In late January, the International Monetary Fund released its global expansion forecast for 2023. Fortunately, for most of the world’s largest economies, the outlook is looking much better than it was in late 2022, when the global recession seemed unstoppable. The big exception among many countries is Great Britain.
If the IMF’s predictions prove correct, the results are likely to be transformative for everyone, including business people. The recession will occur in a living wage environment. This effect will be felt even more clearly. However, even in the midst of these challenges, entrepreneurs will have opportunities to spread and expand their businesses.
There is some optimism that UK entrepreneurs will be able to expand during the recession. This is because they have had low growth rates for a long time.
The UK economy has struggled to grow by more than 3% since 2000. In fact, it has done so only twice since 2011.
The country’s growth rate in 2014 was 3.23%, with expansion in manufacturing and services, strong household spending, and good export performance. The second was in 2021. It happened due to a return after COVID-19.
The economy contracted 11% in 2020, meaning that a 7.54% recovery in 2021 was not enough to return the economy to pre-pandemic levels.
Despite these challenges, several large and successful start-ups were founded during that period. Deliveroo, GymShark and What3Words were founded after 2011, when growth was particularly slow. In other words, under conditions of low growth, it is impossible to revive and scale a successful business.
change cycle
While UK employers should certainly do their best to identify and seize these opportunities, the looming recession also shows they need to advocate for change.
The fact that the UK is the only G7 economy to fall into recession in 2023 shows just how much economic decline results from actions taken by those in power.
While entrepreneurs cannot make policy on their own, they can collectively lobby and pressure government officials at all levels to ease the conditions for entrepreneurs and thereby fuel growth. This means making it as easy as possible to export to the country’s closest and largest trading partners, especially the European Union.
But entrepreneurs can also advocate for change, with mutual support, to ensure failure rates are low and companies are better positioned to scale quickly when conditions are right.
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