past because the banks were giving out so much money.
In terms of growth, the reality is we are bumping along and we have been for the last four years.
That is not going to change. I think what we are seeing now, this ‘slowly slowly’ growth, is going to be the new normal for at least a decade.