Clusters Think In - Driving Growth

The sense maker guide provides background and an overview of clusters in the UK to help stimulate thought. 

In the first in our 'Clusters Think In' series, Hashi Mohammed, Contributing Editor at Tortoise Media is joined by the CBI's Chief Policy Director, Matthew Fell, to discuss how economic clusters can help drive growth in every part of the UK.

In this episode we discuss how to deliver genuine economic growth in an area through clusters, the conditions and barriers for success. Matthew also talks about the Zero Carbon Humber - the CBI’s first ‘demonstrator cluster’ which will help businesses and stakeholders understand the journey from ‘good to great’. 

'Clusters Think In' is a podcast series included as part of the CBI's series of Thriving Regions events. Listen and subscribe to the series here.

To kick-start the first regional roadshow of the economic clusters series, we asked a broad opening question: can clusters drive growth in every region and nation of the UK?

In short, yes. But what is a cluster? And practically, how can they be supported to develop and drive genuine economic growth?

George Freeman MP began with a neat definition, summarising clusters as a “place[s] where people take risks in pursuit of opportunities.” But forewarning, these clusters can’t be magicked into existence by the government. Freeman emphasised that successful cluster growth is organic, and that businesses are the ones who make it happen.

A supportive policy agenda can help, but ultimately, businesspeople are the driving force. “People who take risks create jobs,” said Freeman, “and our job is to make that easier.”

The most successful clusters are those that grow naturally, responding to local need and communities, and build on existing areas of strength, be it the automotive industry in the North East, or clean growth in East Anglia. Each having developed its own unique origin story and narrative, perhaps one of humble beginnings, but now confidently competitive as a world-class industry.

This understanding of each regional context, for its unique opportunities, challenges and overall context, is integral to driving sustained growth and productivity, and ultimately achieving levelling up.

“We won’t level up by moving the Golden Triangle north,” said Mr. Freeman. “We’ll level up by building the Golden Triangles, the clusters, all round the country.”

In order to grow and reach their full potential, locally, nationally and internationally, clusters need infrastructure – and that’s not limited to roads and rail. Digital connectivity is a key part of the infrastructure story, and improving digital literacy could help drive growth.

“There are lots of companies, particularly as you go out into the regions, that haven’t yet got those skills, and there’s lots more that the government can do but also that the private sector can do to encourage that.” said Jo Bertram, of O2 Virgin Media Business. Wider connectivity and skills could also help make levelling up a more inclusive project, Ms. Bertram said.

The importance of skills – digital or otherwise – was a recurring theme. Stephanie Hyde, UK CEO of JLL, underlined how crucial a well-trained workforce was in encouraging companies to do business.

“We’re involved in advising lots of companies about where to invest, and where they want to make that home, and I hear time and time again that skills is the biggest factor, and clustering helps skills,” she said.

“We’ve been talking about getting better balance across the UK for many years,” Ms. Hyde added, “[and] I think clustering is one of the most exciting things that will really drive this.”

Ultimately, it’s a cluster’s people that will make it a success – but they need to be amply supported in all sorts of ways. As the CBI have hypothesized, there are some key factors that drive the success of a cluster, these are:

• Shared economic prize – unifying outcomes and stake in success
• Anchor institutions – strong organisations that others gravitate / coalesce around
• Storytelling – strong place narrative, USP
• Strong leadership / figurehead – go to ‘place’ leader
• Great partner collaboration
• Supportive policy – the right policy levers that make a difference

We’ll be exploring these factors, and gathering further insights, evidence and case studies to test them, as our ThinkIn series continues. Our next stop is in Cheltenham on May 25, where we’ll be focussing on the skills clusters need now – and the skills they’ll need in future.

As the UK emerges from the effects of the global pandemic, business and government must work in partnership to harness the benefits of greater connectivity. Read Jo Bertram, Managing Director, Business & Wholesale at Virgin Media O2, blog. 

Virgin Media Business and O2 Business have joined forces to reimagine connectivity – as a digital partner that helps UK organisations rise to the challenge of the new working dynamic between companies, consumers and their communities.

Virgin Media O2 Business plays a leading role in supporting the public sector and businesses of all sizes to achieve more, from small and medium organisations right up to large enterprise and wholesale partners. This includes offering a variety of managed connectivity services and flexible working capabilities, security, data insight, 5G private networks and cloud solutions, as well as wholesale services to other operators and partners.

Virgin Media O2 Business is committed to using the power of connectivity to share more with communities across the UK, taking action to close the digital divide and helping to build an inclusive, resilient, and low carbon economy.