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Andrew Sissons
Researcher, Big Innovation Centre
T 020 7976 3609
Andrew  Sissons

The only way is Knowledge

Authors: Andrew Sissons Andrew Sissons

29 June 2011

This is a critical juncture for the UK economy. As the Eurozone (our biggest trade partner) is plunged into crisis, as America faces political deadlock over its public finances, Britain is caught in the middle. Our economy has barely grown since the transient boom early in 2010, and today’s ONS figures on the service sector suggest that the economy slipped back further during April.

At this crucial moment, there is only one way forward for the UK economy if we are to avoid a decade of stagnation or another financial crash: the knowledge economy. Our report out today, A Plan for Growth in the Knowledge Economy, sets out a clear blueprint for returning Britain to prosperity, by focusing relentlessly on our economic strengths. But this prosperity and stability can only be secured if the government takes this seriously, and puts in place a lasting framework for growth in the knowledge economy.

The knowledge economy is not everyone’s cup of tea; for some, it is a terrifying prospect. The rise of the knowledge economy has coincided with the decline of many traditional jobs, and this has caused hardship for people and places across Britain. But the knowledge economy is an inescapable reality, not some fanciful invention. It has been changing our lives for decades, and will continue to do so. Sweeping economic changes always inflict pain as well as creating opportunities, but we cannot swim against the tide of change. The challenge is not to reverse the growth of the knowledge economy, but to make it work for everyone, everywhere.

My colleague Charles Levy will present our plan for the knowledge economy in Parliament this afternoon, to an audience that will include Vincent Cable, the Business Secretary. Our plan is built on three foundations: people, business and infrastructure.

Equipping people to thrive in the knowledge economy is vital; ultimately, our economy is built on the skills and ambitions of individuals. The knowledge economy demands ever-increasing skills from workers at all levels, and our education and training systems must keep pace. We need to keep increasing the number of graduates we produce, and we must allow UK firms to access talent from around the world. But skills are about more than universities and graduates; we need apprenticeships and training schemes that boost skills at all levels, for everyone.

The UK has some of the greatest companies in the world, but we will need more if we are to create enough jobs in the future. In particular, we must focus our efforts on small group of innovative, fast-growing companies, and turning them into world class businesses. We need to give companies that can grow the capacities and support they need. At the same time, we need businesses of all sizes to invest in their knowledge bases, and the government must give firms the confidence that they can invest in Britain.

Finally, we need to look more closely at the array of infrastructure that supports our knowledge economy. This includes our universities, our intellectual property system, regulation and the army of business service firms that help spread ideas and expertise. Meanwhile, we must harness the potential of the knowledge economy to drive innovation in our public services.

This is a broad and challenging programme for government, but it is entirely achievable. Our vision of the knowledge economy is built on the possible. The knowledge economy is central to Britain’s future, and must not be a political football. Putting in place our plan is the only way to secure a stable and prosperous future.