A complex relationship

The interplay between politics and business has far-reaching, and sometimes unintended, consequences.

The extent to which governments should get involved in the world of business is a long-running political debate in countries around the world. Yet there is no doubt that many aspects of policy can, directly or indirectly, have a significant impact on both a country’s overall economic performance and the strategies adopted by businesses, whether positive or negative.

Infrastructure is a case in point, and not just when it comes to the financing of major schemes. Managed effectively, projects backed or supported by government can encourage firms to develop new teams and skills, which should stand both business and country in good stead for the future.

Yet all too often, these projects are conducted in isolation, so those who have developed important skills are left to find other sources of work once they come to a close. In the UK, the Confederation of British Industry (CBI) has called for governments of all political persuasions to take more of a long-term approach to planning such projects, with a 25-30-year horizon rather than working over five-year electoral cycles or even shorter timeframes.

Short-term thinking

Projects encouraged by government can encourage firms to develop new teams and skills

Dr Mark Dittmer-Odell, Head of Infrastructure at the CBI, cites the ‘stop-start’ approach to road funding and the furore over whether – and where – to build additional airport capacity as examples of political wrangling. He sees the model put forward by Sir John Armitt in 2013 as a potential solution; the creation of a National Infrastructure Commission tasked with taking a long-term view. “We felt it offered a clearly established mechanism through which you would agree what needed building over the next 20 to 30 years and then focus on how you build it,” he says.

The short-term nature of decision-making is also a frustration for Tony Moloney, Head of Education and Skills at the UK’s National Grid, who cites the example of the smart metering roll-out. “It’s only this year that we’re seeing the campaign come together, but we’ve a target to get this done by 2020 and that doesn’t leave a lot of time,” he says.

Government policy in other areas can also have an impact on businesses. Tightening up immigration is becoming an increasingly important and sensitive political issue in many major countries, and can prove problematic for some industries and sectors where skilled labour is in short supply.

Long-term strategy

The focus needs to be on developing talent within

In the longer term, however, the focus needs to be on developing talent from within, argues Professor Nikos Bozionelos, Head of the Organisation and Value Chain Management research group at Audencia Nantes School of Management. “Importing skills may bring quick results, but in the long term the benefits will be rather limited, given that most of the knowledge will not remain in the country or the region,” he says.

Turkey and Germany are among the countries that have handled this well, he adds. “Germany has repeatedly resisted importing IT skills from abroad, despite the fact that there has been a shortage of software engineers,” he says.

Yet businesses, too, can help shape their own future, through working with government and other stakeholders such as schools and colleges to develop talent. “There’s a growing recognition that cross-sector engagement across businesses, education and government is needed to deliver what both government and industry want,” points out Dittmer-Odell. “There’s a need to develop better signposting to help people find the appropriate avenue for their professional interests, so if businesses and academia can work together in partnership, these problems can start to be overcome.”

Working to develop skills

The National Grid is the lead employer in the energy and industrial partnership of the government’s Employer Ownership of Skills project. Through this it is looking to develop voluntary arrangements with suppliers to ensure that young people are given opportunities in smaller organisations, drawing on practices that have already been adopted by the government and Crossrail. It is through initiatives such as these that organisations will be able to influence their own destiny.

“One of the biggest failings of business is that it doesn’t always explain well enough what its needs are, and where it’s going,” adds Moloney. “You need to take a look in the mirror sometimes and ask if you’re really being honest about what you need and what the future would look like. You can’t always put things at the foot of governments.”

If you enjoyed the above blog then you might also appreciate these other articles, which also originally appeared in the Hays Journal:

• The fruits of knowledge
• Training at the top
• Why talented Chinese graduates are aiming high in Dubai
• Establishing an effective middle management tier
• Managing external resources
• Four pillars of people
• Family values