Towards a more inclusive approach to growth
26 January 2017
With the long awaited Industrial Strategy green paper unveiled earlier this week, the government has begun to set out its plans for supporting business growth across industries and across the regions.
Improving productivity - the point where the debates on growth, living standards and economic growth converge - is understandably a key focus, both across and between the UK’s regions. For UK plc to be an economic success, all our regions need to be firing on all cylinders.
But how can we ensure that no place is left behind? And what’s the role of government (central and local) as well as business? This was the focus of an international conference we hosted this week with JRF exploring how cities can deliver inclusive growth.
It was inspiring to hear how cities in the UK and globally are addressing this challenge, particularly given the uncertainty of the current economic climate. From Louisville, Kentucky to Rotterdam to Bradford, cities are recognising the need to take a more inclusive approach to growth and shaping their strategies to reflect this.
Part of this requires us to recognise that growth is about more than GDP, and taking a citizen view which gives a different perspective on economic success. Our work on Good Growth for Cities (with Demos) looks at economic success through the eyes of the public and measures city performance on jobs, income and skills, as well as health, housing and work-life balance. These factors need to be balanced to create places where people want to live, work and prosper.
The spotlight is increasingly on city leaders to achieve inclusive growth. While the Prime Minister’s approach to industrial strategy is about government “not just stepping back, but stepping up”, business also has some stepping up to do. However, the audience at the conference at the start of the day was not sure and voted a resounding “no” when asked whether they were clear on the role of business in inclusive growth.
But as we set out in our submission to the RSA Inclusive Growth Commission, we believe the private sector has a critical role to play in enabling inclusive growth. PwC as a business is investing in a more inclusive approach. For instance, we’re proud of the strength of our regional business and are now using our regional network to reach out to the ‘cold spots’ identified by the Social Mobility Commission. We’ve also shaped our recruitment practices to ensure that we attract talent from across the board, for example investing in the number of apprenticeships we recruit and dropping UCAS requirements. And we’ve also reviewed our procurement spend to focus on ‘buying social’ and now buy goods or services from a total of 59 social enterprises, from video production, to cleaning, to chocolates. We’re starting to see the results, but we recognise we haven’t got all the answers and there is more to be done.
Of course, no one employer, school, university or council can solve the inclusive growth challenge on their own and it’s vital we work together on this. As our keynote speaker Bruce Katz set out, cities are networks bringing together the public and private sectors, and communities and citizens, and places need a mature ecosystem of local leadership that links up these networks. We all stand to benefit from local economic success, and we all need to make our contribution to achieving it.
Translating this from warm words into action is the challenge, particularly for business leaders under pressure to deliver today’s results. Yet at our Inclusive Growth Commission roundtable in December, employers around the table had no shortage of examples of how they were engaging on this agenda. Taking the issue of skills - an issue that is cited as one of the key concerns of CEOs in the UK and globally in our annual CEO survey and identified as one of the ten pillars in the Government’s Industrial strategy - businesses talked about their initiatives to reach out and engage with local schools. What they did feel, however, is that a lot more could be achieved if the engagement between schools and business was done on a more systematic and comprehensive basis. This is a challenge that will need to be addressed, not least to ensure that businesses have the talent and capabilities they need for their own future growth.
Closing the conference, Sir Charlie Mayfield set out the huge productivity gains that could be make by “tackling the long tail” of low productivity businesses, which span across small, medium and larger organisations, through taking a local approach. He outlined some of the ways that the Productivity Leadership Group were moving towards taking a more joined up approach to improving productivity, including challenging businesses to ask themselves “How good is your business really?”
With the final audience vote of the day giving a unanimous “yes” to the question of whether business had a role to play in inclusive growth, it’s clear that this is a question that the private sector needs to answer to ensure they play their part in delivering “an economy that works for everyone”.
PwC's submission to the RSA Inclusive Growth Commission is available to download here.