Comment: Local businesses need to show adaptability

Monday 05 November 2018

Internationally-focused businesses in the Channel Islands and Isle of Man need to demonstrate their ability to adapt, as political headwinds threaten to disrupt global trade patterns, according to HSBC’s Head of Commercial Banking in the Channel Islands and Isle of Man.

Warwick Long says that while businesses are staying positive, there is an increasing worry about protectionism, "that's reducing their appetite to grow through international trade."

“For globally-dynamic busineses in the Channel Islands and Isle of Man, this means that now more than ever, they need to show their understanding of global markets and demonstrate an ability to adapt," he added.

"As IFCs immersed in cross-border trade, these findings are particularly pertinent for financial services firms and those who have invested heavily in building relationships with overseas markets such as China. There are challenges but also real opportunities, and those that can best demonstrate their agility will emerge the winners.”

His comments come on the heels of a new HSBC survey of over 8,500 companies in 34 markets, ‘Navigator: Now, next and how for business.' It showed that more than three quarters (78%) of companies are positive about the trading environment, rising to 86% in ASEAN countries and 82% in the EU. Yet at the same time, political headwinds are gaining strength as 63% of firms think governments are becoming more protective of their home economies.

For those companies with a negative outlook on their company’s prospects, tariffs and the US-China trade dispute are the main reasons for pessimism (31% each). In mainland China and Hong Kong, markets that Jersey, Guernsey and the Isle of Man have built strong links with over recent years, the political dispute with the US is the greatest concern (65% and 53% respectively).

The survey also showed that businesses are placing a real emphasis on skills development and productivity enhancements. More than one-in-five (22%) businesses reported having invested in research and technology over the last two years, three quarters (75%) looking to data to drive business optimisation and more than a quarter (26%) considering technological advancement as the top reason for choosing a supplier.

Mr Long said: “All sectors in the islands should sit up and take notice of these findings. This report strongly suggests that technology, digitisation and data will play an increasingly important strategic role by enabling businesses to develop their products and services, reach new customers and cut costs by improving operational efficiency.”