Bristol and Glasgow might seem unlikely candidates to help drive Britain into the financial promised land. But according to a new report, thanks to their expertise in (respectively) high-tech production and renewable energy, they’re spearheading a UK manufacturing revival – hence their inclusion in HSBC’s latest list of ‘super-cities’, which also includes Newcastle, Liverpool, Leeds, Brighton and London (natch). Vince Cable seems to be impressed, saying it’s ‘bright for the future of the British economy’. But if it’s going to happen, the Government may need to do more…
Given UK plc’s increasing reliance on the services sector over the last decade, HSBC’s suggestion that we’re about to return to an economy based on ‘Made in Britain’ seems surprising. But it insists its prediction is backed up by the experts: apparently, 62% of business leaders think the UK is due to see a return to ‘innovation and entrepreneurship’ (that’s up from 46% in 2009). And the industries leading the way will be decidedly high-tech: 68% said communications provide the best prospects for growth, while 65% plumped for biotech and 60% reckon its low-carbon industries. Other sectors mentioned by the report are prototyping, plastronics and advanced composites. Sounds like it may be time to dust off those physics textbooks…
However, this doesn’t signal a complete change of direction. As Lee Hopley, chief economist of manufacturing organisation EEF points out, many of these whizzy-sounding industries are just making use of the UK’s traditional skills base. Composites, for example, is about building on developments made by the aerospace industry, while lots of the work being done on low-carbon technologies is linked to the car industry. Which just goes to show how adaptable British businesses are proving to be.
Of course, that doesn’t mean it’s going to be easy. For a start, while manufacturing made up a fifth of the economy 10 years ago, it now accounts for just one-eighth. The Government insists that it’s doing as much as it can to encourage high-tech industries to flourish – for example, by building 10 new technology innovation centres and investing £1.4bn of Regional Growth Fund money into high-growth technology companies.
But financing may, as always, be the key. Recent figures revealed that the banks have so far failed to meet the lending targets set out by the Government as part of Project Merlin (particularly for small businesses). The Government made lots of noises about imposing further penalties if they don’t play ball, prompting squeals of resistance from the banks. But if it’s serious about helping high-potential businesses to grow, public money isn’t the only answer – it also needs lenders to be doing their bit. And as we’ve seen, that’s easier said than done.
- ps. Talking of high-tech industries, make sure you check out the feature on the future of the British space industry in our latest issue
- Image credit: JohnJobby/Flickr