Businesses ‘will need financial support to build back better’

CASH-STRAPPED small businesses will need money to ‘build back better’ post-Covid-19 and the government needs to work with industry to provide this support later this year, according to the head of Jersey Business.

Graeme Smith, chief executive of Jersey Business                                                             Picture: ROB CURRIE. (29985689)
Graeme Smith, chief executive of Jersey Business Picture: ROB CURRIE. (29985689)

Graeme Smith, the organisation’s chief executive, said that he believed the business community would go through three main phases this year (see full interview on pages 22-23), the last of which would be rebuilding.

He said that there were opportunities for innovation and productivity improvements but that small firms, which had been financially drained by the crisis, would need investment support.

‘A lot of businesses now have limited reserves and limited borrowing capacity because of Covid,’ he said.

‘Therefore, one of the things I’m quite keen that Jersey Business starts to look to develop, with government support, is a grant and soft-loan scheme to allow investment and reinvestment to allow us to build back better.

‘That’s one of the areas where I think a lot of good ideas will come out but some of these businesses will need help on that journey and how that is financed.

‘That doesn’t mean the grant would cover everything necessarily – it might be a partial grant contribution and a business investment – but the reality is businesses are less able to invest now than they were pre-Covid.’

Mr Smith expects this stage of the recovery will emerge in the third quarter of the year, by which stage the vaccination programme should be substantially advanced.

He said that he expected firms would have learnt business lessons from the crisis, such as better use of technology, and that this would act as a ‘catalyst’ for innovation.

‘I think the ideas will come forward. A crisis always creates innovation and I know that we will get an uptick in new start-up businesses as well,’ he said.

‘But this will require investment. And I think governments and Jersey Business have a role to play there to help businesses on that journey.’

He added: ‘We shouldn’t be afraid of partnership between government and industry on innovation and investments and using the crisis as a catalyst for a lot more innovation in business.

‘There’s an opportunity here and we do need to try to improve productivity across the various sectors of the economy. This creates a great challenge because every business has to look at every aspect of how it delivers its service to do that.

‘They are going to be far more likely to embrace technology and they are going to be far more likely to consider new ideas and new ways of working.

‘But that often comes with a need for investment at the outset to deliver the long-term results.’

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