After a turbulent few years, Herefordshire and Worcestershire businesses are ready to move forward. Chamber CEO Sharon Smith tells us why realism and optimism together can power the region through 2026…

AFTER a relentless run of global shocks, the outlook for 2026 feels subtly different. The mood among local business leaders is shifting – not toward blind optimism, but a steadier grounded kind of confidence. Across Herefordshire and Worcestershire, there’s a sense that progress is possible for those ready to adapt, invest and collaborate.

Sharon Smith, Chief Executive of Herefordshire and Worcestershire Chamber of Commerce, captures that balance between realism and optimism. “Looking back at this year, it can only be reported to have been another difficult year for business,” she says. “With seemingly one global challenge after another, year on year since Covid – Brexit, the war on Ukraine, the cost-of-living crisis, slow economic growth, UK and overseas political shocks – the impact on business cannot go unnoticed.”

That realism is essential, Sharon argues, but it’s not the whole story. “Alongside this UK economic uncertainty and future plans for more changes also impacts business confidence and therefore decisions to invest and grow,” she notes. “And yet, despite the challenges, businesses in my experience are consistently resilient and forward-thinking.”

It’s a line that sets the tone for the year ahead. 2026 will demand agility and discipline – but also belief. “Some businesses are able to flex quickly in response to change or challenge,” she continues.

“Others may take longer to pivot, but may also have greater resource and reserves to do so. Whatever the size or sector, we have countless examples of amazing businesses who are driven, motivated and will ultimately succeed.”

After years of turbulence, Sharon says, the region’s strength lies in its endurance. “You’re hit with something, hit with something, hit with something else,” she reflects. “But time and again, firms have adapted, persevered and found new ways to move forward.”

Still, that hard-won resilience comes with a cost. Caution has crept in. “Uncertainty has pulled many businesses into a holding pattern,” she acknowledges. Decisions are deferred, investments delayed until the fog clears. Meanwhile, input costs — from energy and materials to taxation — continue to squeeze margins, while exporters still wrestle with thicker paperwork and new frictions.

Planning and regulatory regimes, Sharon adds, “can feel inconsistent and patchy” across boundaries, creating drag for firms that operate in multiple places.

Yet she is adamant that realism must never turn into resignation. “You can’t wait,” she insists. “Next year you’ve got to do what you can do within what you can control.” That, Sharon believes, is where confidence returns — and where the region’s next wave of growth will come from.

Skills first: the talent equation is changing
Talk to any local employer and one theme dominates: people. An ageing workforce is moving into retirement just as the demands on skills are rising. “Both large and small businesses in many sectors report that an ageing workforce is causing them some challenges,” Sharon explains. “As some employees reach the end of their career, businesses are finding it hard to recruit a younger generation with the right skills.”

The region’s response, she says, has been encouraging. “During the last financial year, the final part of UK Shared Prosperity Funding focused on people and skills. Both Herefordshire and Worcestershire Councils applied much of the funding to upskilling the local workforce, which was welcomed by all. The training, either free or subsidised, was taken up by local businesses at great speed.”

That experience, she argues, revealed a truth often overlooked: the biggest barrier to training isn’t time or availability – it’s cost. The appetite to learn is there.
Longer, higher-level training remains a frustration. “Businesses have long voiced concern about the inability to use the Apprenticeship Levy on this type of training,” Sharon says. “Despite some paying vast amounts into the Levy, these costs have to be met by the business outside of this scheme. We are, however, delighted to hear of the Government’s Apprenticeship Levy reform, to the Growth and Skills Levy.”

But skills, she stresses, are more than certificates. Employers are hiring for adaptability, transferable skills and the right mindset — investing in lifelong learning. The payoff is twofold: retention follows where culture leads. A focus on wellbeing, flexibility and purposeful work is becoming central to productivity and loyalty.

Gen Z and the new workplace contract
For Sharon, one of the most encouraging forces shaping 2026 is the rise of a new generation in the workplace. Far from a source of tension, she sees the next wave of talent as a wellspring of energy and fresh ideas.

“It’s widely reported that the new generation of employees, primarily Generation Z, are reshaping the workplace with a focus on flexibility, purpose and work–life balance,” she says. “This may bring its own challenges for business as it adapts, but it’s exciting to see how Gen Z’s prioritisation of fairness and strong social and environmental values will deliver economic growth, particularly when this generation is dominant in management roles.”

That shift, Sharon believes, should be embraced. Their outlook reflects a wider transformation already underway — one in which wellbeing, inclusion and sustainability are embedded in business models rather than bolted on.

This isn’t about replacing the old guard, she adds, but blending experience with new thinking. As employers adapt their cultures to attract and empower younger staff, the result is a more balanced, innovative and values-driven workforce — one that mirrors the kind of economy the region aspires to build.

