CBI Chief Executive - Building Societies Association speech

SPENDING REVIEW MUST BACK PIONEERING TECH ADOPTION PROGRAMME TO UNLOCK GROWTH, SAYS CBI CEO

In a speech to the Building Societies Association (BSA) (Wednesday 07 May), CBI Chief Executive Rain Newton-Smith will praise the valued role building societies play in local communities. She will say “Building societies and mutuals, all of you here today, are the true pillars of thousands of high streets and communities, up and down the UK. The definition of business as a force for good.”

Speaking in Birmingham – the birthplace of the UK’s first building society – Newton-Smith will highlight how mutuals have supported their members through 250 years of change, through pandemics, depressions and world wars.

Amid global uncertainty, Newton-Smith will acknowledge the current challenges facing business and government:  

She will argue that once again business finds itself on the frontlines of national economic challenges – “We have long talked of winds of change blowing through technology, politics, our economy. But today they have whipped up a hurricane. In the last few weeks, the tide of globalisation, which over decades has lifted millions out of poverty, forged life-saving medicines, brought us – literally – out of the dark… has been turned on its head. The world order of politics and trade… has been upended.”

“The IMF has said US tariffs represent a ‘major negative shock’ for the world economy. Goldman Sachs and JP Morgan predict a 45 per cent and 60 per cent risk of a US recession – with all that means for the global economy. US GDP for Q1 has already fallen as a forewarning. And in the UK our already meagre growth forecast, has been cut from 1.6 to just 1.1 per cent.”

Newton-Smith will use her speech to urge bold national action to harness technology and innovation to tackle economic uncertainty and boost growth:

Drawing upon the powerful historical parallel to 1775, when Richard Ketley founded the first building society in Birmingham during an era of massive disruption and a revolution in technology, she will warn that escalating business costs and financial pressures mean the UK is falling behind its global competitors.

“Despite our world-beating universities, pushing the bounds of quantum and AI.  Despite having the highest number of quantum tech start-ups in Europe. Despite having the third-largest tech ecosystem in the world. When it comes to the fruits of that technology – the productivity gains, we are not leading, we are lacking.”

Newton-Smith will call on government to launch a National Tech Adoption Plan – building on the success of the Made Smarter programme:

“As we approach the Spending Review, we know the constraints, the cramped fiscal headroom that squeezes every decision.  But I think – the CBI thinks – there is a way.  It’s a policy that’s already out there. It was set up in 2019 in the North West of England.

“It’s called Made Smarter, and it is giving manufacturers government-funded advice and support to adopt tech, power growth and put them on the world stage. I’ve spoken to a lot of the businesses involved, and I can tell you it’s working.

“Right now Made Smarter is delivering £8 for every £1 of government money. Imagine that in every sector. For building societies, it’s about helping you build the branch of the future. Support vulnerable customers. Expand apps and digital tech. Attract new markets. New customers. Doing that right across the economy.

“Our research shows just 25 per cent of small business adopting new tech could add £45 billion to the economy by 2030.”

Newton-Smith will illustrate how Made Smarter has been a game-changer for business, unlocking productivity and major gains for:

“An aerospace manufacturer using Digital Twins tech to massively expand production. 

“A household cleaning company using real-time monitoring and analytics to boost productivity 20 per cent.  

“A door and window maker using new software to raise and add £1m to the local economy.  

“The numbers speak for themselves. An initial government investment of £6.4 million unlocked private investment of over £22 million. Now all told, it’s set to add over £242 million to the local economy and create over 1,500 jobs. No wonder the government is expanding it across the UK. Manufacturing is only part of our economy so we need to expand this now to all sectors.”

Newton-Smith stresses that only by backing business to innovate can the UK raise living standards and secure long-term prosperity:

“Looking around us, we cannot underestimate the scale of change in our world today. And the impacts on our economy and our people. I know that’s something building societies and mutuals, who do so much to support your communities, understand.  

“At the same time, as we muster our economy for the growth to change the fortunes of our people and our country, we can remember that business has faced upheaval before, and we can learn the lessons. We can learn that you do not withstand change by standing still. That when times change, you must change with them.

“As Ketley showed us 250 years ago, sometimes, when the going gets tough, you’ve just got to slam your jug down on the table – and get innovating.”