UK: Enterprise - Winter 2016

The Rules Of Business Are Changing
Last Updated: 28 November 2016
Article by Smith & Williamson


High touch, peace of mind

By Guy Rigby

Technology is a great enabler, but some of the ways it's changing our lives may not always be for the better.

I'm not talking about an increasing addiction to consulting our mobile phones at almost every opportunity (although this is a personal concern – I almost walked into an unsuspecting lamppost the other day!), but the fact that the sheer depth and breadth of the information available is impacting our behaviour. We're all turning into so-called 'experts' on matters that we previously knew little or nothing about. The 'internet of everything' has arrived, enabling us to be increasingly independent through apps and other resources, most of which are either free or very cheap.

Nowhere is this more prevalent than in the world of financial services, where online information and advice are prolific. We used to think that DIY just applied to home improvements. Now you can, in theory, run your entire financial life using online information and resources.

I call this phenomenon the 'world of free' — a world where we've become used to someone else paying for our consumption — for example, the advertisers on Google and Facebook, who pay for them to deliver the services we use. This has spawned a host of other high tech, low cost, DIY service providers, who often provide a bit of software and a helpline.

A little knowledge can be a dangerous thing and, in the financial world, mistakes can be costly. For example, details of tax legislation and the guidance that can be found online don't come close to the practical advice and guidance available from a seasoned tax practitioner. Similarly, the advice of an experienced accountant, corporate financier or investment manager simply can't be replicated online.

The drivers behind the DIY approach are generally twofold — a lack of understanding on behalf of the user or a desire to save money. While the latter may be tempting, it's worth remembering the old adage: 'if you think professional advice is expensive, try the amateur variety'.

At Smith & Williamson, we don't believe in the low touch, DIY model. True value and peace of mind can only be achieved through a high touch, expert-led service, where real people with relevant experience can help clients navigate what is an increasingly perilous financial journey.

We hope you enjoy this latest issue of Enterprise.

Until next time.


The ScaleUp Institute's CEO, Irene Graham, explains what the organisation has been doing to help create the most effective environment for growth businesses to 'scale to the future' with benefits across the UK economy.

Britain has traditionally been a trailblazer in establishing world-leading institutions that advance public understanding on national issues. The ScaleUp Institute is one of the newest of this illustrious breed. Founded in 2015, its purpose is to make the UK the best place in the world to scale a business and advance understanding of the importance of scale-ups in delivering prosperity, economic benefit and opportunity to the nation as a whole.

The ScaleUp Institute's work builds upon the findings of the Scale-Up Report, which was published in 2014. The report concluded that if the UK could close the scale-up gap — the extent to which our companies lag behind others in the G8 economies in their capacity to achieve global scale — we will secure significant economic value and a competitive advantage for Britain for generations to come.

As a private sector, not-for-profit organisation, the ScaleUp Institute has attracted support from a broad ecosystem, including the Goldman Sachs Foundation, Google, the Business Growth Fund, the London Stock Exchange, Innovate UK and several universities, as well as Smith & Williamson.

With a clear focus on how the UK "leans in" to support its growing businesses to scale up, the ScaleUp Institute has taken a strategic view of the ecosystem. The Institute is helping to stimulate new activity and spread best practice. It's undertaking research, delivering thought leadership, and working with partners in areas where it can have a lasting impact in helping ambitious businesses fulfil their potential.

Effective collaboration

The Institute is collaborating with Nesta and the Start Up Europe Partnership on best practice and top tips for effective corporate collaboration. The work — Scaling Together — gives practical guidance on the issues faced by growth companies when seeking to work with larger businesses.

With Barclays and the universities of Oxford and Cambridge, the Institute has carried out a more detailed review of the finance and skills needs of scale-up businesses and the practical policy steps that can be taken to address them.

The ScaleUp Institute also partnered with the CBI, Lloyds Bank and Aston Business School to publish a report highlighting the critical role that scale-ups play in solving the UK's productivity puzzle.

Education programmes

With the support of the Goldman Sachs Foundation, 10,000 Small Businesses UK and Innovate UK, the ScaleUp Institute has held two of its certified education programmes on 'Driving Economic Growth through ScaleUp Businesses and Ecosystems', led by Professor Dan Isenberg of Babson Executive Education and Columbia Business School.

