HSBC UK CEO: To maintain our competitive edge, we need to convince businesses to invest in the UK
In the midst of today’s economic backdrop, the critical challenge facing both public and private sectors is supporting growth through the choppy waters ahead – and the key to this is giving business the confidence to innovate right across the UK.
At the heart of the solution is partnerships, whether that’s between businesses, sectors, policymakers or communities. New research published this week by Centre for Cities, supported by HSBC UK, has found the enormous economic opportunity for highly-productive clusters of innovation outside of the “golden triangle” of London and the South East.
No individual, business or government can meet the scale of this challenge. But for all challenges ahead, from the net zero transition to responding to labour shortages, we need an innovative economy to support the adoption of new technologies to keep the UK competitive.
We need to secure the fundamentals. The pandemic highlighted the best of British innovation and business dynamism, but to sustain this, we need an ambitious vision to harness this sense of creativity. Critical to this is making the UK an easy place to do business in. We need clarity, certainty and predictability to change longer-term investment strategies and decisions. Government must take a strategic approach, in lockstep with business, to convince firms to invest here, innovate and scale.
HSBC UK supports business to innovate through our international network, which covers 85 per cent of global trade flows, and schemes such as our £15bn SME lending fund, which includes a £500m ring-fenced pot for small businesses, and our £250m growth lending fund for high growth tech scale-ups.
But access to finance is only one piece of the jigsaw. We need proportionate and predictable regulation, trade openness, investment in skills and R&D, and policy predictability. If we are to “level-up” the country, public-private partnerships are going to be increasingly important with inflationary pressures.
The Centre for Cities report calls for a £14.5bn pot for Birmingham, Manchester and Glasgow over 10 years for upgrades to existing infrastructure. Beyond that headline figure, the challenge is ensuring that the government – and other public sector bodies – tap into the unlocked capital to drive up productivity. Crucially, this means having a pipeline of bankable and investable projects.
We in the financial sector can facilitate this by working together to advise government on how it can mobilise private finance – by making projects more “bankable” and “spade ready”: scaling-up projects and finding more innovative ways to share the risk, collaboration between regions to promote skills and blended finance, to name just a few.
There is a long history of public and private sector collaboration working – we now need to catalyse the next iteration of partnerships and investment models.
For investors, we should develop a clear, singular, “brand UK” proposition and one front door into central government for major strategic foreign direct investment projects. There’s no reason why the UK can’t blend a single proposition with vibrant regional, national and city identities, each with their own distinctive industrial or innovative clusters.
So while the challenge is significant, there are many reasons to be optimistic. Together we can support businesses which in turn will help drive growth and prosperity across all parts of the country. If we can get this right, the future can be very exciting.