“Britain has companies that sell samosas to the Indians, ice-cream to the Eskimos and clocks to the Swiss,” declared Adam Marshall of the British Chambers of Commerce, as evidence of the fact that this country has much to be proud of when it comes to our success in global markets.
But with a double-dip recession weighing us down, and economic growth seemingly still elusive, there is clearly more that needs to be done to rebalance the economy and make the UK an attractive place in which to invest. In an effort to determine exactly what can be done about this, and the extent to which government should be involved, Total Politics and Siemens brought together an array of politicians, experts and industry authorities for a discussion of our next steps in a challenging economic environment.

While there are obviously areas where the UK needs to improve, the approach from the outset was positive. “The UK is a good place to invest,” said Claire Jarvis, director of communications at Siemens UK, going on to cite the examples of the work her organisation is doing in Green Port Hull, and at Siemens’ new Centre for Cities [the Crystal] in London’s Royal Victoria Docks. However, she was at pains to highlight that the UK’s manufacturing environment is often far from simple to navigate: “Our factories in the UK have to be extremely productive if they’re going to compete, and that’s what they have to do – focus on added value,” she said.

The UK has too great a tendency to focus on our historical and geographic advantage, Marshall added. “We are attractive, but if we get complacent, we won’t stay that way... We need long-termism in our politics too.”

There are several areas in which this call for long-termism seems to have particular resonance. The first is infrastructure, which, the attendees seemed to agree, can have a powerful effect on attracting investment. Kwasi Kwarteng, the Conservative MP for Spelthorne and a member of the transport select committee, cited the example of aviation, saying: “We’re in the first double-dip recession for 40 years, and yet we’re still worried about building our first runway since 1946. It’s reflective of a wider resistance to commit to big projects.” Conservative MP David Rutley agreed, pointing out: “In China, they built 45 airports in five years.” Labour MP Jon Ashworth added: “I’m cynical – if there weren’t swing seats around Heathrow, I suspect we’d be more long-term about it.”

Another area of concern for the UK is skills, or rather the lack of young people choosing to go into STEM subjects and industry. Jarvis said: “We need to start looking at people at age 10, 11, 12, when they’re starting to think about their future.” Rutley echoed her concern, pointing out that only 5 to 10 per cent of the students at Manchester Business School, for example, are from Britain. And a lack of long-term thinking on skills policy won’t just cause difficulties in industry or business – Marshall indicated that one of Britain’s current predicaments with immigration is that, because of our skills shortage, we have to “backfill” by attracting expertise from abroad.

Part of the problem of attracting young people into these careers stems from the depiction by the media of business and industry. “With 30 years in business behind me, I’d say we could do a better job of exciting people about it,” said Roland Aurich, chief executive of Siemens UK. “The media is good at telling the negative, emotive story, and business is bad at hitting back with its own, more positive, version,” agreed Policy Exchange’s David Skelton. Projecting a more positive media image of business and industry was generally felt to be an important tool for attracting young incomers, although poor attitudes in the education system are also destructive, Marshall added. “In my experience, small businesses are desperate to go into schools and talk to pupils, but are banging their heads against closed doors. The education infrastructure just isn’t there to support them.”

Ultimately, it all comes back to government. Julie Elliott, Labour MP for Sunderland Central, said that she felt that “the government has a plan for where they are going, but we need a plan for interim”, worried that the economy in her own north-east constituency was going to slip back while the transition was made from Regional Development Agency to Local Enterprise Partnership, for instance. There was some disagreement over whether a broad industrial strategy would help, but it was felt overall that greater stability would help avoid the kind of uncertainty that can worry investors. The low-carbon and renewables sector was cited as an example.

James Meadway, senior economist at the New Economics Foundation, seemed to embody the spirit of the discussion when he said that these decisions must be informed by a strong idea about the kind of economy the UK wants to have. “The categorisations of manufacturing, services and so on aren’t necessary particularly helpful,” he explained, going on to cite the example of firms like Rolls-Royce, which add a lot of advisory and consultancy value to their manufacturing operations.

A stable investment climate, long-term thinking, and a more positive attitude to business and manufacturing will all be essential tools in the fight to return the UK economy to growth. But exactly what that economy will look like is still far from clear.

Tags: Issue 49, Siemens