How the volcanic ash cloud has hit Perthshire businesses

Apr 23 2010 By Steven Stewart, Director of Corporate Communications at the Perth-based Stagecoach Group

UNTIL last week, a mention of Iceland might make you think of the Cod Wars of the 1970s, the £1 million of Perth and Kinross council taxpayers’ money lost in the banking collapse or, more likely, those celebrity TV ads for a frozen food chain.

However, the ash cloud from Eyjafjallajökull, the Icelandic volcano, has changed all that. First it was a foreign news item, most interesting to geologists and those interested in another example of the power of the natural environment.

As a former journalist, I’ve watched the story mushroom into a crisis affecting millions of people across the globe. The immediate fall out has shut down the majority of European air space and we all know nightmare stories of friends or family members stranded overseas.

The volcanic eruptions have also prompted health warnings about the impact on people with respiratory conditions. Now, as the crisis continues, there are fears for major businesses, some of which are losing millions of pounds a day.

But we should also stop to think about the impact on local economies and communities, which are interdependent with the rest of the global economy through supply chains. You may have read, for example, about the devastating impact of the ash cloud on flower growers in Kenya. There will also be an impact here in Perth and Kinross. Small and medium sized companies – the core businesses that Perthshire Chamber of Commerce represents – have undoubtedly been affected.
 
Our local economy depends on tourism, even outside the peak summer season, and with international transport links heavily disrupted, that means less potential spend on hotels, activities, restaurants and the suppliers whose goods they buy in.
 
It is also an issue for exporters. Many of our region’s high quality Scottish food and drink producers have markets not just in Scotland and the rest of the UK, but in Europe, North America and further afield. Natural disasters fall into the “act of God” definition for insurers, providing little comfort for those businesses affected. These issues also come on the back of a fragile economic recovery following the worst recession for more than 60 years. Further bad news we could do without.
 
But in such situations there are also winners as well as losers. My employer, Stagecoach Group, is fortunate to have experienced an upturn in demand for rail and coach services between England and Scotland. And in every crisis there is an opportunity for entrepreneurial vision and innovation.
 
However, perhaps the most important aspect of the current crisis, is that it gives us an opportunity to rethink what we do and how we do it – in business and in other aspects of our lives. Ecommerce and email have made the world a smaller place, but in one sense they may also have led us to forget about the importance of all things local – relationships, supply links, customers, seasonality and sustainability.
 
Consultant John Seddon told Perthshire Chamber's annual conference this week that we need to challenge convention and change the way we think about how we do business, so we manage value, instead of being distracted by targets, costs and strategic plans. Maybe the ash cloud is actually a rainbow leading to a better business future.