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Recession triggers upheaval in British business

Update: 23-11-2009 | 00:00:00

LONDON: British business will reshape the way it works as a consequence of the recession, with innovative lending practices and commercial models emerging, the nation's top employers' body said on Monday.

The Confederation of British Industry (CBI) hosts its annual conference in London on Monday to discuss how business needs to adapt following Britain's longest recession on record.

The CBI said in a key report, published to coincide with the meeting, that the recession and credit crunch had "become the catalysts for a new era".

"The recession has raised concerns about commercial models, supply chains and finance that will reshape business behaviour well into the next decade," the CBI said.

It added: "Businesses do not see credit terms falling back to pre-crunch levels and, having become wary of higher debt levels, firms will look to alternatives to debt-driven growth to protect investment and innovation.

"More financing options will be created and deployed," the organisation noted in a report entitled 'The Shape of Business - The Next 10 Years.'

The CBI also claimed that British companies will also reorganise their approach to working with partners, such as suppliers, and competitors.

It added that "sustainability and ethics will become more integrated into the business model," while a more flexible workforce will evolve.

"We may be at the start of a new era for businesses, in which attitudes to finance and to corporate leadership are changed for a generation by the shock of the past two years," said CBI Director-General Richard Lambert.

"What we need now is a more balanced, less risky pathway to growth - one in which the short-term returns may be lower, but the long-term rewards for management success will be a lot more sustainable and secure."

The CBI said the findings of its report were supported by a poll that showed two-thirds of business leaders expect no improvement in credit availability in 2010 and are consequently reshaping their business financing.

The CBI-sponsored Ipsos MORI survey, carried out between October and November, polled 500 people that were mostly chief executives and chairmen, who represented a British workforce of nearly one million people.

- AFP/sc

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