Brits should be less British about boasting about the strengths of our economy and our enduring spirit of entrepreneurialism, creativity and innovation, says Saker Nusseibeh
It is a common characteristic of our national discourse to err towards the negative. An inclination to see, but not celebrate, what this country already does so well. Perhaps it is just our British diffidence, but there is something which prevents us from proudly trumpeting this country’s many great attributes.
Yes, the immediate backdrop is rather bleak. Public finances are under extreme pressure, productivity is not where it should be and we have a lingering cost-of-living crisis. But we also have much to boast about and get behind.
As the UK government rolls out the red carpet for global investors at its International Investment Summit, a worthy effort to lure more private capital to our shores, now is the time to rebalance the rhetoric and remind ourselves and the world what we are exceptional at.
I hope the Government can convey to delegates what, I firmly believe, is the enduring spirit of entrepreneurialism, creativity and innovation that can be found across the United Kingdom today.
Countries need foreign direct investment; it plays a critical role in increasing productivity and raising living standards. Yet in the UK it has declined to a 12-year low. Last month, £666m was withdrawn from funds that invest in UK companies. It leads to a worrying conclusion that international investors are not sufficiently confident about the UK’s outlook.
Getting the pitch right
Which is why this Investor Summit is so important. Getting the pitch right is crucial but it should not be hard as there is plenty of material to work with.
Take cities. Their regeneration as economic powerhouses are key to national productivity growth. These are hubs of innovation, centres for commerce with the populations needed to drive them. As real asset investors, cities are also very attractive investments over the long term.
By way of example, the redevelopment of King’s Cross in London, a project in which we were closely involved, stands out as one of the great regeneration successes of recent times. The £3bn programme focused on unlocking the nascent economic opportunity of the area, reviving the communities silenced by its decline, and breathing life back into the unique natural environment surrounding the canal.
By engaging with local businesses and communities, a new vibrant city quarter has been brought to life – filled with new homes, shops, offices, leisure and community facilities. Leading multinational companies now base themselves there, alongside local businesses and community enterprises.
And it has delivered strong annual returns to its investors over the long term, including those from oversees who have helped facilitate this project.
It is a standout example of economic and societal benefits operating hand-in-hand, but it is not the only example and by no means exclusive to London. Across our cities, including Birmingham, Manchester and Leeds, there are projects that bring together commercial, residential and cultural considerations to deliver a wider economic benefit, alongside healthy returns for investors.
It is also worth noting that these are projects made possible through excellent cooperation between the public and private sector, especially at the local government level which perhaps has an agility the national one does not.
Another area in which the UK is a world-leader is life sciences, amply demonstrated by the remarkable and rapid delivery of a Covid vaccine in 2020. According to government data, in 2021/22 the life sciences industry generated nearly £110bn of turnover, employing over 300,000 people.
In 2021/22 the life sciences industry generated nearly £110bn of turnover, employing over 300,000 people
We have excellent supporting infrastructure, notably in the Oxford to Cambridge corridor with life science clusters such as Milton Park, operated by our MEPC business, a 300-acre centre of excellence home to 250 life sciences and related technology organisations employing 9000 people. Companies based there have attracted over £2bn of private equity investment in the last ten years.
Governments, past and present, have bolstered the life sciences industries with investments but with the expertise and enterprise we possess there are also plenty of opportunities for private capital.
Renewable energy is another sector where we have significant expertise, particularly in offshore wind energy. The UK government’s commitment to remove blockers to the “clean energy sprint” should encourage investors in unlocking, by some estimates, £115bn in additional, private investment into the UK’s energy transition.
Excellence across these islands
The UK is brilliant at technology with the sector boasting 171 unicorns and a market valuation of $1.1 trillion. We have a phenomenal arts and music industry (the third largest music market in the world in 2023) and we’re no slouch when it comes to sport, particularly premier league football which brings in billions to the UK economy. And we are very good at financial services, the world’s largest net exporter in fact in 2022, and professional services.
All of which is underpinned by the UK’s excellent education sector. We have outstanding universities and colleges, great schools in both private and public sectors. The education sector brings in around £28bn of revenue to the UK and, of course, is in the business of educating our future wealth generators.
Like other economies, the UK faces challenges – but we also house excellence on these islands. It is time we reminded both ourselves and the world’s investors of that and make the case powerfully for the investment our many great industries deserve. The UK is most definitely open for business.
Saker Nusseibeh CBE is CEO of Federated Hermes Limited