Suffolk Limited: Could automation solve the biggest problems facing Suffolk’s leading companies?

Jonathan Agar of Birketts, left, and Rob Thomson of Grant Thornton at the Suffolk Limited event 2017. Picture: Carl Middleditch, Bushfire Photograph (Image: Archant)

While Brexit is the most pressing issue on many businesspeople’s minds, the impact of automation is erasing the need for employees to complete many tasks, which will affect future employment figures.

The companies in the Top 100 2018 grew their workforce by 4.5% to 33,340 this year, which is not as high an increase as in previous years, but is still an upward trend.

Transport and motor retail leads the field this year as the largest employment sector in Suffolk Limited, with 8,997 employees, taking over the top spot previously held by the service sector.

“We’re sitting here with Felixstowe on our doorstep and Harwich not too far away, so we’ve got a lot of transport businesses and hauliers,” explained Grant Thornton’s director of corporate tax, compliance and advisory, Rob Thomson.

While the average wage for Suffolk Limited increased by 4.4% to £24,989, following several years of flat growth, in the transport and motor retail sector, it’s shot up to a handsome £30,985 - the second highest across all sectors.

Jonathan Agar of Birketts, who helped to analyse the study, puts that down to difficulties in finding the next generation of truck drivers.

“I think if you speak to some of the logistics companies, they are finding it really difficult to find anyone who can drive a truck,” he said. “There is a bit of an arms race going on there in terms of wages going up for anyone who is prepared to be a truck driver.”

Mr Thomson added: “There just aren’t the youth coming in to that area of the business, and all the truck drivers these days are quite long in the tooth.

“The fact that the transport motor retail sector has grown by 11.5% turnover-wise but their operating profit has actually has decreased by 0.2%, means they’re obviously incurring greater costs to deliver their service.

“That increase in salary costs is coming through and hitting profitability.”

Mr Agar believes that the anticipated introduction of self-driving vehicles to the market in the next decade could help to solve this problem.

“The companies that tell me they can’t get drivers, when self-driving vehicles come along, you’re solving that problem.

“When you get robots laying bricks, the shortage of bricklayers in the construction industry also gets resolved.

“Automation can be a positive thing, a solution to some of the problems these companies face. Suffolk is at almost full employment. To my mind, most of the people who want to work and are able to work are working. So automation is not something to be feared, because it will not just drive productivity, but also growth and prosperity for the county.”

Mr Agar also believes that the future make up of Suffolk’s top 100 companies will also be led by “the Cambridge effect” - that is, the concentration of technology companies in Suffolk’s neighbouring county, whose influence is spreading eastwards.

“I think you’ll see down the A14, and the A12, these corridors of economic activity that will absolutely make it a more silicon region,” he said. “You can see that in Martlesham, the incubation centre that’s going on there is driving a lot of change.

“A lot of new young companies are coming now to Colchester too – there’s a big gaming community down there now which people of our stage in life aren’t that familiar with. These gaming companies, when they get popular, they really grow fast in terms of growth once they’ve had a couple of games that really take off.”