CBI Annual Conference 2022: President Brian McBride's keynote speech in full

Thank you Syma, and good morning, everyone. Welcome to Day Two. As many of you know, this is my first conference as CBI President. 

And I want to start by echoing Syma and thanking our strategic partners, Accenture and Hays – as well as our corporate partners Phoenix Group, Related Argent, Shell and Visa. 

We’ve got a great programme for you today, starting with the Leader of the Opposition, Keir Starmer, MP. 

And we’re delighted to have him with us. 

I know from talking with Rachel Reeves and others at the Labour Party Conference, Keir’s leading a party that’s serious about business and serious about the sustainable growth this country needs. 

We’re all looking forward to hearing what he has to say. 

But before that, I want to share a few of my own reflections – building on Tony’s speech yesterday and what we heard from the Prime Minister. 

So, I’ve been President of the CBI for five months now, which in recent UK politics feels more like five years.

Working in tech, I’m used to disruptors and disruptions, but this has been a bit wild even for me. 

I took the job here because I believe in the CBI agenda, and that my experience working with companies big and small, multinational and local, could help.

Throughout my career, I’ve also seen the difference that business and government can make when they work together – for the benefit of all. 

So, in my first few months at the CBI, I’ve been criss-crossing the country, putting that insight and experience to use, meeting members from Bristol to Glasgow to Scunthorpe.

I’ve been talking to you, about your needs and the issues keeping you up at night; rising costs, labour and skills shortages, political instability. 

And the Prime Minister and Chancellor deserve credit for focusing the fiscal statement last week on protecting the most vulnerable and delivering stability.  

Because we must reassure markets and secure stability – to lay the groundwork for growth. 

Whatever has been said in recent weeks, growth is still the best answer to the problems of businesses and households. 

It’s also how we adapt to a fast-changing world. 

Because the truth is, the world won’t wait for the UK to get through this. 

Whether we like it or not, there are big shifts happening on the global stage and a future economy emerging. 

It’s defined by the impacts of climate change and the race to net zero, by geopolitical and demographic change, and perhaps most of all, by accelerating technological change. 

And it was good to see the Prime Minister focus his speech yesterday on putting innovation at the heart of the UK economy. 

And we’re keen to work with the government on that, particularly his request for ideas about innovation-focused regulation.

That agility’s so important. 

Because I can tell you: what I’ve seen in my career in tech, again and again, is when you’re faced with change of that pace and scale, it’s not enough to hunker down and wait. 

It’s the firms that step up and adapt that survive – and thrive.

And that’s just as true for the UK. 

The changes happening around us challenge our economy, but they also create opportunities for us to reach for growth.

So, what I want to talk about this morning is how I believe the UK can get ahead of the curve and grasp those opportunities. 

I think it will take three things.

One – powering up our start-ups and scale-ups. 

Two – building partnerships across the country and around the world to boost UK tech and innovation.

And three – increasing participation, to get more people and more firms involved in the future economy.

POWERING OUR START-UPS

So, first – powering up our start-ups and scale-ups for growth. 

Right now, we’re a magnet for tech investment. 

Globally, we’re second only to the US, and our tech start-ups drew a record $11.3bn in Q1 of this year alone.  

That’s helped make the UK one of only three countries, alongside the US and China, with over a hundred $1bn unicorn companies. 

Start-ups and scale-ups are the keystone of the UK tech sector, which is now valued at over $1trn.

So, supercharging their success is one of the clearest ways of powering ahead.

The good news is there are already investors champing at the bit to do just that. 

The bar is being raised, however.

In the US they are already creating a new generation – ‘decacorns’, businesses that scale to $10bn in value. 

But at the CBI, we believe the UK can step up and match that. 

So, we’re launching a campaign – to shine a light on the importance of scale-ups to the UK economy, to knock down the blockers holding them back and to find smart solutions to boost their success.  

BUILDING PARTNERSHIPS IN THE UK AND BEYOND

And we can use that success to spark more innovation and growth.

We do that through the second point – building partnerships to make our tech sector – and our economy – greater than the sum of their parts. 

We already have powerful examples of the kind of partnerships we need in our economic clusters across the regions and nations of the UK. 

Because tech is a national success story, built on regional collaboration.  

Take the Humber industrial cluster. It’s one of the biggest decarbonisation opportunities anywhere in the world. 

Where partnership between businesses has already led to £15bn of new investment being pledged for vital green projects.  

I visited there last week and was truly impressed with the energy, the enthusiasm and the drive of local business, local authorities and local universities working together. 

Or take the advanced engineering cluster at Motorsport Valley, arcing from Oxfordshire to here in Birmingham.  Adding over £9bn to the UK economy every year and leading in fields from Formula 1 to lightweight materials and medical devices, it’s built on powerful partnerships between business and universities.

And right across the country – in clusters and beyond - there are huge prizes to be had from fostering more collaboration between business, universities and innovation centres.

Using the great strength of UK R&D, which the Government bolstered with its welcome announcement yesterday of £484m of targeted investment.

