WEBVTT - Goldman Sachs Foundation President Talks UK Business Program, SMEs  

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<v Speaker 1>Just over a week, of course, until the Chancellor Rachel

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<v Speaker 1>Reeves will unveil her Spring Statement, which is expected to

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<v Speaker 1>announce further spending cuts to keep the deficit and borrowing

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<v Speaker 1>under control. This is many UK businesses are facing tax

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<v Speaker 1>rises when an increase in employers National Insurance comes into

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<v Speaker 1>force next month. Small businesses then, of course key to

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<v Speaker 1>drive in the economic growth the government so desperately wants

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<v Speaker 1>and needs. So what would help them? What is the prescription?

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<v Speaker 1>The latest report from Goldman Sachs, built on their ten

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<v Speaker 1>thousand small Businesses program, contains some key recommendations. Joining us

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<v Speaker 1>to discuss is a Sahu Pompei, Global head of Corporate

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<v Speaker 1>Engagement at Goldman Sachs and President of the Goldman sax Foundation. Sahi,

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<v Speaker 1>thanks for joining us in the studio. What is the

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<v Speaker 1>sentiment right now amongst the small businesses that Goldman engages

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<v Speaker 1>with across the UK.

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<v Speaker 2>It's a combination of things, I'd say, I think it's

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<v Speaker 2>sort of three emotions they're having. There's a fair amount

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<v Speaker 2>of optimism about the environment and the road ahead. They're

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<v Speaker 2>concerned about the uncertainty of policies from a macro perspective,

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<v Speaker 2>and what's going to happen there, and they're also committed.

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<v Speaker 2>They're committed to bringing ideas forward. They've heard the government's

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<v Speaker 2>call for ideas on growth and they've put forth some

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<v Speaker 2>key ideas that we're calling the Growth Agenda eighteen, specific

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<v Speaker 2>ideas from small businesses in the UK for small businesses

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<v Speaker 2>in the UK as to what could propel growth. And

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<v Speaker 2>we're really talking about that because we think that's a

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<v Speaker 2>tremendous potential opportunity if we frankly listen to the small

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<v Speaker 2>business community, because those closest to the problem are often

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<v Speaker 2>closest to the solution.

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<v Speaker 3>So plenty in those recommendations for the government to look

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<v Speaker 3>at things like skills, you know, calls we've heard before

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<v Speaker 3>from business groups here in the UK. What's kind of

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<v Speaker 3>the most important ones, the most important message these businesses

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<v Speaker 3>want to try and send.

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<v Speaker 2>I would say three things. One, access to capital. You

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<v Speaker 2>need capital to grow your businesses. And what the small

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<v Speaker 2>business community is asking for is effectively a summit. They

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<v Speaker 2>want to bring together the small business community and match

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<v Speaker 2>them with potential investors. Sometimes getting those connections. There's a

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<v Speaker 2>bit of a plumbing issue to connect our small business

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<v Speaker 2>community here in the UK with the investors that may

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<v Speaker 2>want to contribute to their business, so they're asking one

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<v Speaker 2>for a small business summit. The second thing they're asking

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<v Speaker 2>for is talent. Lots of them that have open positions

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<v Speaker 2>can find individuals that are qualified for those positions, and

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<v Speaker 2>they say, what we really need is some changes to

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<v Speaker 2>the UK educational system to teach entrepreneurship how to read

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<v Speaker 2>a spreadsheet, things like public speaking, time management, the skills

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<v Speaker 2>that allows individuals to graduate and then be able to

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<v Speaker 2>enter the business environment job ready and so phenomenal educational system.

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<v Speaker 2>But those tweaks our small business community is asking for.

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<v Speaker 2>And the third one relates to AI. Small business community

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<v Speaker 2>does not want to be left behind. As it relates

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<v Speaker 2>to AI, they're leaning in. Some of them are already

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<v Speaker 2>using various tools they report to me chat, GPT, Perplexity

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<v Speaker 2>order and a number of other tools, but they would

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<v Speaker 2>like to have a program where tech companies UK government

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<v Speaker 2>get together with small businesses and really help them chart

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<v Speaker 2>that road forward. So those are the three very specific

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<v Speaker 2>recommendations that we're hearing from small business community.

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<v Speaker 1>That's the near term, and then there's a longer term

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<v Speaker 1>when it comes to education and ramping up those skills sets.

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<v Speaker 1>What about taxes then, and we talked about the national

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<v Speaker 1>insurance burden. To what extent is the tax burden on

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<v Speaker 1>the SME space within the UK ahead wind or are

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<v Speaker 1>they able to navigate that? How much concern is there

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<v Speaker 1>about that burden.

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<v Speaker 2>It's a bit of both, right because our businesses we

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<v Speaker 2>have over two three hundred businesses that have graduated from

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<v Speaker 2>the program. This is the fifteenth year that Goldman Sax

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<v Speaker 2>is doing the program. These small business owners employ sixty

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<v Speaker 2>two thousand individuals. They are about five point six billion

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<v Speaker 2>pounds of revenue, so really a substantial community. And so

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<v Speaker 2>some of them it's really is a headwind. It's increased

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<v Speaker 2>their costs and they're concerned about that, and some of

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<v Speaker 2>them have delayed their hiring or reduced their hiring as

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<v Speaker 2>a result of it. Other businesses in our community are

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<v Speaker 2>a bit larger and for them they're able to absorb

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<v Speaker 2>the costs a bit more.

