Threat of recession means half of firms say they have stopped innovating

Half of UK C-suites (50 percent) say that the threat of recession has meant innovation has ceased in their business, according to brand new research from consultancy Magnetic. Just 22 percent disagree, with 28 percent undecided. This corroborates the 56 percent who say they’re prioritising the survival of their business above all else; an especially concerning figure when two-thirds of the sample are large businesses with more than 250 employees.

However, despite a gruelling economic environment, growth and innovation is the top priority for C-suites in 2024. 37 percent of the senior leaders in UK businesses said that growth and innovation was a top priority over the next six months, especially for firms with fewer than 100 employees (45 percent, versus 34 percent with 100+) and publicly listed businesses (42 percent).

The next highest-ranking priorities include upskilling staff (32 percent), managing rising overheads (32 percent) and staff retention (30 percent), which outranked staff recruitment by 3 percentage points.

Biggest priorities for c-suite executives in the UK over the next six months

• Growth and innovation 37 percent
• Upskilling staff 32 percent
• Managing rising overheads 32 percent
• Staff retention 30 percent
• Staff recruitment 27 percent
• Upgrading cyber-security 27 percent
• Developing sustainability strategies 27 percent
• Investing in IT infrastructure 26 percent
• Adapting to evolving customer needs 25 percent
• Shifting towards long-term thinking 24 percent
• Securing our supply chain 22 percent
• Staying solvent 22 percent
• Streamlining our change process 17 percent
• N/A – I don’t have any priorities for my business over the next 6 months  2 percent

This focus on growth and innovation brings with it an appetite for spending in UK firms. C-suites are prepared to put their money where their mouth is, with 84 percent set to train their teams in innovation skills over the next year, 81 percent pledging to invest in upskilling their employees in technical skills, and 89 percent planning to update their technology. In terms of set projects, 78 percent plan to invest in developing a new product, with 34 percent committing ‘significant investment’; this plan is more likely in publicly listed firms (85 percent) than in their privately owned counterparts (74 percent).

The economy tops the list of concerns about the future, with 38 percent identifying rising interest rates as a big challenge, 36 percent saying inflation, and 33 percent saying economic uncertainty in general. Beyond the economy, 26 percent are concerned about access to talent, and many are worried by the pace of change; 19 percent name the pace of technological development as a key challenge, and the same number (19 percent) highlight both changing consumer needs and shifting employee expectations