Bdo Transitions Full Launch Report

TRANSITIONS

INSIGHTS INTO THE POST RECESSIONBUSINESS ENVIRONMENT

February 2010

In collaboration withcentreforfuturestudies

CONTENTS

FOREWORD 1

1. SYNOPSIS 2

2. INSIGHTS FROM THE EXPERT PANEL 4

3. ECONOMIC PERSPECTIVES 6

4. THE BUSINESS ENVIRONMENT 9OF THE ‘TEENIES’

5. THE TRANSITIONS 12

APPENDIX 14A. Key sources 14B. Links to key data sources 15C. About the Centre for Future Studies 15

TRANSITIONS: Insights into the post recession business environment

It is our view that the UK’s business landscape will change significantly.There will not be a return to business as usual. The forces driving changewill continue well beyond the technical end of the recession and theconsequences will be permanent and far reaching.

The recession will mark a series of transitions from the industrialstructures and models of the past to the digital, networked age of thefuture. We are living through a dramatic period of creative destruction asa result of which many organisations will either transform or disappear.

The processes of change will be demanding and painful but the recession,seen through the rear view mirror, will be viewed as the catalyst tosustainable progress in the future.

Our purpose in preparing this study is to provide a body of knowledgeand insight that can inform strategic thinking and inspire the creativityand innovation that will be required to make the transitions successfully.

Peter HemingtonPartnerBDO

TRANSITIONS: Insights into the post recession business environment 1

FOREWORD

MANY BUSINESS LEADERS ARE ASKING WHEN THE ECONOMY WILL RETURN TO SUSTAINABLEGROWTH; BUT PERHAPS THE MOST CRITICAL QUESTION TO ASK IS: HOW WILL THE BUSINESSLANDSCAPE CHANGE AS A RESULT OF THE RECESSION?

SYNOPSIS

1

After a decade of high economic growth as China and Indiabegan to integrate themselves into the world economy, thefundmental imbalances that this trend has created have derailedwestern economies. At the same time, technological changeboth threatens existing business models and offers opportunitiesto develop new routes to profitable growth for those thatembrace it.

As a result, UK business will have to undergo painful changein order to adapt to the new world order that will result fromthese trends.

Today’s businesses are built for a world where cheap goods areimported from low cost economies and where consumer,business and government spending have been financed by debt.And while digital technologies are now widespread, in realitytheir uptake has a very long way to go – this will continue tochange the world massively.

The next five years are likely to be tough – with weak economicgrowth, there will be no return to ‘business as usual’ for sometime to come. Therefore, UK businesses need to use the periodto transform themselves to adapt to the new environment andthe undoubted opportunities that it will bring.

We visualise the process as a series of transitions from theindustrial structures, models and values of the past to the digital,global, networked age of the future.

We believe the next five years to 2015 will be precarious formany companies with high levels of uncertainty, risk andcomplexity. In this context, although we will see ‘recovery’, theword will have a new meaning and we will not see a return to theway things were.

2 TRANSITIONS: Insights into the post recession business environment

THE WORLD HAS CHANGED. A SYMPTOM OF THIS IS THE CURRENT RECESSION –THE DEEPEST AND LONGEST SINCE THE GREAT DEPRESSION OF THE 1930s – BUT FAR MOREFUNDAMENTAL CHANGES ARE AFOOT.

In fact, by the middle of the decade, we believe we will see a “new worldorder” emerge. In order to define what this might look like, we havepulled together a body of experts and research sources. Over the comingmonths we will be launching a series of reports dealing with thefollowing key trends:

n A realigned economic world order

n New forms of capitalism

n Effective regulation and governance

n Corporate cultures of creativity, innovation and challenge

n A permanent cultural shift in consumer attitudes and behaviours

n Reappraised and redefined sustainable development.

Each transition will be narrated in depth in separate ‘transitions briefings’.These will seek to answer the question as to how boardrooms shouldrespond to this crisis, as the tactics of ‘recession-as-usual’ are notsufficient for firms to weather the economic upheaval because it is noordinary recession. Is it just a case of recession-as-usual: budget-paring,personnel-slashing, and portfolio-trimming?

What is required is an inventiveness that leads to innovation throughoutthe organisation; from new business models and propositions to newmanagement structures.

Each transition report will provide further insights and also guidelineson how to translate the concepts presented into a specific actionableagenda.


