CBI chief urges UK firms to step up, not hunker down

British businesses must “scale up, build innovative partnerships, and embrace new digital and tech skills for employees” to boost the UK economy, rather than “hunker down and wait” for opportunities.

That is the rallying cry of CBI president Brian McBride at the organisation’s annual conference in Birmingham, in which he revealed the CBI will be launching a campaign to highlight the importance of scale ups to the UK economy, remove barriers and find smart solutions to boost their success.

He 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 $1trillion 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.”

McBride is no stranger to building businesses either. He launched 3G in the UK as managing director of T-Mobile, led Amazon’s UK expansion here as CEO and took electrical retailer AO.com public as senior non-exec. He has also chaired online fashion retailer ASOS and is currently chair at Trainline.

In his maiden CBI speech, he went on to cite “powerful examples of the kind of partnerships we need in our economic clusters across the regions and nations of the UK”, maintaining that tech is a national success story, built on regional collaboration.

McBride added: “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.”

Bemoaning the fact the the UK cannot yet seize the opportunities from the EU trade deal – in areas like Horizon Europe – because of the impasse on the Northern Ireland Protocol, he called for “flexibility from both sides so we can unblock those untapped prizes in tech, research and innovation”.

However, McBride stressed that by far the biggest problem for businesses are labour and skills shortages.

He continued: “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, McBride said, the 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. But on skills, the UK needs to transform the Apprenticeship Levy into a Challenge Fund that allows employers to spend their budgets on the skills they need.

Even so, firms will need to find other ways to drive productivity and that is where tech adoption comes in. Business tech adoption is a big economic booster.

“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.”

McBride also highlighted the thorny issue of connectivity, quoting figures which show that 1.5 million UK households still do not have Internet access, meaning the UK is in eighth place in the OECD Connectivity Index.

He added: “Getting the UK into the top place could unlock about £70bn by 2026. So we are pushing the Government on the steps they can take to improve connectivity.

McBride concluded: “We all know these are difficult times where fiscal constraints mean there aren’t easy answers; we can’t just turn on the taps. But that simply means we have got to be smarter. The pace and scale of change around us, creates bigger challenges. But also bigger opportunities for those who are nimble and adaptable enough to reach them.

“The CBI is here to help you see the way to those prizes. To step up and seize them and help the whole country get ahead and thrive in the future economy. So, let’s get started.”