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Unlike many other countries in the crisis-ridden European Union, Britain’s economy is still generally considered to quite stable, considering the fact that countries like Spain, France, and Italy are now much worse than they would like to believe.
Spain and Italy especially, have been undergoing a deep recession, and would likely continue that way for the next quarter. Britain, which has practically adopted a lackadaisical approach to the euro crisis, is doing much better than a lot of her neighbor countries.
The country’s service sector is slowly but steadily treading the right path; and the manufacturing sector, though yet to find its footing, could certainly be worse.
But despite the recent fortunes of the British economy, and the exceedingly immense opportunities that exist compared to economies of other countries around the world, big corporations in the country are still sitting ducks simply because they remain reluctant to invest or take huge but necessary risks.
Even worse, consumers are sensing the economic constipation, and theyas well are hunkering down. Philip Clarke, the Tesco boss, confirmed on Wednesday that his polling of shoppers found that they have given up on a hope of an upturn. They are switching to the shop’s value range in ever greater numbers. Sales of value range products were up 10% within the year.
What has become very obvious is the fact that someone has to make the big move – the government or the big corporations.
While some corporate apologists are always keen to point out that the government is the number one barrier for businesses, and that the government needs to get out of the way so that businesses cancreate more wealth for everyone.
What is really wrong with this assertion is the fact that the government has long been out of the way. In fact, since the financial crisis that occurred several years ago, governments across the world have limited their activities, and cut spending in every possible corner. Some have even gone as far as granting huge tax breaks to some corporate giants, thereby risking political crucifixion by the middle class and low income earners in their respective countries.
But even with this, the majority of government spending has continued to go in paying unemployment benefits and welfare bills.
So it is only right to ask what the businesses are doing, even after the government has cut back as much as humanly possible. The truth is, businesses are simply scared of moving out of their comfortzones, and they have simply refused to take the risk.
While it is true that the government still has more to dowith regard to creating more leeway for the big businesses, the businesses themselves should also bear in mind one of the most basic of business principles – no risk, no reward.