We believe the next five years to2015 will be precarious for manycompanies with high levels ofuncertainty, risk and complexity.In this context, although we will see‘recovery’, the word will have a newmeaning and we will not see areturn to the way things were.

INSIGHTS FROM THEEXPERT PANEL

2

“The companies which are faster tomodify themselves and more willingto grasp new techniques and newbusiness models will thrive and willcome out of the recession muchricher than they went in.”IAN PEARSON, FUTURIST, FUTORIZON

“Recessions are good in thatbusinesses and all of us as individualscan re learn the basics again.”DR. ROBERT DAVIES, STRATEGY CONSULTING,IMHOTEP CONSULTANCY

“There is going to be a weakand protracted recovery in theUK economy.”RICHARD SNOOK, FORMERLY SENIOR ECONOMIST, CEBR

“The landscape is going to bedifferent.”LAI WAH CO, HEAD OF ECONOMIC ANALYSIS, CBI


BDO AND CENTRE FOR FUTURE STUDIES BROUGHT SOME OF THE MOST INSPIRATIONALAND INFLUENTIAL MEMBERS OF THE BUSINESS AND ACADEMIC COMMUNITY TOGETHERFOR THE FIRST TIME. THE EXPERT PANEL INCLUDED:

“We need to think about what issustainable in terms of growthmomentum and which areas of businessand what kind of business models weshould be working towards.”LAI WAH CO, HEAD OF ECONOMIC ANALYSIS, CBI

“I think capitalism will change but Ithink it will possibly go throughsome waves of change not just onepattern.”TONY DOLPHIN, HEAD OF ECONOMIC ANALYSIS, CBI

“I believe it’s less the sector, it’s moreyour business model which enablesyou to succeed whatever part of theeconomic cycle in fact.”NICHOLAS BATE, AUTHOR & CONSULTANT, STRATEGIC EDGE


“Manufacturing companies will be looking much more like servicecompanies with some manufacturing attached to them.” TONY DOLPHIN, HEAD OF ECONOMIC ANALYSIS, CBI

“It seems to me that from atechnological point of view, an awfullot of changes were going to happenin the next 10, 20 years, even beforethe recession. I think that therecession has accelerated an awfullot of that change.” IAN PEARSON, FUTURIST, FUTORIZON

“Maturity can be a mental illness foran organisation. It doesn’t know it’s introuble because it loses contact with afast moving environment. It has to goout and track in which direction theexternal environment is changing.”DR. ROBERT DAVIES, STRATEGY CONSULTING,IMHOTEP CONSULTANCY

“I think it [the recession] has been quite ahealthy thing to happen. It has enforcedthe necessity to trim an awful lot of deadwood from the economy.”IAN PEARSON, FUTURIST, FUTORIZON

ECONOMICPERSPECTIVES

3

The explosion of liquidity and debt in western economiesassociated with this process led to the crisis in the financialsystem by the end of the 2000s. Banks, corporates andhouseholds in the west have begun to pay back their debts in aprocess known as deleveraging. However, the massive declines inconsumption and investment associated with this – the GreatRecession of 2008/2009 – have forced governments to step in asborrowers of last resort in order to keep western economiesafloat. So as private debt has reduced, public borrowing hasmushroomed, without yet setting developed economies ontoa sustained growth track.

In 2009, the UK economy shrank by 4.8 per cent, the fastest paceof decline in a single year for 88 years. Recent data from theInternational Monetary Fund reveals the UK’s recession to be sixtimes more severe than the global average. Taking the 2008/9recession into account, the UK economy has grown by an averageof only 1.7 per cent during the noughties decade.


AFTER A DECADE OR MORE OF HIGH GROWTH AND LOW INFLATION, THE WORLD ECONOMYHIT THE ROCKS AT THE END OF 2008. THE DANGER SIGNS HAD BEEN LOOMING FOR SOMETIME. IN PARTICULAR, THE GLOBAL IMBALANCES CAUSED BY THE MERCANTILIST GROWTHSTRATEGIES OF CHINA, GERMANY AND JAPAN REACHED AN UNSUSTAINABLE POINT.ALTHOUGH THE CAROUSEL FERRYING CHEAP GOODS FROM CHINA TO THE WESTERNWORLD CONTINUES TO OPERATE, THESE GOODS HAVE BEEN PAID FOR WITH IOUs.

n The employment rate for September to November 2009 was 72.4 percent, the lowest since the winter of 1996/7.

n There were 1.03 million employees and self employed workingpart time. This is the highest figure since records of this series beganin 1992.

n In the three months to November 2009, regular pay rose by 1.1 percent on a year earlier, the lowest annual growth rate since recordsbegan in 2001.

n The number of inactive people of working age increased to8.05 million.

n The consensus among forecasters is that unemployment couldapproach 2.9 million in 2011, equivalent to 9 per cent of thelabour force.

