Can we mitigate the geopolitical instability to support the European economy?
I went out running today in the wet, misty October afternoon. Can’t believe we are here again so soon – autumn. I have run today’s trail so many times and have it all memorised by heart – hills, slopes and curves. But today it was different. The trail was re-routed because of streetlight maintenance. I found myself at a cross-road. Should I go back or try the slightly longer road?
According to a recent study published by McKinsey, business leaders in Europe and North America to a greater extent now fear that geopolitical instability poses a threat to the economic growth both domestically as well as internationally. We seem to be at somewhat of a cross-road.
Having that said I can’t help thinking about last autumn and the autumn before that. Sweden has had a couple of strong years but Europe in general has for sure not. Europe is now looking in a slightly better shape. UK is looking really good 2014 with the strongest GDP growth in many years. Will this last? Business needs a level of certainty to prosper.
At UK Trade & Investment we have identified a multitude of bilateral business opportunities between Sweden and the UK. We believe that British companies can, for example, contribute significantly in sectors like construction, life science, cyber security, defence as well as retail and consumer goods. But trade comes with a certain amount of risk that is added to the normal business risk. We cannot afford too many other uncertainties as business risk appetite is closely correlated to the gains. Geopolitical instability will therefore affect trade.
Last week we had Katharine Braddick, Director Financial Services HM Treasury in Stockholm visiting and speaking at a British Swedish Chamber event. The audience was packed with Swedish investors and potential investors from the financial services industry. She spoke on “The Future of the Financial Services in the EU”. I couldn’t help thinking that never has the dialogue between the UK and Sweden been so important – along with keeping the public sector and business in dialogue. Together, we need to cross the roads that come – geo-political as well as regulatory – to limit perceived risk and to promote economic growth. To keep the dialogue open and communication flowing is an important way to mitigate uncertainty. And I hope we will not have to take the slightly longer road.