The New Business Psyche report provides a snapshot of the attitudes and cultural factors likely to shape the new economic era. The report focuses discussion on several key areas: bad business behaviour; a new era of regulation; the risk-aversion culture and the business people of tomorrow. It also includes an illustrative spotlight on the UK biotechnology industry which encapsulates many of the issues raised through the rest of the report.
The report reveals an emerging tension within the business community, between cultural expectations and economic imperatives. On the one hand, there is deep-rooted concern regarding the stigmatising effects of the recession on entrepreneurship. As David Kern, Chief Economist, The British Chambers of Commerce, put it:
Beyond speculative banking, which must be better regulated, the wider condemnation and demonisation of entrepreneurship will undoubtedly damage the economy. People that innovate, develop ideas and take risks should be rewarded.
This widespread concern was echoed by FT journalist and author Nick Kochan who also warned that the recession “has strengthened the hand of those who would look to the state, to government, to implement a centralising, rule-book type of mentality.”
By contrast, some held that neither regulation, nor risk-aversion are new phenomena. Edward Mason – a former British diplomat now working in ethical investment – claims that regulation has always existed to impose socially beneficial limits on the free market. Mason suggests that the cultural shift towards responsibility may have been exacerbated by the recession but it in fact predates it:
...making money at the expense of the environment or by means of exploitation of suppliers or communities is becoming less and less socially acceptable. The amount of money that executives pay themselves is also under greater shareholder and public scrutiny than ever.
Risk-aversion within the broader business environment cannot be extricated from a heavy reliance on the financial sector and the resulting imbalance in investment policy. As Nick Kochan pointed out, “Despite the prevalence of risk-taking in the pre-recession financial sector, there has not been much risk-taking when it comes to productive investment for a long time”. The vast reductions in UK state-led investment in research and development are perceived as indicative of a deep-rooted culture of risk-aversion in place long before the crash of 2008.
In contrast to the business community, a survey of 300 London students revealed an overwhelmingly critical assessment of business culture. Nearly 90% felt that there was ‘too much greed in business’; 80% condemned broader society, agreeing that ‘too many people in society are materialistic’. Surprisingly, this apparent abhorrence of the business world did not translate into a rejection of entrepreneurship or associated values.
This report reveals the complexity of culture and attitudes that will be critical to the formation of the post-recession business world. There is no inevitability about the future of business and it cannot be considered in purely economic terms. The new business psyche will be multifaceted; shaped as much by politicians, business people and consumers as it will be the impersonal forces of economics.