Government borrowing is likely to total £173bn in this financial year and£180bn in 2010/11. The International Monetary Fund forecasts that theratio of debt to GDP will reach 82 per cent in 2010. This could result inspending cuts and/or increased taxes totaling 13 billion by 2016. Thiswould mean a fiscal squeeze equal to 5 per cent of GDP over the nextfive years. The process of restrained borrowing and spending could takemost of the decade to have the desired result.

The levels of debt will be a drag on the economy and underline the needfor a general rebalancing away from an excessive dependence ondomestic demand fuelled by debt. The domestic market will remaindepressed for some years so the principal source of growth for Britishbusinesses will be in export markets.

The notional return to growth has been attributed by some economiststo the exceptional stimulus measures taken by Government in 2009rather than a real growth in the economy. When the impacts of thestimuli are over, it may be difficult to identify where growth can beachieved in the short term.

The data published by the Office for National Statistics (ONS) are firstestimates based on approximately 40 per cent of the available data.The ONS says the average revision tends to be around 0.2 per cent ofGDP either up or down. This could mean the economy was still inrecession at the end of 2009 or that growth was closer to the expected0.3 per cent. What matters about error is not what it is on average, butthe range of errors that might occur; for it is the range, not the average ofthe range, that shapes our uncertainty. Even in conceding uncertainty, anaverage error understates it. There's often more uncertainty around thenumbers than appears.


“We have been through an extraordinary financial crisis. One doesn’tneed to ask questions about ‘the worst since when’ since it may be hardto find any period in which it was actually worse. The economy faces a longperiod of healing. The extraordinary degree of monetary and fiscal stimulusadministered by governments represents little more than a massivesticking plaster on the wounds.”MERVYN KING, GOVERNOR OF THE BANK OF ENGLAND

The average flattens out large errors. But the possibility of largeerrors is important; particularly if it turns out that the data ismore unreliable in times of uncertainty or economic volatility. Anexamination of the latest revisions for GDP from the ONS showsrevisions to quarterly GDP from the first estimate to the latest of0.3 or 0.4 have been common recently.

In other words, the situation could be far worse or marginallybetter than currently thought.

That said, in its recent monthly survey of the economiclandscape, the ONS said that despite signs the UK was on a pathto returned growth, the prospects were muted as consumers,business and government are all struggling to pay down debts,unemployment is increasing and credit will remain tight.

“Even if the UK economy escapes from recession in a technicalsense, the recovery may be fragile and is in danger of a doubledip recession should it be hit by a further shock or loss ofconfidence.” (ONS Nov 09)

The consensus view among economists is that the risk of adouble dip recession is uncomfortably high. This could betriggered by a number of factors including a prematuretightening of fiscal and monetary policy, a major retrenchment ofconsumer spending as a result of rising unemployment, a sharpand sustained rise in oil prices and the failure of a few largefinancial institutions.

A combination of these factors could take global growth backinto negative territory. The United Nations ‘World EconomicSituation and Prospects 2010’ cautions that a premature removalof state support could trigger the second part of a double diprecession. Yet, there is now increasing concern with the increasingsovereign country debt and this could become a serious barrier tofurther state support.

The medium term headwinds facing the UK economy areformidable – rising unemployment, steep tax increases andhigher interest rates – a decade of fiscal consolidation, little

growth in post tax incomes and a worsening delivery of publicservices.

The three most potent macro economic risks in the short tomedium term are:

n an asset price collapse funded by cheap money andquantitative easing programmes world-wide

n the western world closes its doors to international trade

n fiscal and sovereign debt crises.

The major risks to the UK economy are seen to be:

n a spike in oil and other commodity prices that causes asqueeze on real incomes, so preventing a rebound in consumerspending

n a further large increase in the household saving ratio, alsostopping consumer spending rebounding

n an aggressive tightening of fiscal policy at a time when theprivate sector is still adjusting its saving/borrowing and whichcannot be offset by monetary policy because QE proveslargely ineffective.

