Hot take: energy challenges aren't top of mind for businesses in the UK and Kenya...

In the UK, sky-high energy prices dominate the news and political discussion. Yet digging into business sentiment data suggests it's not as important as other factors. Falling demand, competition, tax, inflation, and worker shortages are all more pressing issues for business than energy prices - the main concern for just 4% of respondents (see first chart).

I was struck by how similar this is to the story in Kenya, even though the economies are very different. In Ken Opalo’s latest piece on the importance of energy for businesses, he referenced a survey of small businesses in Kenya which highlights that energy issues are the most important problem for just 5-6% of firms (second chart). In Kenya, the energy question is framed around reliability and access, not prices, but the broader theme is the same: energy is not the most important challenge on business leaders' minds.

My takeaways:

1. Governments focusing on energy as their primary policy to support businesses may not see much impact unless they address other constraints to growth.

2. People vote, not companies. High energy costs and lack of electricity access impacts households too. At least in the UK, the top issue for businesses is falling demand for goods and services, so reducing energy bills could free up more consumer spending.

3. These types of surveys may not effectively capture the importance of low-cost, reliable power. For example, the responses are not weighted by employment. Businesses with energy concerns might be larger employers but make up a small number of the samples. They also don't effectively capture the scale of the challenge, which is acute in some sectors. Some types of firms may not even operate in these countries because power is too expensive or unreliable.

What do you think - are energy challenges over-rated versus other policy priorities for business?