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<v Speaker 3>Is sentiment worse now than it was a year ago

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<v Speaker 3>or before the government changed?

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<v Speaker 2>You know, I wouldn't say it's worse now. I think

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<v Speaker 2>what we're seeing is, you know, with all the tariff discussions,

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<v Speaker 2>you know a fair amount of uncertainty about what's going

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<v Speaker 2>to happen to our small business owners in that environment?

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<v Speaker 2>Tend to stand still. If you're going to open that

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<v Speaker 2>new factory, if you're going to launch that new product,

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<v Speaker 2>you're going to stand still and sort of figure out, well,

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<v Speaker 2>what's the environment I'm going into before I expend those costs.

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<v Speaker 2>So what we're seeing is a slowing in terms of

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<v Speaker 2>certain decision making that the small businesses had previously, you know,

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<v Speaker 2>had on tap.

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<v Speaker 1>How they're thinking about international markets. And you know, I

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<v Speaker 1>was speaking to the CEO of Euroinext today and he said, look,

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<v Speaker 1>the US is simply becoming far less compelling as an

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<v Speaker 1>international investment destination for European businesses and he expects a

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<v Speaker 1>slow down in European businesses looking for example, to IPO

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<v Speaker 1>in the US. When it comes to the view around

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<v Speaker 1>Europe versus the US, whether this government needs to be

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<v Speaker 1>more in terms of that relationship with Brussels and Europe.

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<v Speaker 1>What is this, What does the sense from small businesses

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<v Speaker 1>and what are they prioritizing in terms of their international market.

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<v Speaker 2>It's a fabulous question because that's one of the things

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<v Speaker 2>that we've been asking them about, which is what is

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<v Speaker 2>your interest in terms of export doing business Almost universally,

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<v Speaker 2>they're very, very interested in tapping more into the US market.

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<v Speaker 2>We're hearing that across sector. Some of them are saying, one,

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<v Speaker 2>how do I do that? You know, what's the roadmap

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<v Speaker 2>to be able to do that too? The regulatory burden

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<v Speaker 2>in terms of navigating that, certainly the tariff's conversation is

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<v Speaker 2>a part of that as well, But the interest is

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<v Speaker 2>unequivocally there, and I think they're trying to figure out

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<v Speaker 2>how they could potentially do that because they're interested in growth,

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<v Speaker 2>and so is the growth opportunity here in the UK.

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<v Speaker 2>But maybe there's additional growth opportunity in the US as well.

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<v Speaker 2>As I often say to people, you know, when I

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<v Speaker 2>talk to business owners, we've got sixteen thousand in the

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<v Speaker 2>United States that have graduated from the program, the twenty

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<v Speaker 2>three hundred here. I'm often asked like, is the grass

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<v Speaker 2>greener in the United States? And I usually say, the

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<v Speaker 2>grass is greener where you water it, right. And so

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<v Speaker 2>the UK small business community is an extremely vibrant community,

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<v Speaker 2>and we just need to make sure that we're listening

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<v Speaker 2>to them, and this Growth Agenda document that we've published

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<v Speaker 2>really is their views on what it takes for them

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<v Speaker 2>to be able to expand.

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<v Speaker 3>It's interesting to hear that the policy conversation in the

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<v Speaker 3>United States is being felt by businesses in that program

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<v Speaker 3>as well. When we spoke last November, it was just

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<v Speaker 3>after the election, and we talked to you about another

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<v Speaker 3>part of your job, which is Goldman's philanthropic work, and

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<v Speaker 3>how things might change under the Trump administration. I just

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<v Speaker 3>wonder what has changed for that part of your job

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<v Speaker 3>since then.

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<v Speaker 2>You know, we really have not pivoted in terms of

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<v Speaker 2>our philanthropic commitment. Our signature programs have been on small

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<v Speaker 2>business and entrepreneurship and that is steadfast. That is a

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<v Speaker 2>bipart distant issue. It's an area that is concerned around

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<v Speaker 2>the globe. We run this program also in France as well,

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<v Speaker 2>and so that aspect of our programming has not changed

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<v Speaker 2>at all.

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<v Speaker 1>Does the Trump administration policies walking back some of the focus,

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<v Speaker 1>for example, well taking frankly a hostile view on things

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<v Speaker 1>like inclusion diversity when it comes to that workforce, is

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<v Speaker 1>that having an impact at all as businesses kind of

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<v Speaker 1>to look look to that, to that pretty dramatic policy reset,

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<v Speaker 1>and we say we're seeing businesses adjust to.

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<v Speaker 2>That we're not seeing the small business give Certainly everyone's

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<v Speaker 2>listening to it, hearing about it, but we're not seeing

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<v Speaker 2>changes in the way that small businesses run their business,

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<v Speaker 2>in the way that they hire they these are these

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<v Speaker 2>are enterprises like you know, a gym, a medical facility,

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<v Speaker 2>a maternal health facility, that really are committed to how

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<v Speaker 2>can I pay my employees they usually pay themselves last,

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<v Speaker 2>how do I figure out the regulatory landscape? How do

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<v Speaker 2>I deal with the insurance tax? These are the kinds

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<v Speaker 2>of issues that they're navigating, and frankly, they want the

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<v Speaker 2>best talent wherever that that talent is going to come from.

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<v Speaker 3>Okay, say Pompey, great to have you with us in studio.

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<v Speaker 3>Thank you so much for joining us. Global Head of

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<v Speaker 3>Corporate Engagement at Goldman Sachs and President of the Goldman

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<v Speaker 3>Sachs Foundation.