“The UK faces a fiscal deficit on a scalewhich has never been experienced before inpeacetime. The bulk of this deficit isstructural in nature, which means that itwon't simply disappear when the recoveryoccurs. The recession may be over, but it willnot feel like it for a long time.”

RICHARD LAMBERT, DIRECTOR GENERAL OF THE CBI


“Economists seem to believe there is only a remote possibility that the UK could follow theJapanese 1990s route into stagnation. But with no scope for further fiscal easing, interestrates at 0.5 per cent and £200bn of QE already in place, there is little more that theauthorities can do to prevent such an outcome. So if banks remain reluctant to lend andhouseholds and businesses remain reluctant to borrow, it seems to me the risk of a Japanese-style outcome should not be easily dismissed.”

TONY DOLPHIN, INSTITUTE FOR PUBLIC POLICY RESEARCH.

THE BUSINESSENVIRONMENT OFTHE TEENIES

4


Through our research and analysis, we have identified the keydrivers of change:

THE FINANCIAL DRIVERS

The financial crisis and the recession have altered operatingconditions by imposing new challenges and exacerbatingexisting ones.

Finance will be more expensive and its availability will beconstrained by regulation and changes to the banking market.This change will be a significant driver of adjustments tocorporate finance models and investment behaviour.

From an era in which finance was cheap and readily available,these changes will alter how companies fund themselves and therate of growth they expect to achieve. Businesses will need toadjust to a far less benign economic environment.

The disruption in financial markets means that businesses willreduce their reliance on debt, the attractiveness of which hasdeclined. And there is likely to be a more creative search for othersources of capital, with supply chain finance becoming moreprevalent as companies provide working capital to their suppliers.

The next decade will almost certainly be characterised by ahigher level of economic volatility and increased risk – cloudingthe certainty required for long-term planning.

THE BUSINESS ENVIRONMENT OF THE NEXT DECADE WILL BE SIGNIFICANTLY DIFFERENTTO WHAT MIGHT HAVE BEEN EXPECTED JUST TWO YEARS AGO. THE RECESSION HASALTERED OPERATING CONDITIONS BY IMPOSING NEW CHALLENGES AND EXACERBATINGEXISTING ONES.

TRUST

Public trust in business and in markets, which was alreadysuffering, is at a low ebb. The profit motive is distrusted and theonus is on companies to demonstrate their ethical credentials.

SOCIAL AND DEMOGRAPHIC CHANGE

The manner of social and demographic change will also alter.Retirement will still accentuate existing shortages of critical skills,but plugging these gaps will be the responsibility of businessesrather than government, whose spending will be constrained.Pension problems will force some to work longer, requiringemployers to manage staff with wider age ranges, expectationsand motivations than before.

THE LOW CARBON ECONOMY

The recession has altered the economic climate in which businessneeds to move to a low carbon economy and improve resourceuse. The ability and preferences of government and someconsumers to pay for this movement have been compromised.

GOVERNANCE AND SUSTAINABILITY

There will be a greater focus on governance and sustainability.The tendency within some companies to bolt on corporate socialresponsibility practices is likely to change with greatertransparency, governance and accountability built into the coreoperating model.

FLEXIBILITY AND COLLABORATIVE WORKING

The flexibility that businesses and their workforces have shown inthe recession is likely to become a permanent feature. There willbe a changing mix of core and permanent staff with a greaterproportion of the workforce being used on a flexible basis.

Collaboration will be the watchword for organisational structuresin the future. These collaborative relationships are likely to bedeveloped with suppliers, and even competitors, when the costsand risks of new developments are deemed to be too great forany single business to take on.

The move to more collaborative, flexible business models will bereflected in four key operational areas – capital and investment,the workforce, governance and sustainability, and organisationand location.

New organisational structures will be created in many businessesas they continue to rationalise. Businesses will shift fromtransactional to collaborative relationships with a wide range ofpartners. Supply chain dynamics will be much more complicatedas risk becomes a more significant factor in decision-making.

TECHNOLOGY

Trends in technology change are set to continue, and as over thelast decade, will have a significant impact on business modelsand ways of working.

