UK economic growth: Realising the innovation opportunity

Posted on 8 Mar 2023 by The Manufacturer

Tata Technologies’ expansion of its European Headquarters in Leamington Spa, creating 350 jobs, emphasises the UK’s role at the forefront of emerging technologies that are shaping the global economy. However, in order to fully realise this potential at a time of economic uncertainty, it’s vital that the government supports these strengths with more funding and carefully considered policies.

Britain finds itself in a period of economic hibernation. Forecasts suggest that, in a best-case scenario, we will narrowly avoid slipping into a recession this year and we are the only G7 economy expected to contract in 2023.

Yet despite this gloomy outlook, Tata Technologies – a global business that operates at the cutting edge of technological developments – is committing its future to the West Midlands, reinforcing that global high-value, high-tech firms are keen to capitalise on our region’s vast breadth of emerging technologies. The business’ establishment of new Centres of Excellence at the University of Warwick and University of Wolverhampton is also a reminder of the importance of the UK’s R&D strengths to restoring our economic position.

As we enter a once in a generation technological transformation across our industries, the UK has the potential to take a leading global role at the intersect between technology and manufacturing. This opportunity marries the West Midlands’ world-renowned industrial heritage with the UK’s fastest-growing tech hub. Once the birthplace of the industrial revolution, the West Midlands now has all the tools required to lead a global industry 4.0 evolution.

However, with the absence of an industrial strategy and clear vision for solving the productivity puzzle, the UK’s potential risks being held back. Car production, once the cornerstone of our manufacturing industry, is at its lowest level in 66 years. Unless we invest in repositioning ourselves around the innovation that is set to transform the industry, this decline could continue for decades to come.

This transformation opportunity is exemplified by the sector’s transition to an all-electric automotive future. The West Midlands is home to the greatest concentration of battery tech and electric engines businesses in the UK. At the European Innovation Development Centre, Tata Technologies is partnering with international automotive brands working at the frontier of engineering, design and development of new electric models.

Our existing ecosystem creates a unique opportunity to turn the West Midlands and UK’s industrial base into a leading international hub for industrial decarbonisation in mobility. As the government prepares for the Spring Budget, it is essential these regional strengths are fully recognised, along with the valuable role they can play in restoring the UK’s global competitiveness.

We are currently in a race to secure our place in the supply chain for key industries, but we are being hindered by a disparity in funding and powers in comparison to our international competitors. The government’s carving up of BEIS into four new portfolios, including a new Department for Energy Security and Net Zero and a Department for Science, Innovation and Technology, will bring more focus and better-targeted resources. However, without adequate funding and collaboration with local authorities, these departments are going to fall short when it comes to levelling up the UK and enabling us to edge ahead of other markets.

There are now over $369bn in green subsidies in the USA. The EU has responded with its own Green Deal Industrial Plan, which includes up to €250bn of subsidies and a relaxation in EU state aid rules for renewables projects. The UK is yet to make a comparable offer.

Even the UK’s devolved administrations, along with international competitors, have the powers, funds, and institutions to mobilise incentives to both attract and retain investment in ways that English regions do not. The Chancellor must deliver on the government’s promise for ‘trailblazer’ devolution deals that will provide the West Midlands with essential financial freedom to be able to decide how and where funds should be invested, to capitalise on our economic potential.

The UK is falling behind other leading global markets, but with a clear industrial policy and economic identity, rooted in our world-class strengths in innovation, it’s not too late to get back in the race. By homing in on our emerging technology capabilities and thinking more strategically about our comparative advantages over other nations, we can achieve regionally balanced economic growth while shaping the future of global industry.

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About the author

Neil Rami

Neil is Chief Executive of the West Midlands Growth Company. Supported by local authorities, universities and a wide range of regional businesses, the Growth Company was established in 2017 to create new jobs, expand existing businesses and attract new inward investment and visitors to the region.  Its plans are aligned to the ambitions set out in the West Midlands Combined Authority’s Strategic Economic Plan.​

Previously, Neil held similar economic development roles in Liverpool and Newcastle upon Tyne. He is a member of the British Tourism Industry Group and sits on the LandAid Midlands Board. He is also a non-executive director of Creative England.