Productivity, AI and the SME ‘superpowers’
If skills are the foundation, technology is the lever. Across manufacturing and services alike, firms are rediscovering the power of marginal gains – automation here, better data there — compounding into resilience and competitiveness.

AI now sits at the centre of that story. “The adoption of AI is undoubtedly on the rise,” Sharon says. “Many businesses know about it but don’t fully understand the extent of its power in their own business. It’s great to see these statistics gradually increasing, and AI will no doubt support most businesses’ efficiency, productivity and perhaps most excitingly, innovation and creativity.”

For Sharon, the Chamber’s role is twofold: to demystify AI for non-technical leaders and to help move adoption from hype to hands-on use. Tools once reserved for corporate giants are now within reach of micro and small firms – what she calls “productivity superpowers” for the local economy.

Costs, certainty and the investment question
No vision for 2026 can ignore the cost base. “Increased costs have remained a burden on businesses throughout this year,” Sharon says. “With many examples: increases in Employers NI, the National Living Wage, energy costs, raw materials, food prices, taxation, inflation and business rates – the list is long. Many businesses report that while they are increasing revenue, profits are being eroded at alarming rates.”

What would help? Stability and predictability above all. Businesses are watching inflation, budgets and the Bank of England base rate closely as they plan pay rounds and capital spending.
Sharon avoids party-political commentary, but she is direct about what leadership means. “If it was business, they would find a way. That’s what top leaders do,” she says. Government, she argues, must show the same creativity to unlock growth – while Chambers continue to press the case from the front line.

Trade, regulation and a pragmatic route to growth
Post-Brexit frictions remain a reality for firms trading with the EU. “It’s harder; it’s more expensive,” Sharon acknowledges. But she is equally clear that the answer is not to turn inward. “Forward-thinking companies are still exporting — solving the problems they can, and finding other markets when one route closes.”

On regulation and planning, consistency matters. “Businesses that work across multiple counties report that implementation can feel inconsistent and patchy,” she says. That inconsistency creates inefficiencies and drags on growth. Sharon wants to see greater cross-boundary coordination so firms can operate “one system across areas wherever possible.”

Cybersecurity, too, is non-negotiable. “With a cyber attack now 67% more likely than a physical one, businesses must continue to be prepared,” she warns. The Chamber continues to work with partners to raise awareness and preparedness across the region.

The power of place – collaboration as a competitive edge
Perhaps the most encouraging shift of recent years, in Sharon’s view, is the renewal of local ties. “Since Covid, our sense of place, purpose and local connectivity has remained strong,” she says. “Businesses continue to have great pride in local partnerships and collaborating, rather than historic competition.”

What began as community solidarity during the pandemic has evolved into lasting partnerships between businesses, charities and the public sector. The rise of social value, the B Corp movement and more thoughtful approaches to environmental and community impact are no longer PR add-ons — they’re part of the operating model.

“The irony,” she adds, “is that difficulty globally and nationally actually creates more strength locally.” In a world of volatility, local relationships, trust and knowledge have become strategic assets in their own right.

2026: A practical optimism
So, what will success look like 12 months from now? Not a world free of shocks. Rather, more firms moving from wait-and-see to test-and-learn. More investment in people, paired with clearer expectations. Wider AI usage in everyday workflows whilst remaining focused on the human element and emotional intelligence that cannot be provided by technology. Tidier export processes and smarter risk management. Stronger local coalitions that turn values into outcomes.

And a business community that leads with example. “In the meantime,” Sharon says, “businesses will continue to push forward and create their own opportunities.” In other words: control what you can, together — and make 2026 the year realism became a platform for growth.

Sharon’s Top Tips for a Successful 2026

Practical optimism from the Herefordshire & Worcestershire Chamber CEO

1. Control the controllables.
“You can’t wait… next year you’ve got to do what you can do within what you can control.”
Don’t lose energy worrying about the uncontrollable. Focus on what’s within reach — your people, your processes, your partnerships — and build momentum from there.

2. Invest in your people.
An ageing workforce and rising skills needs make training and development non-negotiable. Whether through apprenticeships, upskilling or wellbeing, the return on people always pays off.

3. Embrace technology — especially AI.
AI and automation are no longer the preserve of big corporates. “AI will support most businesses’ efficiency, productivity and perhaps most excitingly, innovation.” Start small, experiment and build confidence.

4. Back the next generation.
Gen Z’s values of fairness, sustainability and work–life balance align perfectly with the kind of business community we want to build. Harness their ideas and give them space to lead.

5. Think local, act collaborative.
“The irony is that difficulty globally and nationally actually creates more strength locally.”
Lean into local networks, supply chains and partnerships. Community strength is becoming a genuine competitive advantage.

6. Build resilience into everything.
From cyber preparedness to succession planning, resilience is the through-line for 2026. The businesses that adapt, anticipate and collaborate will thrive whatever comes next.