Clusters Think In - Leadership

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

Clusters ThinkIn: How can good leadership drive regional and national growth?

The fifth of the CBI Clusters ThinkIns took place at KPMG, Birmingham on 13 July, in partnership with Virgin Media O2 Business. Leaders from business, government and academia gathered together to discuss the role of leadership in creating successful clusters.

The group was welcomed by Steve Hickman, Partner at KPMG and Midlands lead for its private business service. Mr Hickman highlighted the rich history of Birmingham’s automotive and manufacturing industry and its potential to the UK economy as it looks to reinvent itself as a major business hub.

For business to show leadership, it was agreed that strong guidance from the government was paramount. Ian Cuddington, Director of Economic Development at Rolls Royce, stated that research & development in the aerospace industry is such a long-term & expensive endeavour that consistent support from government needs to be in place, as they will be working on projects “long after the current crop of politicians is gone.”

Simon Collinson, Professor of Innovation at the University of Birmingham, made a strong case for the importance of local leaders. “Strong leaders at the local level are able to pull together a consensus across both private and public sectors about what are the target points for regional growth, and lobby effectively to central government or other funding agencies or policy agencies to make that happen,” he said.

In an economy as traditionally centralised as the UK’s, strong regional leaders were important, and some – such as Andy Street, mayor of the West Midlands Combined Authority – had contributed to regional prosperity, Prof Collinson said. But too often, dysfunctional regional government gets in the way of more effective placemaking, leaving regions unable to identify and implement actions that could boost growth.

Several participants noted that stable leadership – both at a regional and national level – was vital in giving businesses the security they needed to deliver on longer-term opportunities and ‘big bets’ to drive regional prosperity.

Kirsty Lloyd-Jukes, Head of Investor Relations at Waymo, a self-driving car company and subsidiary of Google’s parent company, Alphabet, highlighted that inward investors saw government certainty as an important factor when deciding to invest.

“When you’re talking about a long-term capital-intensive project that by its nature has some risk, you really do look for certainty from government around regulation, regulatory support, speed of regulation, and also plenty of investment alongside it,” Ms. Lloyd-Jukes said.

Tim Hawkins, Chief of Staff and Member of the Executive Committee at the Manchester Airports Group, noted that under the stable, long-term guidance of figures like Howard Bernstein and Richard Leese, Greater Manchester had taken a pragmatic approach that made politics subordinate to the prosperity of the region.

“Politics, I don’t think, ever got in the way of Manchester as a city council or a combined authority working with government to secure what was best for Manchester,” Mr. Hawkins said. “It created a stability and a platform for conversations about investment growth,” he said.

Government pragmatism was a recurring and critical theme: many participants felt the best thing leaders could do was reduce the friction that sometimes hampered growth.

Ian Bailey, Regional Director for Virgin Media O2 Business, pointed out that local red tape often sometimes got in the way of his company delivering improvements to regional connectivity:

“[We] face local challenges with regard to planning departments where we’re trying to roll out 5G, and there’s a real desire to get that into the particular region because of lower level of infrastructure or whatever, and it’s been held up by planning departments,” he said. It wasn’t so much policy that got in the way of those improvements, but friction on a local level, Mr. Bailey said, citing clusters as a potential solution to helping companies overcome this.

National and regional leaders could also benefit from taking a longer term view of the opportunities and economic prosperity that can be created through a cluster approach by backing promising regions, without fear of being seen to play favourites. Tim Hawkins highlighted the potential for airlines to work together to better serve business travellers to Stansted – a short distance from Cambridge – from places like the West Coast of the US and Singapore. These are vital strategic markets for the deep technology and R&D focused businesses that are forming and locating in the Greater Cambridge area.

“We’ve been trying to sell this idea to central government that they should come and sort of bless this, and talk about this being something of great interest to the UK, and the success of that as a region would be great and this could help it,” Mr. Hawkins said, but government are reluctant to back Stansted over nearby rival airports.

When it comes to storytelling, Sam Markey, Ecosystem Director at Connected Places Catapult, argued that there is a huge opportunity for places to rescript their narrative, particularly given people’s changed relationship to location that has been borne out of the pandemic.

Mr. Markey put the responsibility of shifting place narrative on business leaders, arguing that they need to look at a location and consider “what are you actually good at, what are your natural assets, what are your legacy assets” and develop a brand from this when attracting talent.

To conclude, the role of strong governance & leadership is undeniably paramount to the success of businesses – of vital importance are:

• Strong leadership - consistency & pragmatism instils security in businesses/projects that are capital intensive & long-term
• Storytelling - a strong figurehead can build the brand & narrative of a region
• Shared economic prize - leadership & figureheads needed that can become focal points for the common interests of businesses

We will continue to reflect and assess the success factors as we move to the Oxford-Cambridge Arc for the next roadshow in Milton Keynes, where we’ll be considering: How can regions and nations help the UK become internationally competitive?

In the fifth in our 'Clusters Think In' podcast series, Hashi Mohammed, Contributing Editor at Tortoise Media, is joined by Kirsty Lloyd Jukes, Head of Investor Relations at Waymo, part of Alphabet, and Prof Simon Collinson, Deputy Pro-Vice Chancellor for Regional Engagement at the University of Birmingham, to discuss how leadership in place can be developed to drive successful clusters across the regions and nations of the UK and the decisive role business can play in shaping future economic growth. 

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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.

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