High-growth firms must have the best conditions to thrive

THE GOVERNMENT’S vision of making the UK the next Silicon Valley has the potential to supercharge the economy on a massive scale.

There are currently nine decacorns (private new companies valued at over $10 billion) in the UK, contributing £4.6bn to the UK economy. If that number grew to 100 decacorns, that figure increases to £74bn, a significant boost to productivity and living standards.

To achieve this, we must build a globally-competitive business environment where firms want to start, scale and publicly list.

The Mansion House Reforms were a welcome move from the Chancellor, to unlock our pension funds for high-growth businesses. This should benefit savers, but also provide our high-growth businesses with the investment they need to grow.

Last month, the CBI met Gareth Davies (the Exchequer Secretary to the Treasury) to discuss how the UK can keep up this momentum to enable high-growth industries to thrive, by focusing on, regulation, investment and public data.

The Government is moving towards this with the Pro-Innovation Regulation of Technologies Review. Leveraging regulation is key to driving innovation as a tool to accelerate technology and the development of emerging sectors.

Mr Davies stated that around 70% of the recommendations of the report are progressing, yet there remain significant pinch points for business. Duplication of regulation by different authorities are creating costs, impeding growth and delaying investment. The lack of skills, leadership and collaboration with regulators is also hampering progress. We should be moving at speed to identify future, high-growth sectors and to adapt regulation accordingly to maximise the financial gains of being a pioneer.

Direct financial investment will always be an important mechanism to encourage high-growth industries and innovation. In the North East and Tees Valley we can play to our strengths in sectors where we lead internationally, such as the green industry, digital and creative industries, biotech and pharma, and advanced manufacturing. Start-ups, scale-ups, and large organisations will need access to finance to cultivate growth and meet demand. Appropriate incentives will further entice businesses to research, develop and commercialise their technologies here.

National assets are another tool at our disposal, where we could be more commercially minded. Our public data, for example, is largely behind closed doors and not open for business to utilise.

The Government is clearly making strides to establish the UK as a world-leading destination for high-growth firms but there is certainly more to be done. The CBI will bring forward recommendations to form a policy playbook this year and will work with government to adopt them.

In a General Election year, it’s critical that political parties seize opportunities to allow high-growth industries to flourish to ensure long-term, sustainable growth.