UK needs national programme to reset and recharge the economy

We need a programme that combines the scale needed to reset, rebuild and recharge our pandemic ravaged economy, says Margot James – Executive Chair of WMG at the University of Warwick, former Minister for Digital and The Creative Industries and businesswoman.

The Prime Minister’s announcement in Dudley last week of a £5bn infrastructure investment was welcome news. It represents a stimulus that will allow work on “shovel ready” projects to begin, helping to kickstart our nation’s recovery from Covid-19.

However, to be truly “Rooseveltian”, the Prime Minister’s speech should mark the first step in a wider recovery plan. We need a programme that combines the scale needed to reset, rebuild and recharge our pandemic ravaged economy with a clear focus on creating a greener, more connected economy that offers opportunity to people and businesses right across the country.

The building blocks of such a broad-based recovery are clear. We need a comprehensive skills programme to preserve jobs and offer young people opportunity, alongside innovation support and consumer incentives to ‘green’ our economy and rebuild local supply chains. It is encouraging that both Number 10 and the Treasury are alive to these issues, and we look forward to hearing more from the Chancellor on Wednesday’s ‘mini-budget’.

Crucially, these programmes must help ‘level up’ our national wealth by supporting regional growth. Despite strong private sector spending on innovation of £398 per head, the West Midlands has the lowest per capita public investment in R&D of all the nations and regions of the UK at just £83 per head.

In fact, 46 per cent of public investment in R&D is directed at London and the two regions that contain Oxford and Cambridge. It’s essential that the planned increase in public R&D investment to £22bn a year focuses on applied research in the Midlands and the North to close this gap and “crowd in” needed increases in business innovation.

We must also embrace the opportunity to do things differently. On the back of this crisis, we can truly assess how we live and work in the digital age, banishing the spectre of poor productivity that has long blighted our progress, and establish a truly 21stcentury innovation and skills led economy.

Since April, I have served as the Executive Chair of the WMG at the University of Warwick, where we apply the power of academic innovation to support business growth. We do this through offering business quality education programmes to develop the skills of apprentices and employees, and by building business partnerships to conduct research on everything from the lightweight materials and battery science needed to decarbonise the economy to the digital healthcare smart devices that will transform our NHS.

One of the greatest strengths we have as a group, is that we are based in the West Midlands – the engine room of the UK economy, driving progress since the Industrial Revolution, fostering innovation and preparing our young population for the future.

I have worked closely with the Mayor of the West Midlands, Andy Street and the West Midlands Combined Authority throughout this crisis. I was proud to be involved in the development of their ambitious package of projects to help recharge the region’s economy, on the back of the Covid 19 induced recession.

Their £3.2bn proposal sets out a series of investment cases to Government, for their immediate consideration ahead of the emergency “mini-Budget” on Wednesday. Their prospectus, titled “Recharging the West Midlands”, deserves to act as a standard bearer for the recovery north of London.

One notable element of the West Midlands recovery plan is Project GREAT. This calls for £65m of investment in an innovative programme to support automotive and aerospace companies to keep their highly skilled staff working in strategically important R&D activities.

In addition to this, the WMCA would also establish the £20m UK Mobility Data Institute (UKMDI) as an open source, open access research institute to aggregate and analyse the large volume of data being generated by projects related to smart mobility. A truly innovative proposal, fit for the digital age.

Securing and extending our innovation capacity with these projects will help West Midlands get working to green the economy and create a smart, safe, transport network.

By backing innovation and future growth, we would safeguard or create thousands of jobs across the UK and retain invaluable R&D capability in the manufacturing sector. We believe this would see an increase of almost £1bn in economic activity nationwide, truly demonstrating the national reach of the WMCA prospectus.

As often happens in the aftermath of crises, we have an opportunity reset, rebuild and recharge our economy, making it greener, more connected and more productive. The West Midlands has long been the engine room of British industry. We must seize the chance to take that proud heritage of industry and innovation and apply our hard won talents to meet the challenges of the future.

Margot James is Executive Chair of WMG at the University of Warwick and former Minister for Digital and the Creative Industries and businesswoman.