Firms must 'step up and adapt' not 'hunker down and wait' to compete in tech-first global economy - CBI President

• Call to ‘super-charge’ UK’s tech sector by matching US plans to create ‘decacorns’ – firms that scale to £10 billion.
• Only 1 in 5 SME’s have high levels of digital tech adaptation, despite such use of technology adding £216bn to the UK economy.
• Making more businesses technologically enabled would add £45bn to the UK economy by 2030.
• Regional industrial clusters can form the basis of this success by fuelling innovation between business and universities.

In his first major speech as CBI President, Brian McBride said businesses must scale up, build innovative UK and global partnerships, and embrace new digital and tech skills for employees in a changing economy.

Addressing business leaders at the Vox Conference Centre in Birmingham, McBride said thriving companies would be the ones to ‘step up and adapt’ – not those that ‘hunker down and wait’ for opportunities.

To ‘power up’ start up and scale up firms, McBride launched a new campaign to highlight the importance of scale ups to the UK economy, remove barriers and find smart solutions to boost their success.

On powering up start-up and scale-ups for growth, CBI President Brian McBride said:

“Right now, we’re a magnet for tech investment – globally we’re second only to the US. That’s helped make the UK one of only three countries, alongside the US and China, with over a hundred $1bn unicorn companies.

“Start-ups and scale-ups are the keystone of the UK tech sector, which is now valued at over $1trn and employs more than 1.6 million people. So, supercharging their success is one of the clearest ways of powering ahead.

“In the US they are already creating a new generation – ‘decacorns’, businesses that scale to $10bn in value. But at the CBI, we believe the UK can step up and match that. We want to knock down the blockers holding them back and find smart solutions to boost their success.”

On building partnerships to make our tech sector – and our economy – greater than the sum of their parts, McBride said:  

“We already have powerful examples of the kind of partnerships we need in our economic clusters across the regions and nations of the UK. Because tech is a national success story, built on regional collaboration.

“There are huge prizes to be had from fostering more collaboration between business and universities – as well as innovation centres. To grasp that potential and encourage more of the partnerships we need, the CBI is working with members including BT, Intel, Airbus and Raytheon to launch a second demonstrator cluster, called Cyber Tech West.

“We need a culture that fosters firms to learn from each other’s innovations. And that encourages partnerships between big firms and small – locally, nationally, and also globally. Because in an ever more connected and complex world, to stay ahead of the curve we must work and partner with the best international innovators.

“Our clearest and easiest opportunities here are still just across the Channel in the EU. But we still can’t seize all of the opportunities from our trade deal – in areas like Horizon Europe - because of the impasse on the Northern Ireland Protocol. We need flexibility from both sides so we can unblock those untapped prizes in tech, research and innovation.”

On getting people and firms across the UK involved in the future economy, McBride said:  

“There’s no doubt the biggest blocker to business is labour and skills shortages. Wherever I’ve met members around the country, their greatest worry is that they can’t get the people and skills they need.

“The reality is the UK has an ageing society and one of the legacies of the pandemic is a sharp rise in inactivity among older workers, with tens of thousands of people retiring early – and record numbers reporting chronic ill-health. We also have one of the biggest skills mismatches in the G7.

“In the short-term, Government can help firms by delivering the new Shortage Occupation List. It could also empower the Migration Advisory Committee to diagnose shortages in lower-skilled roles. On skills, we need to transform the Apprenticeship Levy into a Challenge Fund that allows employers to spend their budgets on the skills they need.”

On the vital importance of tech adoption to the future of the UK economy, McBride said:

“We’ve got to adapt to the reality that we won’t be able to rely on employment growth for economic growth. Firms will need to find other ways to drive productivity and that’s where tech adoption comes in. Business tech adoption is a big economic booster.

“But despite an uptick during the pandemic just one in five UK firms now have ‘high’ digital tech adoption compared to nearly two in five in the Netherlands and half of Danish firms. Closing that gap and getting more businesses tech enabled promises big prizes.

“I don’t just want to talk about getting businesses participating in the future economy though, but everyone in every part of the UK. And that’s about connectivity – one of the basics we need to get ahead – and that’s what we’re pushing the Government on.”