Strong supply chains could boost economy by £30bn: CBI

Targeted action to revitalise domestic supply chains could inject £30 billion into the economy by 2025, creating more than half a million jobs across the United Kingdom, according to a new CBI report.

Pulling Together recommends ways to kick start the UK’s supply chains, and solutions to reinvigorate Britain’s industrial strategy. Based on new research carried out by A.T. Kearney, the global management consultancy firm, the report reveals underinvestment in research and development (R&D), a growing skills crisis and weakened foundation industries that are key to advanced manufacturing – such as plastics, metals and chemicals.

To tackle these issues, the CBI is urging the Government and business to act together to strengthen supply chains, focusing on innovation, better quality products, and excellent customer service.


Among the measures the UK’s leading business group is calling for are:

• Setting a long-term target for public and private sector spending on R&D to rise to 3% of GDP
• Widening the R&D tax credit to support the later stages of the commercialisation and manufacture of innovative British products
• Doubling spending on the UK’s innovation agency, Innovate UK, over the course of the next parliament
• Financially incentivising science, technology, engineering and mathematics (STEM) degrees, and ensuring more graduates take up jobs in these sectors
• Creating a national materials strategy, as part of our industrial strategy, to protect and enhance critical supply chain sub-sectors.

Katja Hall, CBI Deputy Director-General, said: “The molten metals of manufacturing have long coursed through the veins of our economy. Optimism within industry is now rising at a strong rate, and investment intentions are on the up.

“But it’s time for some fresh thinking. We need to see a bold strategy that breathes new life into our supply chains, and makes the UK the destination of choice for manufacturing high value products. This could provide a £30bn boost to the economy, and create half a million extra jobs.

“The scale of the challenge is sizeable – our competitors are powering ahead, with France outstripping our research & development (R&D) investment by 40%. At the same time, only 3% of our graduates end up in engineering or technology jobs.

“We need policies which focus on creating long-term value – from increasing R&D spending to establishing a UK-wide materials strategy – to enable industry to play to its strengths and compete effectively on the world stage.

Responding to the findings, Business Secretary Vince Cable said: “Our industrial strategy is delivering the long-term thinking on supply chains, skills and innovation that firms need to grow. We are supporting the creation of thousands of new jobs by working in partnership with industry in key areas, including a record £60 billion turnover in our thriving automotive sector, £2 billion investment in life sciences and a growing offshore wind supply chain boosted by Siemens’ huge investment in Hull.

“Industrial policy isn’t a short-term fix and we’ve established enduring partnerships with businesses and the CBI to build on this progress and lock in sustainable growth.”