Richard Nelson, Founder and Managing Director of Abyss and Chair of the Institute of Directors Property and Built Environment Group, had the pleasure of being interviewed for this article, which originally appeared in the January 2022 issue of ‘All Things Business London’, pages 20-21.
As we enter 2022 possibly a little more cautiously than we had hoped to, Richard Nelson, Chair of the Property Special Interest Group for the Institute of Directors in London, and Founder and Managing Director of Abyss Global, looks back on 2021, and ahead to the coming year with an air of measured optimism.
If there is one thing that the last couple of years have shown us is that human spirit will prevail and that there’s a lot of intelligent and courageous people out there who are willing to just get on with it, adapt to challenges and get themselves back to a position of growth.
The Institute of Directors aims to be a point of information, a platform for networking and to provide the services of our policy team, which offers a voice directly into government. During the pandemic, the role of the Institute of Directors was more about making sure that people knew what was available and what we had set up to help, such as our coronavirus helpline. We were able to provide a range of resources that people could take advantage of, and we lobbied government on their behalf.
As we moved into 2021, things continued to return to normal, although, by the end of the year, we were still facing challenges, and our most recent Directors’ Economic Confidence Index remained unchanged at -6. This means that slightly more business leaders were negative than positive about the future prospects for the UK economy, although that figure does suggest the situation has stabilised since sharp falls in autumn 2021.
If we look at the reasons for that, it is probably down to a number of issues on the horizon for business in 2022:
New border controls on imports from the EU. From January 1, companies will no longer be able to delay making import customs declarations for EU goods and will instead have to make declarations and pay relevant tariffs at the point of import. Notice of imports of food, drink and products of animal origin will also be needed to be given in advance. There is a reported lack of awareness and readiness amongst businesses.
Business rates relief – the discount for retail, leisure and hospitality sectors (currently 66%) will be reduced to 50%
VAT rate for hospitality will return to pre-pandemic level of 20%
National Living Wage will increase by 6.6% to £9.50
National Insurance contributions (and dividend tax) will rise by 1.25%
Having said that, I genuinely think we are going to see businesses posting some pretty impressive figures for 2021, based on what I’m hearing from clients. It’s clear that people’s lives are going to continue to change and there will be unexpected bumps in the road, as we’ve seen with Omicron, but there is much we can to do help people prepare and rebuild and grow. It goes back to human spirit and innovation and finding ways to adapt. Areas like climate change and supply chain restraints will create new business opportunities. People will find a way to do new and different things.
I am optimistic about my own specialism, the property and built environment (PBE) sector, based on several things:
More mixed-use developments i.e. residential in the City of London, which will make the area more vibrant beyond traditional business hours by becoming an active neighbourhood 18/7, if not 24/7.
Changes to property & built environment assets post-pandemic – many buildings and places are going to go through a cycle of physically changing in response to the pandemic, such as providing more space for social distancing, using materials that resist contagion (door handles, etc.), improving air handling systems, improved/changing space utilisation efficiencies, retooling of some types of spaces (ex: retail), etc., and this will be a boost for the sector. Look for capital projects to happen in offices, retail and leisure venues, transportation, educational facilities, healthcare facilities, to name a few.
And, of course, the massive increase in online shopping and home/remote working is driving growth in sectors such as logistics/distribution centres and data centres.
Ongoing demand in the residential sector, particularly private rented accommodation and residential demands changing as people look for more work-from-home and outdoor space.
The impact of technology on the PBE sector, which is creating new employment opportunities across the property cycle, from planning and design, through on-site construction and to post-occupancy.
Carbon reduction/zero carbon challenges
The IoD Property & Built Environment Group’s role is to provide a centre of excellence for members to connect with each other and share best practice, lessons learned and opportunities for innovation – building better directors in the property and built environment sector.
On a more general level, as an organisation, the Institute is looking at various initiatives that will help businesses grow and develop. That might be reaching out to universities to identify what skills are needed and how we can prepare young people; schemes that encourage young executives; director training for disadvantaged young people; as well as the possibility of developing a bursary scheme.
We’re seeing a lot of new faces getting involved from a wider range of sectors and there’s much more crossover in terms of collaboration and networking now. Whereas at one time, construction was hammers and nails, and technology was product development, today there is far more interaction. The tech people need to understand what the construction sector wants and the construction sector needs to let tech know what it needs.
Looking forward, I think the space industry is going to be very exciting. Space innovation is big news again and it can’t rely on government money anymore, so private companies are going to be the ones to move into that market and the opportunities will be immense.
The Institute of Directors is there to support at director level and the one thing we don’t want to see is a business fail because a director didn’t have the right skills or knowledge.
Find out more about the Institute of Directors at www.iod.com.
View the original article via YUDU online viewer, or the All Things Business London website.