Neil Kennedy: 10 pillars for economic growth

Whichever way you look at the Brexit referendum result, it was a vote for change.

'UK infrastructure is not at the standard it should be,' says Neil Kennedy. Picture: Contributed

The UK voted to leave the European Union, but with this people also voted to change the way the UK operates. On 23 January, the Department for Business, Energy & Industrial Strategy (BEIS) published a green paper setting out the government’s long-term Industrial strategy for the UK.

The key message throughout the paper is productivity. By increasing productivity in all sectors we can expect an increase in economic growth and living standards across the UK. The productivity gap between different parts of the country has been growing steadily for decades with the greatest concentration of productivity, and consequently wealth, localised in London and the south-east of England.

In order to ease this gap, the government has outlined its ten pillars to drive growth and business forward:

Investing in science, research and innovation

An additional £4.7 billion will be invested in research and development in the next three to four years in order to develop new technologies and further commercialise our existing products.

Developing skills

There will be a focus on technical education to increase skills in science, technology, maths and engineering.

Upgrading infrastructure

UK infrastructure is not at the standard it should be. Upgrades have been sought for energy, water and flood defences, transport and digital infrastructure to increase the UK’s competitiveness in the global market.

Supporting businesses to start and grow

Despite being listed as third for start-ups, the UK fails to reach the top ten when it comes to successful scale-ups, according to OECD research. In order to better understand the reasons behind this a new Patient Capital Review has been launched. The government wants to support businesses across the UK to reach their full potential.

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Improving procurement

The government intends to use “strategic procurement” to increase competition, innovation and investment. An independent review will be carried out on the Small Business Research Initiative to discover how the government can better support these businesses.

Encouraging trade and inward investment

Not enough UK firms export. A new department for International Trade has been set up to assist exporting and investment companies to increase their export potential. The government also seeks to improve the UK’s trading relationships across the world, with countries such as Canada, India, Mexico and South Korea.

Delivering affordable energy and clean growth

New energy infrastructures and technologies will be utilised in a move to providing a low carbon economy. The current system will be reviewed to identify areas for growth with the long term view of providing affordable energy for businesses.

Cultivating world-leading sectors

The government wants to maintain the UK’s position in the global market for our leading sectors, such as manufacturing, but it also wants to support other sectors. The government is offering “sector deals” that allow sectors to approach it with their ideas to improve their respective sector.

Driving growth across the country

A disproportionate amount of wealth is concentrated in London and the south-east, creating an inequality gap with the rest of the UK. The government wants to minimise this gap by increasing investment in infrastructure to restore local growth.

Creating the right local institutions

The government wants to work with the local communities, to identify their skills and knowledge, in order to set up suitable institutions that will assist the local communities to grow. This may include business networks, trade associations and educational institutions.

Individuals and businesses are being asked to take part in shaping the new industrial strategy, to provide their views and assist the government in better understanding how to achieve their goals. The response form is available from the BEIS website and the deadline for responses is 17 April.

• Neil Kennedy is a corporate partner at law firm MacRoberts

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