South West’s top ranking for innovation hiding its poor skills and low productivity levels, says CBI

May 12, 2021

The South West is England’s top region for business innovation, according to a new report by the CBI – but it faces challenges over its low productivity and skills gap.

The CBI report also reveals that low levels of unemployment and short commuting times compared to other parts of England gives the South West the highest satisfaction rating among its residents. 

The research by the CBI, supported by Lloyds Banking Group, analysed the comparative economic health of England’s nine regions, assessing their strength in key criteria around business activity, education, employment, connectivity and social outcomes through a series of scorecards.

The report forms part of the organisation’s wider work on reviving England’s regions, which highlights their successes as well as the challenges they must be overcome to succeed in the wake of the Covid-19 pandemic.

While the South West came top for business innovation, the CBI report identifies key challenges for the region and called for investment in areas such as productivity, its patchy digital connectivity and the low numbers of firms offering in-work training, which in turn contributes to its skills gaps. The region also rates below average for deprivation and exporting.

Priorities for the South West include:

  • Tackling skills gaps by uniting business, local government and academia to develop a future workforce for growth sectors such as advanced engineering, digital and green technologies.
  • Improving digital infrastructure through full-fibre rollout, easing pressure on physical infrastructure and accelerating decarbonisation.
  • Inspiring world-class businesses to invest in the region by improving access to targeted business support and capitalising on high-quality regional universities to grow research and development and low-carbon industries.

The CBI said it hoped its findings would focus minds of businesses and politicians at all levels – including the newly-elected West of England metro mayor, Labour’s Dan Norris – ahead of the release next week of its economic vision for the regions Seize The Moment.

CBI South West acting director Ben Rhodes, pictured right, agreed that there were many issues that needed to be addressed if the region were to reach its full potential.

“The South West is one of England’s most vibrant and diverse regions, boasting strength across a wide range of sectors such as cyber and defence, high-value manufacturing and aerospace, fintech, maritime and creative industries,” he said.

“It also has the potential to excel in industries of the future. This is a region that is well equipped to play a leading role in the UK’s push for net-zero, supported by a high-performing higher and further education sector, and regional assets such as the  UK Met Office, GCHQ and the National Composites Centre. There is much to build upon.

“Yet there remains work to do. Long overdue investment in digital and physical infrastructure is crucial, alongside action to tackle skills gaps.

“Leaders in business and at all levels of government must show the ambition and vision needed to foster a culture of growth by investing in the infrastructure, people and skills this region needs. 

“Effective partnership between public and private sectors will be essential in enabling the South West to rebuild from the economic ravages of Covid-19, drive up its productivity, and lay the foundations for a better and more prosperous future for all.”

Lloyds Banking Group ambassador for the South West of England, Jeremy Hayward, pictured right, agreed that the region should capitalise on its strength in areas such as business innovation and life satisfaction.

“These means the brightest and best from the region will be encouraged to stay, while others will be attracted by what we have to offer,” he said.

“However, we cannot be complacent. There is work to do to address skills gaps in some parts of the South West and while we are gaining ground in terms of productivity, differences in output between parts of the region mean the public and private sectors must work together to make sure no communities are left behind.”

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