This is the moment to change our economy

Launching a landmark economic plan, Seize the Moment, the CBI Director-General outlined six ways business can help  transform the economy after the crisis to realise a decade of better economic growth and social solidarity.

 

Transcript

Good morning everyone. I’m Tony Danker, the Director General of the CBI. And welcome to the launch of ‘Seize the moment’.

If you were tuning in for the regular CBI @10 webinar – where you can have a quiet cup of tea and start the week slowly – I’m really sorry. Put your cup down. And get ready to change the country.

It’s my job to kick us off. And shortly I will be handing over to Lord Bilimoria, CBI President, to host a panel session with some brilliant business leaders. And we have a contribution from the Chancellor as well.

The pitch

So, here’s our pitch.

This country will never have a greater opportunity to transform our economy and society, for the better, than we have right now.

This year – 2021 – we’ve started a new relationship with the EU. We’ve been devastated by a global pandemic. We’ve advanced technologically faster than ever before. And we’re months away from COP26 – when the world must commit itself to decarbonisation.

This year – 2021 – Government is investing huge amounts in our economy – underwriting business loans, funding investment in infrastructure and innovation – and is looking anew at industry regulation for a post-Brexit world.

This year – 2021 – businesses are making changes; investments; and choices about productivity and ways of working. Looking for growth after months, in fact, years of uncertainty and pent-up demand.

This year – 2021 – the Government has published its intent to legislate on everything from hydrogen to levelling up and new skills for the future.

Who knows what next year – 2022 – will bring? Probably, a lot of politics. Possibly, a bit more business as usual.

This is the moment 

So, this is the moment.

Where we have a genuine chance to make big bets on how the UK economy will grow and compete.

To use that appetite to invest – from government and business. To collaborate globally after a decade of protectionism.

To lift thousands of young people out of limbo, so they can reach their potential. And to build on that bond – between employers and employees – now closer than ever before, after enduring a year together like no other.

The history of economies is determined by moments like this. We look at decades-long graphs of economic cycles and trajectories. Asking what made a given year the first of either a golden age or a decade of decline?

The post-war US boom. Japanese stagnation of the 1990s. Flatlining UK productivity from 2008.

So, what will be said of UK 2021?

The answer lies in all our hands. And that’s why we’re here.

It’s why the CBI has spent the past six months assessing the major economic trends that will shape the 2030 economy. Talking at length to the governments of the UK about their plans for future growth. And reaching out to every political party, economist and think tank we could call on.  

Above all, it’s why we’ve consulted with over 500 businesses of every sector, size and region. And Trade Associations covering our entire economy. To understand their hopes, their fears and their intent. Their desire for what comes next, and their appetite – considerable by the way – to invest in the future.

It’s why we call the economic strategy we’re launching today: “Seize the Moment” – How can business transform the UK economy?

So, let me tell you first, what’s in it. What it means for you. Why, I’m so confident we can pull it off. And ─ finally ─ what has to happen, starting today, to ensure that we do.

What's in our strategy?

In our strategy, we believe the UK economy must be transformed in six different ways.

First – a decarbonised economy, where the UK genuinely leads the world to net-zero and gains competitive advantage from doing so.

This is a planetary imperative. But, after years of debating the trade-offs, we can also now say it’s an economic opportunity. We argue that the UK is well placed to lead in Carbon Capture and hydrogen technologies. But we must build more gigafactories to realise our Electric Vehicle ambitions.

And with all this investment at the frontier, the UK can then develop new IP, new products, and new services for export. We can use our whole economy’s transition to net-zero to create green jobs; build on the UK’s expertise in sustainable finance; and deploy our resources more efficiently. Delivering genuine gains for every firm. And for every part of our society.

 

Second, an innovation economy. Where innovation in all its forms drives economic prosperity and social progress.

We outline how the UK can build on its existing strengths, to support greater development of leading-edge technologies; business practices; and, in fact, create entirely new sectors. To scale up leading-edge businesses on our shores. To make R&D a company pursuit not just a government target.

And then to spread the benefit of innovation everywhere. None more so than on technology adoption. We’ve spent a year moving our businesses online and building new digital maturity. Why go backwards? Go forwards and faster than before.

 

Third, a globalised economy. Where we identify how the UK’s world-beating capabilities in financial and professional services, life sciences, education, information and communication…can help us secure billions in added value, from fast-growing markets, such as the US, India, and China.

And how we get SMEs who don’t export to get started. And help those that export one product or service to one country; to export ten products or services to ten countries. They call them “superstar exporters” and we need more of them.