CONSEQUENCES AND IMPLICATIONS

Together, these changes are leading many businesses to reassesstheir purpose, structure and organisation, and what they need todo to ensure sustainable business success. For most, there will bea movement away from ‘business as usual’.

The recession has accelerated the need to address inefficienciesand non-core activities. It has also provided the stimulus forcompanies to re-think themselves and re-evaluate their future –allowing them to make organisational changes that will positionthem for the upturn and beyond, while building-in resilience andflexibility. It has been a catalyst for change in business that couldnot have occurred earlier when the focus was on delivering growth.

Rationalisation will create new organisational structures inmany businesses. These will be built around a core of permanentemployees and unique business propositions, with a much largergroup of activities and people located around the periphery ofthe organisation.

Businesses already invest significantly in governance. Over thecoming decade this will become more central to business withactions taken across all parts of the organisation and beyond.Businesses recognise that demonstrating accountability will becrucial to success.

The impact on the economy in the short term will be to createslower but more sustainable growth. In the longer term,investment in building flexibility, collaboration and new workstructures could make UK businesses stronger.


ACCELERATING TRENDS

Redefinition of shareholder value: a single minded focus on generatinghigh returns for shareholders has given way to the realisation thatshareholder value is best served by a focus on the business – itsemployees, customers and products.

IT as a utility: businesses are buying computing capabilities as servicesrather than maintaining proprietary systems in-house

Social networks: through a range of technical and social developments,consumer power is has increased significantly. Companies are having nochoice but to listen. The steps along the way have felt gradual and naturalbut collectively they change everything.

Enterprise risk management: the recession has brought riskmanagement into sharp focus and the management of risk will becomeeven more exacting amid the uncertainties of the coming decade.

Creative organisations: businesses are beginning to recognise that theirfuture source of competitive advantage lies in their creative capabilities,encouraging collaboration, drawing on diverse perspectives, and engagingtheir people in ideation.

Sustainability: more than anything, the first 10 years of the 21stcentury will be remembered as the decade that businesses went ‘green’10 years from now. So the 2010s will be seen as the decade ofsustainability.

Eastward migration of economic power and influence: China isengaging and facing the outside world for the benefits it brings its ownmarkets. India is facing the world and becoming more outward focusedgenerally. Companies from these and other countries are becoming majorplayers in many industries. The US has been leveraging itself on debt fromChina and the Middle East and this shift of influence eastward has thepower to change everything.

Business networks: Business networking sites provide a low-cost way forentrepreneurs and others to market their skills and services. This,combined with the free availability of open source, integrated ‘office’software is promoting the birth and growth of new businesses andbusiness models.

Changing corporate cultures: companies will be increasingly focused onfostering an internal culture of employee engagement and common goalsthrough flexible benefits and leadership programmes.


THE TRANSITIONS

5

TRANSITION TO A NEW ECONOMICWORLD ORDER

The world economic landscape is changing and a very differentworld is emerging. By 2020, China and India will be economicpowerhouses, vying with the United States for global supremacy.The ‘Next 11’ – including Indonesia, Iran, Nigeria, Turkey andMexico – all have the potential to become much bigger too.

How prepared is your organisation to meet the challengesand opportunities this new world order will present?

TRANSITION TO NEW FORMS OF CAPITALISM

In the aftermath of the recession there will not be a return to theAnglo Saxon market capitalism. More emphasis will be put onsocial stability, responsibility and shared capacities to take risks.That could lead to a capitalism that is more civic, collaborative,creative and sustainable.

What impacts will this transition have on your notions ofprofitability?


THIS REPORT HAS OUTLINED THE CONTEXT IN WHICH WE BELIEVE A SERIES OFTRANSITIONS WILL PLAY OUT OVER THE NEXT FIVE YEARS. INDIVIDUAL REPORTS ON THEFOLLOWING TOPICS WILL BE RELEASED OVER THE COMING MONTHS, AND BELOW IS JUSTA FLAVOUR OF WHAT TO EXPECT:

TRANSITION TO A NEW REGULATORY ENVIRONMENT

The causes and consequences of the recession will drive future regulatoryreforms. With the demise of the laissez-faire attitude toward corporateactivity, scrutiny will increase, from government, shareholders and themedia. Increased accountability must be a central part of a company’sagenda.

How will your organisation respond to and benefit from thisnew environment?

