First things first – when I say that Thinking Bigger is of paramount economic importance, I don’t mean our blog. Though it might be nice to pin an economic upswing to the positive thinking nature of our articles, it might be a little too much in the way of wishful thinking – for now, anyway.
So, with that out of the way, just why is thinking bigger such an important economic philosophy? Well, if the results of a recent Institute of Directors (IoD) survey are anything to go by, thinking bigger could actually help the UK economy punch its way out of the shadow of looming recession.
IoD research is always a great indicator of how we’re thinking and feeling about the economy as a nation. Happily, the results from this most recent survey are promising, and a far cry from some of the headlines that you might have read in recent weeks.
In short, only one in three of the directors surveyed by the IoD (35 percent) said that they thought there was a high risk of the economy dipping into recession this year. Just over half (53 percent) thought that this risk was moderate. While that might not sound too much like thinking bigger, we think this is actually really important.
If you’ve been reading the papers in the last few weeks (and believed everything you read), you’d probably be pretty hard pushed to predict anything other than another long, deep recession. Indeed some of our bloggers have already vented their frustration at the feeling that we’re slowly being ‘talked into a recession’.
But with the continuing Eurozone fallout and the National Institute of Social and Economic Research predicting recession if government spending cuts continue, that more than half of the IoD’s respondents say otherwise is pretty impressive, and testament to the attitude of Britain’s small biz owners.
That spirit of triumph over adversity is actually picked up on by Graeme Leach, the IoD’s Chief Economist, with him noting that “despite all the doom and gloom in the media, only 1 in 3… think there is a high or very high risk of a recession in 2012.”
Of course, as is the case with any research of this kind, this is still just sentiment. Why so important, then, for the economy?
In short, confidence. How business owners feel about their finances is important far beyond just attitude – it affects everything from their spending to recruitment, investment through to expansion. Essentially, the degree to which we’re all thinking bigger has a huge impact on where the economy actually goes.
As Mr Leach explains, “the resounding message from the survey is the critical role of confidence at this stage in the economic cycle. If the euro-crisis stabilises, confidence could return relatively quickly and companies could dust down business investment and recruitment plans put on hold last year.”
So is that confidence there? Yes, and in some abundance. 50 percent of respondents to the IoD survey noted that they expect to see “higher or much higher” revenues in 2012 than they did in 2011. Only 27 percent said that they thought revenues would be lower.
No matter how you boil this down, it all comes back to one thing. 2012 will be a critical year for the UK.
And vitally, attitude is just as important as action.