 

Fourth, we talk about a regionally thriving economy. Where we believe in a new and comprehensive approach to scaling-up economic clusters ─ on everything from advanced manufacturing to hydrogen power to financial services ─ in our regions and nations.

That is the only way to ensure that Levelling Up is about more than the infrastructure of a place. It’s about new jobs, new industries, new skills. It’s also a strategy to make sure every region and nation can build on their unique strengths. To be world famous for something.

And it’s an opportunity that for some reason we’ve never really, fully grasped in the UK. Well, now we want to write the playbook on how every part of the UK can thrive.

 

Fifth, we talk about an inclusive economy. Where companies are best placed to ensure that all talent can progress. Giving more people, regardless of their background or circumstance, the shot at the life you can only get through work.

We set out how to tackle the UK’s skills shortages, by helping people move more easily between jobs where skills align. And we’ve identified how those firms whose industries are changing rapidly, can gain valuable ground by helping their employees to reskill and retrain.

 

Finally, we talk about a healthier nation. Because, above all else, this year has reinforced just how much difference employers can make to people’s lives; by supporting health and wellbeing.

And, in our work, we lay out how existing health interventions from employers – such as help to deal with back or muscular problems; or of course mental health support – can reduce sick days by almost a third, as well decrease the UK’s overall disease burden.

All this while making good health and wellness a growth industry – from vaccines, to genomics, to better nutrition and wellness businesses.

What's in it for you?

So, there it is. A six-part plan for the whole nation.

But what does it mean for you – businesses large and small across the UK? Well, on the face of it, you might think that only some firms can benefit. Those in certain sectors or those with the most resources. And yes, we have identified some valuable opportunities for specific firms and sectors. But we also see prizes for everyone.

If you’re a small business owner, hit by short-term cash concerns and COVID debt. Struggling to adjust to the costs and red tape of trading with the EU now. Or how to keep pace with technological change.

Well, across the decade, you can be supported to export more products and services and sell to more places. By adopting current and new technologies, you could improve both customer experience and financial performance.

While investment to support your employees’ skills, health and wellbeing can help you attract and keep talented people. Reducing absences and increasing job satisfaction.

Now, if you’re a retailer – emerging from probably one of the toughest years, you’ve ever experienced. Dealing with the cash flow pressures of low margins and punitive business rates.

Worried about the future of the high street, and the seemingly irreversible move of consumers online.

Well, the race to net-zero could help you compete. Green credentials increasingly appeal to customers and talent alike.

Burnished through sustainable products, services and packaging, as well as more energy-efficient stores and decarbonised fleets. And offer a vital chance to achieve long-term cost savings.

You could also lead on levelling up – helping the local towns and high streets you serve to thrive as part of serious local prosperity strategies.

Or if you work in construction, a sector under incredible margin pressure; net-zero probably feels like a mountain to climb right now – with many of the sustainable materials and processes required, still being developed.

But digital transformation in the sector – with the adoption of AI, Digital Twins, and other tech – could help boost efficiency and productivity. And new inclusion strategies can help you recruit and train diverse talent.

At the same time, the UK’s decarbonisation of buildings can generate demand for specialised construction work and build expertise that’s then ripe for exporting.

Society

But these prizes aren’t just for business.

We have deliberately set out a strategy that delivers social progress too.

You know, business with purpose is a journey that’s been underway for years now. Our workforce demands better of us. Our customers judge us by the values we keep. And our investors assess us through ESG frameworks that are now the norm.

But the pandemic has demonstrated two new facets of business that I – that we – are extremely proud of.

The first is our humanity. As employers, we have done everything we could to put the physical and mental health of employees first.

The second is our role as problem solvers – in service of the nation. Food on the shelves, logistics to keep the country running, ventilators and, of course, vaccines. There will always be critics who feel that business is a barrier to better social outcomes. But we have just seen how business is uniquely well placed to solve social problems.

So, this strategy is for everyone.

If you’re someone frustrated by a lack of opportunities in your local area. Who feels right now that the system isn’t working for you. We hear you, and we want to put it right.

A future with vibrant world-class clusters in every region could mean better jobs, closer to home. With new flexible and hybrid working arrangements offered by more and more companies making your location actually less of an issue.

If you’re someone who doesn’t have the skills you need for the way the world of work is changing. As your industry evolves, you’ll be able to get the training and support you need to keep pace. Or benefit from the world getting smarter about transferable skills.

