The UK must show it remains a world-leading place to invest
This week the UK will host investors from around the world at the Global Investment Summit. This is not only an opportunity to showcase British investment opportunities, innovation and expertise but it is also an important moment to remind decision makers why the UK has always been a top place to invest and grow.
The UK cannot be complacent, we face greater competition than ever before.
The Prime Minister’s vision of a high-wage, high-skilled, high productivity future is bold and it’s one that business backs. But to turn this into a reality will rest upon increasing investment.
The importance of business investment to the future of the UK economy cannot be understated. This is how we build businesses which can be nationally and internationally competitive, how we meet our net-zero targets, how we upgrade our infrastructure and how we help regions to “level up”. Investment helps build firms with the capability to export which leads to greater productivity, innovation and resilience which is the ultimately the only sustainable route to higher wages.
In the global race for investment, the government must do more than talk a good game
So, the challenge not just for this week but for the long term is how can the UK compete, and win. The government should initially take action on three fronts.
Firstly, ministers should ensure our domestic economic policies create an environment which clearly prioritises investment. This means reforming business rates, ensuring regulators do not stifle innovation and enabling firms to decarbonise.
The upcoming budget is a perfect opportunity for the government to step up to the plate and reform taxes to reward companies who invest to become cleaner and greener. Against the backdrop of COP26, kicking the can down the road isn’t an option.
Secondly, they need to focus on future-proofing our economy, supporting investment in the industries of tomorrow; from AI and fintech to genomics and quantum.
The Prime Minister has rightly set out plans to cement the UK’s place as a science superpower, placing it front and centre in the Integrated Review. To achieve this, the government will need to deliver on its commitment to increase R&D funding to £22bn by 2024/5, improve tech adoption among SMEs and supporting more firms to export in these growing areas of demand.
This will equally allow the UK to truly capitalise on our regional strengths, a key driver of growth. Take the North-East for instance; the region has become the centre of the UK’s green energy revolution. Utilising all our policy levers to create economic clusters in emerging industries around to country will help to supercharge the economy. Other nations are rapidly investing in these areas, we cannot afford to be a laggard.
Thirdly, they need to enhance our work with global partners, both old and new, to create new markets for British goods and services. The old government adage “invest to export” has an important sentiment – you do not attract investment and build a strong, competitive economy for the sake of it, you do so to be competitive internationally.
Take our services industry which employs the vast majority of the UK workforce and contributes 80 per cent of UK economic output. This domestic strength translates internationally, making the UK the second-largest exporter of services globally after the US. If business invests to build new industries, develop world class green goods and services and increase productivity and innovation then they need confidence that their opportunities to grow globally are there as well.
In the global race for investment, the government must do more than talk a good game, but follow through in creating a dynamic, modern and globally competitive economy at home.
Andy Burwell is the CBI International Director.
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