The head of office for investment company BGF in Aberdeen has said he is “encouraged” by the determination of many Scottish business leaders to grow their companies despite the pandemic.
Mike Sibson highlighted the findings of a survey by research firm Delineate, on behalf of BGF, among more than 500 of the UK’s “growth economy” companies.
Despite everything last year threw at them, 74% of firms in Scotland were still motivated to grow their business in 2021.
Mr Sibson said it was “pretty tough” being a business owner these days but the survey underlined how resilient and resourceful they can be.
He added: “There are more than 21,000 growth economy businesses in the UK and over 1,200 of these are based in Scotland.
“With revenues between £2.5 million and £100m, these firms are good indicators of high-level business confidence across the country.”
Carried out during the final quarter of 2020, Delineate’s research looked at how the Covid-19 pandemic was impacting on activity and how businesses were changing the way they worked.
Mr Sibson said: “The events of 2020 undeniably led to changes in business activities and operations, with almost 60% of the companies in our survey saying the pandemic triggered permanent changes to their business models.
“In some cases, there’s been a discontinuation of aspects of their business.
“In others, there’s been greater investment in digital infrastructure as the new way of working becomes a permanent part of the future.
“It is further evidence of how digital technologies have come to the fore.
“The determination of business leaders to continue to grow their companies, despite the obvious Covid headwinds they battled throughout 2020, is encouraging.”
He added: “This confidence is all the more laudable when set against what they believe is the next barrier to growth – Brexit, where arguably the impact is still to come.
“Some 66% of Scottish respondents believe that Brexit will create significant barriers to growth for their business, compared to a UK average of 57%.”
“Imagine building a new factory when you don’t know whether you’ll be able to sell the goods you produce without tariffs.”
But the focus of businesses in 2020 was firmly on the pandemic, rather than Brexit, he said, adding: “In more normal circumstances the attention would have turned more directly, and much earlier, on the rapid countdown to the end of the year with no deal in place.
“Businesses dislike uncertainty. It is more challenging for them to make investment decisions without the certainty or visibility to forecast accurately.
“Imagine building a new factory when you don’t know whether you’ll be able to sell the goods you produce without tariffs; or investing overseas without knowing if you’ll be able to bring goods in and out without paying tariffs on them too.”
A strong pipeline for 2021 is already in place and we are optimistic this year will bring green shoots of recovery.”
Looking back on a year dominated by Covid-19, Mr Sibson said: “As an investment partner to almost 300 companies in the UK, BGF’s prime focus has always been on enabling ambitious, innovative companies to continue to grow, and our commitment to that was just as strong in 2020.
“Despite the uncertainties of 2020, we continued to invest in Scottish companies over the course of the year, adding some exciting new businesses to our portfolio, including European space launch company Orbex, which will make its first launch from Space Hub Sutherland in 2022.
“A strong pipeline for 2021 is already in place and we are optimistic this year will bring green shoots of recovery across the economy.
“With vaccines being deployed and what we hope will be freedoms gradually being reinstated, a bigger and better-than-anticipated bounce-back in economic activity might well be on the cards.
“Promisingly, 72% of growth company respondents say they are financially stable enough to pursue further growth.
“Only 19% have no requirement for further funding over the next 12 months – indicating growth will be mostly contingent on new investment.
“The best entrepreneurs know change and disruption isn’t always a bad thing.
“Many entrepreneurs who have or are in the process of growing a successful business have seen opportunities in a changing world.”