TRANSITION TO SUSTAINABLE DEVELOPMENT

Organisations will seek new methods to link the twin pressures offinancial performance and commitment to sustainability in clear cutways. The winners in the economic upturn will be those corporations thatembrace sustainability as a framework to drive financial success duringthe downturn.

Does your organisation have the right strategies and structures inplace to achieve sustainability?

TRANSITION TO THE NEW CONSUMER

In the aftermath of the recession, how consumers evaluate value willlikely be qualitatively different from before. There is a shift fromconspicuous to conscious consumption. Saving money by cutting outwaste of all kinds will be the priority. This isn’t a short-term response tothe recession but a fundamental shift that will see the emergence of anew breed of customer.

Does your organisation have the capabilities of meeting thedemands of the new consumer?

TRANSITION TO A NEW CORPORATE CULTURE

The culture of the ‘industrial’ paradigm which is structured, opaque,incremental, hierarchical, monolithic, homogenous and bounded will bereplaced by the network paradigm which is: flexible, transparent, creative,cellular, distributed, diverse, authentic and inspiring.

Is your organisation ingenious and committed to innovation?


APPENDIX

A. KEY SOURCES:

Andy Bond, ASDA Chief ExecutiveAnthony Holmes International Corporate Turnaround SpecialistArena BLMAssociation of Chartered Certified AccountantsBank of EnglandBank of England Statistical Interactive DatabaseBusiness Growth PartnershipCambridge EconometricsCapital EconomicsCentre for Economics and Business Research (CEBR)Charlotte Hogg, Managing Director, Experian UK & IrelandChartered Institute of Purchasing & SupplyConfederation of British IndustryDavid Kern, Chief Economist, British Chambers of Commerce (BCC)Dennis Turner, Chief Economist at HSBCDmitry Orlov, Author of Reinventing CollapseDoug Strachan, Head of Consumer Insight, Post Office FinancialServicesDr Susan Rose, Henley Business SchoolEconomic and Social Data Service (ESDS)Economic and Social Research Council (ESRC)Economist Intelligence Unit

EEFEuropean Central BankEuropean CommissionFederation of Small Businesses (FSB)Financial Reporting CouncilFinancial Services AuthorityGill Waters, Oxford College of MarketingGlobal InsightGoldman SachsGraham Hutchings, Managing Editor, Oxford AnalyticaHM TreasuryHoward Archer, Chief UK and European Economist IHS GlobalInsightHSBC Future of Business ReportInstitute for Fiscal StudiesInstitute of DirectorsInternational Monetary Fund (IMF)Irwin Stelzer, Director of Economic Policy Studies Hudson InstituteJohn Sloman, Director, Economics NetworkJonathan Loynes, Capital EconomicsKPMGLondon School of Economics (LSE)Martin Gahbauer, Chief Economist NationwideMick Riordan, Senior Economist World Bank


National Institute of Economic and Social Research (NIESR)Neil Lightbown, UK Underwriting and Strategic Claims Director, RSANeil Woodford, Invesco PerpetualNew Economics FoundationNielsenOECD Economic OutlookOffice for National StatisticsOxford EconomicsRichard Scase, Professor of Sociology and Organisational BehaviourUniversity of KentRobert Peston BBC Business EditorRobert Shiller, Professor of Economics, Yale UniversityRoss Walker, RBS EconomicsRoy Ayliffe, Director of Professional Practice at CIPSRoyal Bank of Scotland (RBS)ShoppercentricStandard & Poor'sStephanie Flanders, BBC economics editorSteve McGill, Chairman and CEO Aon Risk ServicesTomorrow’s CompanyVince Cable, the Liberal Democrat Treasury spokesman

