Firms must 'step up and adapt' to a tech-first global economy says new CBI President

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, Brian McBride said thriving companies would be the ones to ‘step up and adapt’ – not those that ‘hunker down and wait’ for opportunities.

And Mr McBride announced that the CBI would be launching a new 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 $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.”

He added: “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."

He said that the changes happening around us challenge our economy, but they also create opportunities for us to reach for growth, and the UK can get ahead of the curve and grasp those opportunities.

"I think it will take three things. One – powering up our start-ups and scale-ups. Two – building partnerships across the country and around the world to boost UK tech and innovation. And three – increasing participation, to get more people and more firms involved in the future economy."

“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.”

There is no doubt the biggest blocker to business is labour and skills shortages, he added.

“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.”

The country has to accept the reality that it 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.”