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Why businesses are choosing people over plant

Tom Rathborn Tom Rathborn

We asked 10,000 business leaders around the world about their investment plans. Here's what we found out.

As all investment outlook indicators improved over the last six months, I’d hope to see that business leaders are intending to put their increased revenue and profit back into their business.

Businesses are expecting to invest more in their staff, research and development programmes, and technology over new buildings and machinery, proving that your people are more important than ever.

The UK mid-market is intending to focus this investment on staff, research and development, and technology, over larger capital outlays on new buildings and machinery. Two-thirds of firms expect to increase their investment in technology over the next 12 months. This compares to just 33% of firms expecting to invest in new buildings.

The research shows that this isn’t unique to the UK. Staff, research and development, and technology investment is also the focus at the global level.

There appear to be several drivers behind this. Businesses are still facing large levels of economic uncertainty. In the UK, 65% of respondents said economic uncertainty is a barrier to growth, slightly up on the global average of 61%. We may be seeing a reluctance to invest too heavily in fixed assets before the dust fully settles on post-COVID-19 life.

The movement online during coronavirus also changed the value drivers for organisations. Fancy offices and prime locations were made redundant in the online setting, with the value being brought almost exclusively through their people, products, and services, all of which would be supported by various technology platforms.

Given that the move to online working has made it easier for organisations to reach new markets and audiences, it makes sense that the bulk of future investment will move into these areas. To take advantage of new global trends they're investing in flexible, agile solutions rather than new, larger locations.

Mid-market leaders recognise that with the incredible pace of change happening in our working environment, they need to invest to remain competitive. Our survey suggests they're focusing on the right areas.

Business investment at a glance – UK vs global


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What our experts say...

“Coronavirus has drawn a line in the sand for business leaders in that they can no longer continue to be insulated from the ever-increasing rate of change and disruption going on around them. Organisations need to rethink how they operate with a focus on optimising for pace and agility. Agility is fast becoming a non-negotiable leadership skill and one that can deliver higher business performance year in and year out”

Alan Dale, Partner, Grant Thornton UK LLP

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