B. LINKS TO KEY DATA SOURCES

http://www.statistics.gov.uk/statbase/TSDIntro.asp

http://www.statistics.gov.uk/OnlineProducts/default.asp

http://www.statistics.gov.uk/instantfigures.asp

http://www.bankofengland.co.uk/mfsd/iadb/BankStats.asp?Travel=NIx

http://www.bankofengland.co.uk/mfsd/iadb/AtoZ.asp?Travel=NIx

http://www.hm-treasury.gov.uk/

http://www.hm-treasury.gov.uk/data_index.htm

http://www.ecb.int/stats/html/index.en.html

http://www.ecb.int/pub/mb/html/index.en.html

http://www.ecb.int/pub/annual/html/index.en.html

http://ec.europa.eu/economy_finance/index_en.htm

http://ec.europa.eu/economy_finance/db_indicators/db_indicators8650_en.htm

http://www.oecd.org/statsportal/0,2639,en_2825_293564_1_1_1_1_1,00.html

http://www.oecd.org/std/mei#statistics

http://www.worldbank.org/data/

http://www.imf.org/external/country/

http://www.economist.com/countries/

http://www.esds.ac.uk/aandp/access/login.asp

C. ABOUT THE CENTRE FOR FUTURE STUDIES

The Centre for Future Studies (CFS) is an independent forecasting think-tank concerned with understanding the dynamics of the present and theforces of change that will transform the present into future realities.

We have a unique combination of skills and expertise which translateraw information into insightful knowledge and concise understanding.We are proud of the international reputation we have gained over thepast thirteen years for our innovative thinking and incisive analysis.

We are affiliated with Kent University and have access to multi-disciplinary specialists throughout the UK academic community.In addition, we have formed a network of experts who work across a widerange of industry sectors who bring specific commercial knowledge toparticular projects.

It is our people, their experience, expertise and creativity, who areour distinguishing hallmark. Skilful thinking is a combination of science –quantitative data and analysis – and art – qualitative insights andperceptions. Our people have uniquely mastered this combination.We take pride in our culture of inquisitive minds and creativedetermination and are committed to helping our clients succeed.

We work with some of the world's leading businesses, governmentsand institutions.

Centre for Future StudiesStelling MinnisCanterburyKent CT4 6AQ

T: +44 (0) 1227 709575F: +44 (0) 1227 709420E: [email protected] W: www.futurestudies.co.uk


'Tax Team of the Year' 2009 and 2008'Audit Team of the Year' 2008 'Corporate Finance Deal of the Year' 2008

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specificsituations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO LLP to discuss thesematters in the context of your particular circumstances. BDO LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any actiontaken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

BDO LLP, a UK limited liability partnership registered in England and Wales under number OC305127, is a member of BDO International Limited, a UK company limited by guarantee,and forms part of the international BDO network of independent member firms. A list of members' names is open to inspection at our registered office, 55 Baker Street, London W1U 7EU.BDO LLP is authorised and regulated by the Financial Services Authority to conduct investment business.

BDO is the brand name of the BDO network and for each of the BDO Member Firms.

In Northern Ireland, BDO is represented by BDO Northern Ireland, a separate and independent member of the BDO International network.

BDO LLP is the Data Controller for any personal data that it holds about you. We may disclose your information, under a confidentiality agreement, to a Data Processor (ShamrockMarketing Ltd). To correct your personal details or if you do not wish us to provide you with information that we believe may be of interest to you, please contact Steve Nelson on0113 204 1279 or email [email protected]

Copyright © February 2010. BDO. All rights reserved.

This document is printed on 9lives 80, a paper containing 80 per cent recycled fibre and 20 per cent virgin Totally Chlorine Free (TCF) fibre sourced from sustainable forests. 9lives 80is produced by an ISO 14001 accredited supplier.

Our work has benefitted from the wisdom of the many commentators and businesses with whom we consulted. We are particularlyindebted to the members of the BDO Expert Panel. Their insights and devil’s advocacy were invaluable in shaping our thinking:

Nicholas Bate, Author & Consultant, Strategic EdgeIan Brinkley, Programme Director, The Work FoundationDr. Robert Davies, Strategy Consultant, Imhotep ConsultancyTony Dolphin, Senior Economist, IPPRRupert Merson, Former Partner, BDOPeter Hemington, Partner, BDO

It goes without saying that any errors, omissions or shortcomings are our sole responsibility.

For more information, visit www.freedomtothink.biz

[email protected] 352 6200









NORTHERN [email protected] 439 009



SOUTHERN REGION:EPSON, [email protected] 734 300

www.bdo.co.uk

CONTACT USIf you would like further information about the series of Transitions reports, or the services BDO can offer, please contact your localbusiness centre:

Graeme Leach, Chief Economist, IODIan Pearson, Futurist, Futorizon Stephen Radley, Chief Economist, EEFRichard Snook, formerly Senior Economist, cebrLai Wah Co, Head of Economic Analysis, CBI

Bdo Transitions Full Launch Report

Documents

Transcript of Bdo Transitions Full Launch Report