As the Confederation of British Industry (CBI) opened its annual conference earlier this month, it had a clear message for the government: don’t allow long-term industrial planning to be sucked into the black hole called Brexit.
In a survey conducted by the trade body in the run-up to the event, almost 90 per cent of firms said that a coherent industrial strategy would drive up UK living standards – but only if policymakers could avoid being consumed by the process and politics of withdrawing from the EU.
Delegates exhibited little optimism in this regard, which is hardly surprising given the confusion that surrounds almost every aspect of the UK’s departure from the world’s largest trading bloc.
The CBI’s research showed that the “uncertain economic outlook” and “uncertainty around post-Brexit trade” were the two key constraints on companies’ plans to invest.
The Bank of England’s forecast for investment in the UK is down 20 per cent compared to the month before the EU referendum, and Mark Carney has reiterated his view that companies are holding back while they await the outcome of Brexit negotiations.
So, in the age of ubiquitous “Brexit uncertainty” (a Google News search for the phrase returns 62,500 results), is there anything businesses can be sure of?
Another recent survey reminds us powerfully of a long-established but often neglected truth: there has always been a clear and demonstrable correlation between investment in brand and long-term commercial success.
BrandZ, published by WPP research firm Kantar Millward Brown, has for many years compiled a unique ranking of the world’s most valuable brands, based on interviews with over three million consumers and analysis of financial performance.
This year saw the first ever ranking of UK brands, which was topped by Vodafone, with HSBC and Shell in second and third place respectively.
The BrandZ Top 50 includes some of the UK’s biggest corporations across a wide range of industries and reflects the nation’s status as a global centre for financial services, energy exploration and communications.
The names on the list are steeped in heritage. They have endured because they have a relentless focus on remaining relevant to their customers throughout periods of great change, and they show the importance that brand will play in Britain’s post-Brexit future.
Many of them have captured and championed what it means to be “made in the UK”, something that international consumers value highly, and as a result the Top 50 earn more than half of their revenues outside the UK. Some brands, such as Lipton, Dyson, Asos, and Vodafone, are more popular abroad than they are at home.
As we go it alone, “Brand Britain” will become even more important. The UK’s largest and smallest businesses will need to renew their focus on differentiation in a crowded market, here and abroad, if they are to continue to command premium pricing.
The BrandZ research shows that international consumers see UK goods as expensive, but also prestigious and trustworthy – hence the current strong predisposition to buy British at a premium price.
Companies need to capitalise on that, while also highlighting innovations that make them less vulnerable to disruption from younger and more agile rivals.
This is particularly important as traditional models of retail distribution are increasingly challenged by the likes of Amazon.
Brand may not be listed as an asset in a company’s report and accounts, but its value, and the need to manage it with great care and attention, is well understood by the smartest business leaders.
If you had invested equally over the last decade in the top 10 global brands identified by BrandZ, you would have outperformed the S&P 500 Index by over 70 per cent and the MSCI by over four times.
In other words, investment in innovation and strong brands yields enhanced returns. It is the antidote to short-termism, it contributes hugely to the success of the wider economy, and it plays an essential role in helping to create jobs and prosperity.
In uncertain times, it pays to remind ourselves of those facts.