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UK Economic Context & Growth Opportunities - The Structural & Investment Funds challenge - 17 May 2013.

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Presentation on theme: "UK Economic Context & Growth Opportunities - The Structural & Investment Funds challenge - 17 May 2013."— Presentation transcript:

1 UK Economic Context & Growth Opportunities - The Structural & Investment Funds challenge - 17 May 2013

2 2 Why we need to act UK Industrial Strategy Implications for places Structure Progress to date

3 3 No return to the old growth model Previous growth model based on government spending, consumption and property speculation Contribution to GDP from Government activity grew from 0.3% between 1990- 99 to 0.7% between 1999- 2008 – becoming the second most important driver of growth A stable macro business environment is key to enabling growth The deficit means Government spending cannot contribute to growth to the same degree Why we need to act Source: Office for Budget Responsibility Economic and Fiscal forecasts March 2013

4 4 UK’s relative position is under threat Globalisation and rise of BRICS are changing UK’s relative position in global economy Developing countries are competing higher up the value chain, threatening the UK’s traditional comparative advantage If the UK stands still there is a danger we will be left behind Why we need to act

5 Rising to the challenge: UK Industrial strategy - government and industry in partnership - Industrial Strategy

6 6 Strategic partnerships – the sectors Industrial Strategy Published Aerospace (March 2013) Aim: Maintain existing UK market share; secure UK employment Nuclear (March 2013) Aim: Increase inward investment in energy supply chain Spring 2013Summer 2013 Life Science Strategy (Dec 2011) Life Science Strategy one-year-on (Dec 2012) Information Economy Aim: Optimise ICT use by business Agri-tech Aim: Developing and exporting innovative technologies e.g. in food security Education Aim: Grow UK education exports Offshore wind Aim: Increase inward investment in energy supply chain Oil and Gas (March 2013) Aim: Increase inward investment in energy supply chain Automotive Aim: Repatriate supply chain and exploit low carbon technologies Construction Aim: Improve competitiveness and productivity to support increasing exports Professional Business Services Aim: Export opportunities in developing economies

7 Progress Sectors  Publication of Sector Strategies o Aerospace “Reach for the skies” - £1bn to fund Aerospace Technology Institute; match funded by industry“Reach for the skies” o Nuclear “The UK’s Nuclear Future” – £15m for new National Nuclear Users Facility“The UK’s Nuclear Future” o Oil and Gas “Business and Government Action Plan” - measures to boost supply chains and tackle engineering skills gap“Business and Government Action Plan”  £500m to support other key industrial strategy sectors in Budget 2013 Life Sciences: commitment to sequence the whole genome of 100,000 NHS patientsLife Sciences £125m invested in supply chains to encourage advanced manufacturing investmentadvanced manufacturing Progress to date First strategy update for the Business Bank; launching £300m investment schemestrategy update Funding for Lending scheme is encouraging the banks to lend more - if it can mobilize the projected £60-£80bnFunding for Lending scheme UK Green Investment Bank operational since October 2012 - funded with £3bnGreen Investment Bank Access to Finance Procurement Publishing £84bn of Procurement pipelinesProcurement pipelines Addressing strategic capabilities, e.g. tunnellingstrategic capabilities

8 8 Progress Employer Ownership Pilot gives employers direct access to public investment for training through a competitive fundEmployer Ownership Pilot o£90m of funding to support 37 projects in the first tranche; more than matched by £115m of employer contributions oSecond round closes 28 March 2013; prioritising industrial strategy sectors 'Rigour and Responsiveness in Skills‘; action plan to update skills priorities, April 2013'Rigour and Responsiveness in Skills‘ Skills Progress to date Technologies Seven Catapult Technology and Innovation CentresCatapult Technology and Innovation Centres oHigh Value Manufacturing, Cell Therapy, Offshore Renewable Energy, Satellite Applications are open oConnected Digital Economy, Future Cities and Transport Systems open by June 2013 Support for “eight great technologies”eight great technologies o£600m funding in Autumn Statement 2012 Patent Box introduced progressively from April 2013 will provide reduced corporation tax rate of 10% for companies exploiting patented inventionsPatent Box Regenerativ e Medicine Agri- science Energy storage Robotics Big data Synthetic biology Advanced materials and nanotechnology Space technology

9 Implications for places & LEPs Represents an opportunity – and a challenge for LEPs Important to recognise and build on their comparative strengths to build successful economic development propositions Look at all the levers available – EU Structural & Investment Funds + Single Local Growth Fund, UKTI, EZs, RGF, transport funds, etc Mapping sector and technology priorities What else would be helpful?

10 Sir Andrew Witty’s Review of Universities and Growth In response to the Heseltine Review, the Government invited Sir Andrew Witty to lead a review to explore how universities can work with Local Enterprise Partnerships (LEPs) and other local organisations to support growth. The review has a focus on research relevant to sectors and technologies in the industrial strategy, but it also recognises the wider role of universities in supporting local growth. A short consultation period is currently open, and is due to conclude on May 31 st ; the Review is keen to engage with LEPs and other local actors and views are welcomed. Preliminary findings will be released in June; the Review will report in full in September.

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