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Media Releases
2005

08 May
2005

Grampian business survey fuels 'Doing business in the North East' debate

Over 100 senior business executives gathered at the University of Aberdeen Business School last night to debate the results of a wide ranging new survey focussed on 'Doing business in the North East'.

The debate, organised by Shepherd and Wedderburn and the University of Aberdeen Business School, was hosted by television presenter Kaye Adams. Debate topics ranged in subject matter from the relationship between businesses and Higher Education establishments to professional skills gaps, local transport infrastructure, restrictive business legislation and the North East's food and renewable energy industries.

The event hinged on the results of an independent survey, commissioned by Shepherd and Wedderburn and the University of Aberdeen business school. The survey of 88 senior executives in Grampian indicates that the region is increasingly international in its outlook, with 52% operating abroad and 42% seeing an expansion into new markets as a major priority in 2005.

The survey suggests that confidence within the oil and gas sector is particularly strong at the moment, with 60% of directors in the industry anticipating an upturn in their company's fortunes during 2005. That sense of optimism is mirrored in the manufacturing and transport sectors where both score higher than the average when asked whether they are more confident than a year ago (67% for both sectors compared to the average 54%). Only 14% are less confident than 12 months ago.

In terms of priorities for North East businesses, 'controlling costs' is clearly the major concern, with 55% of respondents indicating that it is their top priority for the year ahead. The problem appears to be especially acute in the manufacturing and retail sectors where margins are particularly tight. The only area where 'controlling costs' is not considered the main priority by respondents – but is still ranked in second place - is in the oil and gas sector, where 'closer customer relations' ranks highest.

Richard Cockburn, a partner heading Shepherd and Wedderburn's Aberdeen office said:
"The results of the survey paint a very encouraging picture of business in the North East with companies prioritising closer customer relations, expansion into new markets and launching new products. But surprisingly, the research suggested that acquiring other businesses and raising additional capital are lower priorities. On the face of it, it might appear that this demonstrates a degree of caution. In a business community with such a clearly optimistic outlook, however, it is far more likely that the plateau in economic activity over the last few years is still having an effect on forward planning.

"The survey identifies two major factors limiting growth. The first, which is of particular concern to the oil and gas, construction and services sectors, is 'shortage of skilled labour'. This is clearly a wider issue nationally.

"The second major factor identified was 'red tape or regulation'. Companies across the UK are increasingly concerned about the burden that red-tape and regulation is putting on their work force and that has clearly impacted with equal force in the North East. Increasingly stringent guidelines, minimum standards and reporting procedures along with legally enforced government regulations mean that some businesses are struggling to keep up with the administrative millstone. This is where your lawyer may be able to help lighten the load and free up staff to concentrate on their core skills and targets."

The survey also identified the contribution that universities could make towards business growth in the North East. As well as practical skills, businesses want graduates to have an awareness of the ethics involved in business, strong time management skills and the ability to work within teams.

Professor Patrick Dawson, Head of the University of Aberdeen Business School said:
"It's clear that North East businesses want graduates who are able to hit the ground running when they join the company. Some respondents suggested that businesses themselves could help contribute to developing commercial awareness by allowing executives to deliver lectures and through permitting more workplace shadowing. Smaller companies were particularly open to this."

"Overall there is a definite feeling that universities must teach more than just theory. Graduates need to be given practical case examples of business organisations in order to more fully explore the dynamic relationship between theory and practice. The foundation of management learning and business development often rests on the application of theory to practical situations."


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