If you feel like your background and circumstances are holding you back at work, or you need help with your physical or mental health. You’ll be able to count on a workplace that will assist you to get to where you want to go. With support to help you develop your skills and maintain your health and wellbeing.

Because transforming our economy also means now transforming the relationship between employer and employee.

Work is a place where people get in and on in life. Get jobs, then promotions; get skills to succeed; get job satisfaction and greater resilience. And you know when we do it well, get purpose and joy too.

I say to employers everywhere – we did the right things by our workforce in the crisis. And consequently, the surveys show that trust in business went up. Let’s bottle that. Let it be one of the positive legacies of the past year.

Can we pull it off? 

So, my main message for business today is, this is the work we need to do together now. We can’t put it all on government.

Only business can create jobs and opportunities for people. Only business can realise the prizes we set out in this strategy today.

And, you know, it’s happening already.

Take Blaenavon, in Wales. A former ironworkers’ community. Where the work of GOS Tool & Engineering Services helps support hundreds of jobs across the region. And the GOS team is collaborating with their local university to inspire the next generation of engineers.

Or Bolton, at Carrs Pasties, whose family owners brought in a specialist team of mental health experts, to help staff deal with the impacts of lockdown last March.

Or BT helping families access online lessons for free.

Or the Royal Mail who are installing efficiency-boosting tech to their thousands of vans to further cut emissions.

Or UK Greetings – in the gifting business – who launched a project last summer to revolutionise how they use their data. And they also invested in retraining and upskilling their employees – to make the most of these solutions.

All businesses who are already implementing the economy we describe in our report, right now.

The role of government

But of course, government’s role in enabling this future economy is fundamental. The UK Government has made a great start with its Plan for growth. But we’ve identified a few new interventions that will really turbo charge the recovery.

First, regulatory reform. Requiring all economic regulators to prioritise investment, innovation and agility as part of their core remits. Amazingly, it’s not a core part of their remit today. And it’s vital to unlock many of the prizes we describe.

Second, globally leading clusters in our regions and nations.

We ask the government to back the CBI to scale up economic clusters across the UK – starting by forging with us local and national coalitions of businesspeople, universities, colleges, catapults and officials.

Third, skills provision for tomorrow’s economy. Making skills far more tailored to real need; and freeing up money trapped in the Apprenticeship Levy so business can invest in everyone’s lifelong learning.

Fourth, we need finance for all this growth. And we need to know how much and what for.

So, we want to create a true Strategic Dialogue on Funding our Future. Co-chaired by the Treasury, Bank of England, and the CBI, bringing together the whole value chain, from hungry investees to institutional investors; to get real about the public and private sector investment we need to do this and how that’s going to happen.

And, finally, a long-term plan for taxation. Setting out how the tax system will restore public finances consistent with support for business investment, our net-zero transition and the UK’s international competitiveness.

Role of the CBI

You know, it seems obvious to say it, but government and business must embark together on a better decade.

And all of this means that the CBI will do things differently in the future too. We will seize the moment to play a far more proactive role.

Changing from being an advocate of change to an agent for change as well. Whether on decarbonisation, diversity or levelling up, we will work in pursuit of these opportunities.

Dialling up our practical support and guidance to help all businesses. And we will be a magnet for expertise outside our own, partnering with any of you, any organisation – across government and civil society – committed to realising this national transformation.

Conclusion: This is our chance

So, that’s our strategy. That’s our plan.

To make the UK the most competitive, dynamic and future-focused economy in the world. Where business is at the heart of social progress, working in service of the nation.

You will hear it a lot from us. Not just this week, not just this year, but for the five years to come.

We are signing people up. We want every business in the UK to get involved. It was inevitable that I would say this – visit cbi.org.uk/seizethemoment to see how.

We are talking to everyone. I am delighted to have shared the plan with the Prime Minister, the Chancellor, the Business Secretary. I’ve talked to the Opposition and leaders of the devolved nations. And I’ve talked to the heads of other business organisations and the TUC. I’ve even talked to my next-door neighbours. In fact, I talk about nothing else.

This year – 2021 – there is a rare unity of purpose in my view across politics, business, trade unions and civil society. Yes, we may disagree on some of the detail but not on the need to align around this vision and these principles.

I know we have much to worry about in the short run. The COVID-19 crisis is far from over. Many firms have a lot of debt and uncertainty about the future.

But we know from crises that new realities are shaped.

Successfully in 1945. And less so in 2008.

What of 2021? Let’s transform our economy. Let’s start right now. Let’s Seize the Moment.