Confidence and investment are at the core of any thriving business sector. Tough times take their toll however, and most notably during tough economic times, confidence has a tendency to fall and often takes investment tumbling down with it. Recent figures suggest this is what appears to be happening in the rural business sector right now. Add to this, the general shift in the UK population towards living, working and consuming in urban areas over recent years and you begin to see the problem looming over our rural business community.
In the UK, according to the Office for National Statistics, less than one-third of UK land is classified as urban, yet this space is home to at least 60% of the country’s population. In a nutshell, this is bad good news for rural business. Against the backdrop of this shifting of the population towards urban areas, there has been for some time now, an effort being made to restore the balance by attracting people back to rural areas. That said, in any of the commentaries you read on the subject, there seems to be two sorts of rural. There is the rural, which is within easy reach of urban areas and there is the rural, which is remote. Whilst both of these rural areas are affected by lack of confidence and investment, there is little doubt that the “remote” rural is suffering more. Irrespective of the effort to encourage people to embrace the “good life”, which remote rural living can bring, the state of the rural business economy in the UK is not proving a huge source of encouragement for people considering taking the plunge, which again is undermining confidence and discouraging investment.
In fact, according to the second quarter findings of the Rural Economy Index, rural businesses have experienced a significant drop in both confidence and investment during quarter 2 of 2012. With confidence quoted as down on the first quarter by 25% and investment (in non-agricultural businesses) down by 15% during the same period, there appears to be only bad news on the horizon. When it comes to reasons for this reduced confidence, while the Eurozone crisis and increasing costs most certainly play their part, there is no getting away from the fact that a major factor standing in the way of rural progress is the slow, or in some cases no, broadband coverage in many of these locations.
With more and more people relying on the internet to run their lives as well as their businesses, it is easily seen how important something as simple, yet as fundamental as a fast internet connection is to these areas. For people already living and working in these locations, inability to complete regulatory paperwork; to access online resources; to enjoy all the social, educational and economic benefits of fast broadband are just some of the reasons being quoted for this general lack of confidence. Add to this, the fact that many farming businesses in particular rely on the internet to attract tourists as well as making online sales, and the magnitude of this problem becomes clear. And, as far as attracting new people is concerned, the lack of broadband is a major stumbling block, particularly if they plan to run remote businesses.
Although the UK government has a goal to provide superfast broadband (at least 24 mbps) to 90% of rural areas and 2 mbps to all rural areas by 2015, current fears are that they simply won’t deliver. All the while, penalties are being dished out to farming families who fail to deliver their online regulatory paperwork, irrespective of the fact that they are operating with an internet connection that is slow, or worse still, non-existent. And to add insult to injury, resources to help develop their businesses are locked out of their reach because they exist solely online: access to which, some simply don’t have.
So what’s the solution? There is no doubt that rural community business owners need to work together to find solutions. These may include ways to network and achieve success together. They may mean lobbying Local Enterprise Partnerships (LEPs) to focus more on providing appropriate rural support, or encouraging collaboration between businesses in rural areas with those on the urban fringe. But irrespective of all of this, it may well be that the greater part of the solution is as straightforward as providing a broadband connection that works. Now that really is food for thought.
UHY Hacker Young Partnership can help you in all aspects of your business planning and monitoring. This will give you the comfort of knowing that you are planning to succeed despite external influences and can measure your success along the way. To find out more about how we could help your business call our AgriBusiness team on 01763 247321 or email email@example.com