UK Business Barometer

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The June survey looks further at a theme aired in the April survey, that of New Product Development; touching upon aspects such as available advice, product/service design, limiting factors and intellectual property. This month also sees the return of the quarterly trends questions. The trends charts from the responses to the regular quarterly questions can be found via the Trends link on the Home page of the site.

162 Business Advisers responded to this Survey.

Survey Findings

In April the Business Barometer Survey included two questions related to the development of new products and services. They focused on whether advisers observe that their clients actively seek opportunities to develop new products and services, and what the main motive is for developing new products and services. This month's questions address factors surrounding new or improved products and services introduced over the past two years.

Over 90% of respondent advisers or their colleagues are asked about advice on product, process or service development and over the last year 26% of respondents have been asked for this type of advice by more than 25% of their clients.

During the course of development of changes to existing, or the introduction of completely new products, services or processes, there are numerous factors to be taken into account and a large range of external potential sources of advice. Respondents were asked what kind of advice their clients most commonly asked for in connection with the introduction of new products, services or processes and the results are included in the chart below. On average, advisers selected 4.0 topics and the most frequent response was Marketing, with 18%, followed by Protecting patents, copyrights and trademarks, and Business plans, both with 16%.

The parallel UK Business Barometer Survey (UKBB) indicated that many of the respondents sought external advice, on average on 2.0 issues. The most frequent consultations were about Software, Marketing and Technical, all with over 9% of responses although Protecting patents, copyrights and trademarks, Design, and Networking groups all received between 8% and 9% of responses.

64% of respondents or their colleagues act as brokers or intermediaries for businesses seeking external design input or advice, although 29% do not.

The June Survey asked advisers which types of expert they have recommended to businesses seeking external design input in developing new products. Graphic designers (15%) and Marketing experts (16%) received most responses, with Branding and University expert consultants receiving 9% and 10% respectively.

Consultation of external experts is not prevalent among the respondents to the UKBB. 39% either found this question not applicable or responded with none. The remainder, those who have used experts, have consulted between one and two types of expert on average. The most frequent types of expert consulted were Marketing experts and Graphic designers, with 11% of responses.

There are many potentially inhibiting factors preventing the introduction of new products, services and processes. The Survey asked advisers to draw on their knowledge of working with businesses to say which of the listed factors limits businesses' ability to introduce new products services or processes. Respondents were invited to select all the factors that apply. Lack of time and Risks involved both had 12% of the responses, Too high development costs 13% while Access to external finance (loans or equity) and Lack of new creative ideas received 10%. The average number of responses made per respondent was 4.7.

Respondents to the UKBB were also invited to select all the factors that apply to them in the course of deciding whether to introduce a new product, process or service. Excluding those who responded with 'not applicable', don't know' and 'none', respondents selected an average of 2.1 responses. Lack of time accounted for 21% of the responses, while 11% of responses showed that high development costs are also important. Further factors with relatively high responses rates were Access to external finance (loans or equity), the Risks involved and access to in-house skills, all with 8% of responses.

Advisers were asked which type of intellectual property rights their clients have sought advice on. On average, advisers have been asked for advice on between 2 and 3 out of the four categories. Registered designs were the least frequent response at 19%.

Amongst the 24% of respondents who have sought advice on any of the four aspects of intellectual property many have asked for more than one type of advice so there is strong overlap with Patents and Copyrights receiving 13% of total responses and Trademarks receiving close to 12%. Registered designs received the smallest response with only 6%.

Trends Questions

The average number of clients seeking business advice from our respondents has decreased over the past three months.

There was also a decrease in the number wanting to start a business in the June quarter of 2005.

The ability to gain access to finance was rated on average as having dropped back slightly over the last quarter.

The average percentage of Advisers' clients finding that there is a shortage of skilled labour decreased during the June quarter.

In the June 2005 quarter, Advisers were on average slightly less optimistic about the continuance of their clients trading over the next year. 13% of Advisers consider that none of their clients will close over the next year, compared with 12% in March, while 75% thought that up to 10% of their clients might cease trading compared with 69% in the March quarter. Expectations of higher numbers of business cessations fell over the quarter to 16% from 19% in March who thought that over 10% of their clients might cease trading over the next 12 months.