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North East businesses warned against underestimating industry disruption amid Brexit narrative

A new study by Newcastle accountancy firm Haines Watts has revealed that whilst 96% of North East business owners are concerned over industry disruption, only one in twenty (6%) have plans in place to cope with potential changes.

Conducted as part of the ‘For Love or Money’ study, the survey found that North East businesses which turnover between £1m and £50m worry most about changes in government policy and regulation.

According to the research, two fifths of respondents have no proactive plans in place admitting they haven’t thought about disruption or have thought about it but not done anything.

More traditional forms of disruption also place highly on the list of concerns, including competition from larger businesses entering the market (42%) and changing customer expectations (48%).

Donna Bulmer, Managing Partner at Haines Watts, said: “Brexit has distracted UK business owners from the very real threat of industry disruption.

“While fears around regulatory disruption are exceptionally high, business owners may not be concerned enough about the kind of disruption that will threaten their very business model.”

The type of disruption that makes headlines the most – that of radical new business models – featured comparatively low down in North East business owners’ fears, with just a third (31%) citing this as a concern. Fear over new technologies disrupting markets is even lower at 13%.

Bulmer continued: “It’s hard to envisage how threats like new technology could unfold when the challenges they pose are only partly visible, but that doesn’t mean that preparation can’t get under way.

“There are steps every business can and should take to prepare for the changes that will come, such as investing in innovation, providing staff with the right training and ensuring you have a robust business plan in place.

“Although the pace of disruption has picked up, the temptation to bury our heads in the sand and stick to what we’re comfortable with is not new.”

Bulmer added: “In 1996 Bill Gates wrote that ‘we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten’.

“Those timelines are even shorter now and the danger of underestimating disruption is greater than ever.”

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