The Government’s new Industrial Strategy Green Paper is an important step forward for business. Through our Framework for Growth research, PwC has been exploring what businesses would want to see from the new industrial strategy and how it could help to deliver sustainable and inclusive ‘good growth’ for communities across our country.
Cutting edge manufacturing
Looking specifically at the Midlands, the new industrial strategy could help the region to cement its place at the cutting edge of advanced manufacturing in areas ranging from automotive and aerospace to clean energy and green tech, all of which have been identified as potential priority growth areas by the Government.
Birmingham and Coventry’s emergence as key centres for artificial intelligence and cybersecurity also stands the Midlands in good stead, boasting the types of innovation and growth clusters the industrial strategy is seeking to support. Similarly, clean energy development is gathering momentum, especially around Coventry and Warwickshire. The resulting developments in battery technology and hydrogen fuel cell research are supporting the region’s automotive transition toward electric and low-emission vehicles.
The power of financial and professional services
As both our Framework for Growth and UK Financial Services report and the Industrial Strategy Green Paper highlights, financial and related professional services firms have a critical role to play in helping the Midlands capitalise on these growth opportunities. This includes channelling lending and investment, while providing a key source of well-paid employment in their own right.
Research carried out by TheCityUK found that F&PS contributed £248bn to the UK economy in 2022. And with two-thirds of the 2.4 million people working in financial and related professional services based outside London, this contribution is as important to the regions and nations of the UK as the capital. It’s certainly fitting that the TheCityUK National Conference is coming to Birmingham in 2024, as the city is the second largest financial and related professional services centre in the UK (after London).
Maximising the potential
The big question is how to make the most of financial and related professional services’ contribution. Drawing on both PwC research and my conversations with business leaders from around the Midlands region, I believe there are three key ways that financial and related professional services can make the difference:
Open up access to global capital
Financial services firms are well-positioned to help businesses in the region scale up and access the funding that would enable them to adopt new technologies and modernise their operations. Key priorities include working closely with regional and national governments to structure and market investment opportunities. By carefully packaging these opportunities, the Midlands can attract more institutional investors, private equity and other financial partners. The results would not only accelerate growth in the Midlands industrial clusters by connecting local businesses with global capital markets, but also position the region as a prime destination for investment.
Guide businesses through uncertainty and disruption
Strategic advice from professional services firms can help to guide Midlands’ businesses through today’s complex regulatory requirements, sustainability targets and market expansion. Their input can not only provide valuable insights into the opportunities, but also help stakeholders to identify and manage the risks associated with growth.
Invest in a skills-first future
Supporting businesses to invest more in developing the right skills to help fuel their growth would bring huge benefits to the regional economy they serve. As PwC’s Youth Employment Index highlights, the West Midlands economy could gain over £2.5bn a year by improving youth employment, training and education prospects. Research carried out by the Financial Services Skills Commission with support from PwC found that the UK’s financial services sector could gain £555m per year in additional output by closing its skills gaps.
Let’s talk
I look forward to meeting as many of you as possible and discussing your ideas on the way forward at TheCityUK National Conference on 26 November.