And I can say today that to leverage the strength of UK research and build more of the partnerships we need, the CBI is working with businesses including BT, Intel, Airbus and Raytheon to launch a second demonstrator cluster, called Cyber Tech West. 

Based around Cheltenham and GCHQ, it will draw on the region’s technical and creative strength and drive collaboration between business, government and universities to forge a world-beating cyber security cluster. 

In groupings like this and across the UK, we need to create a culture where firms learn from each other’s innovations. 

And where there are partnerships between big firms and small – locally, nationally, and also globally.

Because in an evermore connected and complex world, to stay ahead of the curve, we must work and partner with the best international innovators.  

Our clearest and easiest opportunities are still just across the Channel in the EU. 

There are more big opportunities from our trade deal and from existing frameworks like Horizon Europe.

But as Tony mentioned yesterday, we still can’t grasp them because of the impasse on the Northern Ireland Protocol.

So it’s time to put economic stability before politics. 

It’s time for flexibility from both sides, so we can restore confidence to the markets and unblock those untapped prizes in tech, research and innovation.

GETTING EVERYONE INVOLVED IN THE FUTURE ECONOMY

Then to make the most of those opportunities, we need to get people and firms across the UK involved in the future economy. 

That’s the third and final way we can adapt to thrive. 

And on this, there’s no doubt the biggest blocker to business is labour and skills shortages.

Wherever I’ve met members around the country, their greatest worry is that they can’t get the people and skills they need. 

Just in the three months to September, employment dropped by 52,000 from the last quarter.

And the shortages aren’t just in digital and AI, it’s all areas, from butchers to baggage handlers, from hospitality to healthcare. 

Now, that’s partly driven by recent events – Brexit and the pandemic. 

But it’s also a structural challenge. 

Because the reality is the UK has an ageing society, and one of the legacies of the pandemic is a sharp rise in inactivity among older workers, with tens of thousands retiring early – and record numbers reporting chronic ill-health.  

We also have one of the biggest skills mismatches in the G7. 

CBI analysis shows 90% of the current UK workforce will need to add to their skills by 2030. 

So… how do we tackle these challenges – and unblock business?

Well, in the short-term, Government can help firms by urgently delivering a new Shortage Occupations List. 

It can also empower the Migration Advisory Committee to diagnose shortages in lower-skilled roles.

Then in the medium term, Government can help by transforming the Apprenticeship Levy into a Skills Challenge Fund which allows employers to spend their budgets on the skills they need.  

That includes digital – where closing the skills gap could drive a £150bn economic boost by 2030. 

Another medium-term priority is tackling economic inactivity. 

Government can help here by incentivising employer-led interventions for common health issues like back, joint and muscle injuries and mental health challenges.

To support this, last week the CBI launched our new Work Health Index, delivered with the NHS, Government and Business For Health.

And you’ll be hearing more about that in our panel discussion later this morning. 

But, as we discussed yesterday, looking to the long term, the UK has got to adapt to the reality that we won’t be able to rely on employment growth for economic growth. 

Firms will need other ways to drive productivity - and that’s where tech adoption comes in.

The evidence is clear that business tech adoption is a big economic booster. 

For example, tech use by SMEs adds £216bn to the economy every year.

But despite an uptick in the pandemic, just one in five UK firms now have ‘high’ digital tech adoption compared to nearly two in five in the Netherlands and half in Denmark.

Closing that gap, and getting more businesses tech-enabled, promises big prizes.

We estimate getting more firms to adopt tried and tested tech, from cloud to CRM, could add £45bn to the UK economy by 2030, while AI diffusion could add £38bn.

One of the keys to reaching those prizes is helping business understand tech and the big trends coming down the track – from AI to quantum.

So, the CBI is launching a new B2B project called Demystifying Tech to help you understand how tech is transforming the UK economy.

Whether you want to share your expertise, or learn how tech trends could help your firm get ahead, I urge you to get involved.

I don’t just want to talk about getting businesses participating in the future economy though, but everyone in every part of the UK. 

And that’s about connectivity – one of the basics we need to get ahead.  

In the UK there are still 1.5 million households completely offline. Ccan you believe that?

Getting the UK from 8th to number one in the OECD Connectivity Index could unlock nearly £70bn by 2026.

So, we’re pushing Government on the steps they can take to improve connectivity, including the vital supply-side reforms to spark private investment across the UK, from access rights to procurement.

CONCLUSION

So, in summary – three areas where business and government must work together to push the UK ahead in a changing world. 

One – boosting our start-ups and scale-ups. 

Two – building partnerships across our economy and internationally. 

And three – getting more of our firms and our people engaged in the future economy.  

Now, I want to wrap up by saying – we all know these are difficult times, when fiscal constraints mean there aren’t easy answers – we can’t just turn on the taps.

But that simply means we’ve got to be smarter. 

The pace and scale of change around us creates bigger challenges but also bigger opportunities for those who are nimble and adaptable enough to reach them. 

And the CBI’s here to show the way to those prizes to help you step up to seize them and help the whole country get ahead and thrive in the future economy.

So – let’s get started. 

Thank you very much.