Through interactive lectures, exercises, case discussions, working groups and projects, these programmes have brought together more than 80 Local Enterprise Partnerships (LEPs), Growth Hubs and local business leaders to focus on the growth and scale-up challenges affecting their specific areas.


How long before a robot can do your job?

Do you remember the world before the internet? Just 25 years ago there was no email and few people had mobile phones. Businesses relied on landlines, fax machines and the post to communicate. We found out what was going on in the world by reading a hard copy of a newspaper or watching and listening to the news on television and radio. To buy anything — from groceries and clothes to furniture and domestic appliances — you had to physically enter a shop. To a millennial, this must seem ridiculous now.

Technology is changing everything

Since the internet started to become part of everyday life in the 1990s, technology has fundamentally changed the world and the way business works. We are inundated with information on our smartphones 24-7. We use the internet for almost everything and for many people it would be impossible to imagine life without it. In fact, it's now perfectly possible for people to never set foot in a shop or office again.

The millennial generation, born between about 1980 and 2000, will form 50% of the global workforce by 20201. Having grown up with technology, their ability to use it sets them apart from the generation that went before. And their career aspirations are different too; they don't necessarily want a job for life — they want flexibility, and varied and interesting roles that give them a sense of purpose. Attracting and retaining talented and tech-savvy millennials will be key to the future success of any organisation.

Email, the cloud, video conferencing, social media and virtual offices have globalised the business world. These technological developments have paved the way for increasingly flexible working practices, such as working from home and in co-working spaces.

Online platforms make it easier for firms to find the people they need, and for freelancers to advertise their skills. The rise of the so-called 'gig economy' has empowered people and given them freedom to pick and choose short-term roles and projects.

Robotics leaves the sci fi realm

As technology and artificial intelligence (AI) become more sophisticated, experts say we are on the verge of an automation revolution, with everything about the way businesses produce, manufacture and deliver goods about to change.

The large tech companies are all investing heavily in AI technology, developing everything from self-driving cars to medical diagnostic tools. In fact, 2016 has been dubbed by some 'the year of the robot', marking a turning point in the balance between work done by robots and humans. The conventional wisdom has been that those in the creative industries have less to fear from robotics, but think about this: Google has recently announced that its AI system, Google Brain, has learned to write poetry.

AI is also a key component of the internet of things — where devices connect with each other and communicate with us to get work done, among other things. And we can be sure that many of the 3D printing or 'additive manufacturing' applications now being developed are causing a rethink in many industries.

Finance for everyone

The nature of finance has been transformed too. The financial technology industry or 'fintech' is booming, with billions of dollars of investment flooding into companies that are revolutionising the way we lend, invest and make payments. The online alternative finance market grew by 84% to Ł3.2bn in 20152. This innovative, technology-led approach is giving entrepreneurs and SMEs access to the finance they need and which might otherwise be impossible to secure, through various new types of equity, debt and reward-based opportunities. Internet-based crowdfunding and peer-to-peer lending is fuelling this 'democratisation' of finance.

Then there's the blockchain, explained in Nic Cary's article on page 10, which has the potential to completely overhaul the global banking system.

The world of free

People are increasingly expecting more for less. During the most recent recession people got used to not paying for things or only buying at a discount. We pick up free newspapers and magazines on our way to work, we build up points on loyalty cards for bonus coffees and once at the office we use the company internet for nothing to log into our free email and Facebook accounts.

The economy may now be stronger, but many people still don't want to pay for many of the things they used to, or can't afford to. Thanks to Google you can find out almost anything you need to know on the internet. There's an obvious correlation between tough times and innovation, which we can see in the success of cloud-based financial services software companies such as Xero and, which enable small businesses to tackle tasks such as accounting, billing and supply chain management by themselves.

This DIY industry is flourishing and is a serious challenge to the normal order of business. It's putting traditional professional providers of these types of services under pressure to differentiate themselves and go the extra mile to add value.

Fast forward to the future

These technologies and changing attitudes towards work mean that industries all over the world will need to completely transform everything from strategy and customer engagement, to operations and compliance. Business leaders need to prioritise planning for these rapidly changing rules of business and capitalise on them — not just for success, but for their future survival.

To read this Newsletter in full, please click here.




We have taken great care to ensure the accuracy of this newsletter. However, the newsletter is written in general terms and you are strongly recommended to seek specific advice before taking any action based on the information it contains. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. © Smith & Williamson Holdings Limited 2016. Code: 16/1176 Expiry: 21/05/2017

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