What follows after some initial comments from me is what I regard as being an interesting, useful and important Op Ed piece written by BAE Systems Chairman Sir Roger Carr published in ‘The Times’ earlier this week.
I republish the article (below) because the issue of ‘levelling up’ can no longer in my view be regarded as merely being seen as just another political project, slogan, gesture or promise but one that if we really are serious about achieving the underlying intentions and recognise the need, is one that as Sir Roger makes abundantly clear, business can and must play a key role.
As the largest defence manufacturing company in Britain and one that, together with a large and well-established supply chain that includes many SME’s supporting it, is already regionally based across the UK. Suffice to say here that BAE Systems is not only right behind the government’s ambition of reviving the national economy, of achieving a high wage, high skill, high growth economy, but that this is a company that is already playing an important part in the levelling-up agenda. But as Sir Roger Carr makes plain in his article, the levelling up agenda project, one that is increasingly being seen as being crucial to future UK success, cannot be achieved by government alone.
In the article, Sir Roger talks of ‘recognising the value of small businesses not only in its own [BAE Systems] supply chain, but also within the wider economy’. His point in regard to increasing interaction between large companies and what are defined as those in the small and medium sized enterprises (SME) category as being a catalyst for making huge strides in the desire to improve productivity and growth is extremely relevant. So too is the relevance of supporting smaller companies through the many difficulties that they face in achieving their own goals and ambitions such as financing and how to get involved in exporting through the provision of coaching and mentoring from larger companies.
As a flagship policy of government hopefully, assuming that it is not published over the next couple of weeks, we will see the mush delayed ‘Levelling Up White Paper’ published by the government in January. Better to get it absolutely right than to rush it out. The hope is that the White Paper will produce a range of credible ideas that can lead to a reduction in regional inequalities by encouraging investment and other incentives.
But while the government must play the lead role by ensuring that it is doing all that it can to motivate and incentivise investment in education, skills, connectivity, innovation, research and development and making sure that innovative ideas created by SME’s can have a route to success rather than being lost in the abyss, it is also up to business to play a large role in supporting the underlying ambition. If we do really want the levelling up agenda to succeed then, apart from financial incentives and creating a blueprint to achieve success, it cannot be left to Whitehall.
No one is implying that the route to achieving change and success through a levelling up agenda will be easy but it can quite definitely be done if we set it on solid foundations and have the necessary will to succeed.
Perhaps it may be that re-unification of Germany provides something of a precedent for what now needs to occur in the UK. The gap in respect of GDP between East and West Germany was to say the least, enormous and even after spending EUR2 trillion, a gap between east and west Germany still exists. But the point is that it is one that is tiny by comparison to that which existed thirty years ago.
Times Op Ed Piece Written by BAE Systems Chairman, Sir Roger Carr
As we recover from the depths of the pandemic, recent labour market data gives us reasons to be optimistic, showing the number of pay-rolled employees grew by 0.6 per cent in October compared with the previous month.
However, in the face of ongoing supply chain challenges, regional economic disparities and inflationary pressures, the need to lift the UK’s persistently poor productivity performance has never been more urgent.
This can only be achieved if government and businesses work together to strengthen regional economic clusters across the UK and deliver on the Government’s aspirations to ‘level up’ our nation.
According to research from the Centre for Cities, the British economy is £83 billion, or 4 per cent, smaller per year than it should be because of an imbalance of performance between the Greater South East and the rest of the country.
The government has a mandate to make the UK a fairer economic environment, bringing more opportunities and prosperity to under-invested regions through its levelling up agenda. While investments in regional infrastructure and funding to support SMEs across the country with new technologies and digital skills is essential, for government to succeed, big businesses also need to play their part.
By working with local education providers, sharing expertise and skills with the 5.5 million smaller businesses across the UK, as well as driving innovation and investing in their own people, big businesses can make a significant impact.
This is not just altruistic, it is essential. For BAE Systems, securing a talent pipeline and a healthy national supply chain is critical to the country’s defence and security needs. Last year alone, the company worked with more than 5,000 suppliers right across the UK, spending £3.8 billion and recruited more than 1,200 apprentices and graduates.
BAE Systems has seen at first-hand the benefits that a focus on regional economic clusters can achieve. In Barrow-in-Furness, Cumbria, where in 2020, 25 per cent of working-age people did not have five good GCSEs or equivalent, the business employs more than a quarter of the working population producing submarines for the Royal Navy. It also works with more than 100 suppliers in the region to help prosperity and with the Furness Academy and local primary schools to raise educational standards.
Recognising the value of small businesses, not only to its own supply chain, but to the wider economy, BAE Systems is a major supporter of Be the Business, a non-profit organisation, which through finance, coaching and mentoring helps smaller companies put the right strategies and processes in place to grow and develop and improve their productivity performance.
The impact can be transformational, turning a regional manufacturer into an international exporter or a start-up into a sustainable, long term business. In the last year, the organisation helped more than 5,700 small business leaders, delivering a productivity uplift of approximately £114 million in challenging times. Not every company will interact with an array of SMEs on a daily basis, but the knowledge and expertise that exists within the big business community is an invaluable asset as SMEs look to make significant strides to improving productivity and achieving growth.
Just as governments, campaign groups and businesses have come together to forge a shared path to tackle the climate crisis, business leaders in the UK need to adopt the same mindset in rebooting the economy.
To achieve the government’s ambition of a high wage, high skill, high growth economy, we need to work together to help every part of the UK achieve its full potential, producing the best goods and services supported by the highest quality skills. The revival of the UK economy is a shared goal and it’s one that we all – government and businesses, large and small – need to work towards together in lockstep if we are to deliver a fairer and more prosperous country.”
(Sir Roger Carr – Chairman BAE Systems – as published in the Times 6th December )
CHW (London – 8th December 2021)
Howard Wheeldon FRAeS
Wheeldon Strategic Advisory Ltd,
M: +44 7710 779785
Skype: chwheeldon
@AirSeaRescue