As we navigate 2025, businesses face significant threats to growth. Organisations face a complex landscape shaped by lingering macroeconomic challenges, evolving legislation, and the rapid pace of technological change, to say nothing of geopolitical uncertainty which has ratcheted up a notch since our survey was conducted in November-December 2024. Based on findings from White Space Strategy’s 2025 Growth Outlook, this blog explores the key threats to growth and actionable steps businesses can take to mitigate these risks.
Macroeconomic Challenges in 2025: How Businesses Can Prepare
In late 2024, businesses identified macroeconomic uncertainty as the most significant threat to their performance in 2025. According to the 2025 Growth Outlook report, macroeconomic factors such as inflation, cost-of-living pressures, and high interest rates remain top concerns for business leaders. More recently, with the intensifying threat of international trade wars and the growing impact of tariffs, these challenges are set to become even more pronounced. Although the volatility of recent years has slightly subsided, the economic headwinds are far from over.
What can be done?
One approach to minimising the impact of these risks is through analysis of past performance and current market conditions to identify which metrics have the greatest business impact (e.g. inflation, commodity prices or consumer confidence indices). As such, setting up early warning systems which signal potential changes in these key metrics, allow businesses to anticipate and prepare for changes before they escalate.
Scenario modelling is another valuable tool, allowing companies to explore a range of economic parameters and determine the actions required under different conditions. While no single scenario will perfectly predict the future, planning for multiple potential outcomes ensures businesses are better equipped to navigate a variety of challenges.
Legislative Changes and Their Impact on Business Growth
The introduction of new legislation is another significant threat to growth in 2025. Changes in regulations, such as national insurance policies in the UK, PPWR and DORA within Europe are forcing businesses to adapt quickly. Furthermore, adapting to rapidly changing trade regulations and tariffs could be a key theme international businesses face throughout 2025.
According to the 2025 Growth Outlook, legislative changes rank among the top three threats identified by business leaders, yet less than half of business feel confident in their ability to mitigate these risks.
What can be done?
To address this challenge, businesses can take proactive steps to stay ahead. One obvious approach is to work closely with regulators and engage in productive conversations with policymakers to gain a clearer understanding of the direction and expected pace of regulatory changes with enough time to plan for changes.
Equally important however, is understanding customer expectations impacts. Engaging with customers and the broader market to identify the changes they anticipate and the requirements they will have under the new legislative landscape can provide invaluable insights for planning. Additionally, engaging the broader supply chain to understand the impact of potential changes on them can be valuable for planning for different eventualities.
By combining regulatory engagement with a deep understanding of customer needs, businesses can better navigate the complexities of legislative changes.
Innovation Gaps: Why R&D is Critical for 2025
In a year where innovation is critical for capturing emerging opportunities, the lack of product innovation has emerged as a key threat to growth. The report reveals that businesses are increasingly concerned about whether their R&D capabilities are sufficient to meet the demands of fast-changing markets.
As one Supply Chain Strategy Director noted, “With product development a core focus to attract new revenue, a big fear businesses currently have is whether their innovation functions are up to scratch.”
While 57% of respondents feel confident in their ability to bring new products to market, there is still a large portion of businesses that admit they are only partially prepared. This underscores the need for greater investment in R&D and innovation capabilities.
What can be done?
To address this challenge, businesses can adopt several low-effort strategies to accelerate innovation:
Rapid, light-touch proposition testing, achieved through a handful of short-fire interviews can provide quick insights into customer preferences and product viability, particularly in B2B markets where launch and feedback cycles can be much longer than in B2C. Focus groups may be appropriate for certain categories and can offer valuable qualitative feedback, helping to refine ideas and align them with market needs. Acting iteratively and embracing agile mindsets is key to accelerating development cycles, ensuring they stay ahead in dynamic markets.
Conclusion
The challenges of 2025—macroeconomic uncertainty, evolving legislation, and innovation gaps—demand focused and strategic action; businesses must adopt forward-thinking approaches.
By identifying most impactful economic metrics, implementing early warning systems, and engaging in scenario modelling, companies can better anticipate economic shifts and prepare for a range of potential outcomes. Similarly, proactive engagement with regulators and customers will be critical for navigating legislative changes and aligning strategies with market needs. Innovation remains a cornerstone of growth, and businesses that prioritise rapid testing, iterative development, and implement market feedback will be best positioned to capture emerging opportunities.
While the road ahead is complex, those who invest in understanding their market needs and work iteratively are best placed to overcome the growth challenges of 2025.
Thinking about addressing your growth threats for 2025?
Contact White Space Strategy today to learn how we can support your efforts.