Economic Growth and the Role of Businesses

During the current economic downturn, it can be difficult to see where future growth might come from. However, the grand societal challenges: demographic change, clean energy, health and well-being, food security, smart transport etc, provide considerable economic opportunities for businesses of all sizes. The key is to take an innovative approach and to be more effective in the commercialisation of knowledge. There is a long tradition in the UK of producing excellent new ideas but less effectiveness of late at turning these ideas into business opportunities. This has to change.
Not all businesses are capable of growth or indeed have a desire to grow. What is important is that those businesses that are able and want to grow reach their full potential with help and encouragement. The contribution of other businesses, which will still create wealth and provide employment, has to be recognised and supported.

Sustainable

Growth should be sustainable in every sense. Products and services have to use materials sustainably using the full life cycle approach, especially where scarce resources are involved. Processes should be low energy, using energy from renewable sources as far as possible. Business models should consider the medium and longer term, rather than looking for a quick return. Businesses need high quality and decisive leadership in order to focus on providing the right products and services at the right price in the right markets. The role of design is crucial in order to make best use of resources and to improve the ease of use and quality of products.

Inclusive

Growth should always be inclusive, both socially and economically. The benefits of growth and job opportunities should extend to all sections of society. This is not merely a matter of complying with legislation but has to involve taking positive steps to include people where there is under-representation in terms of gender, ethnicity, etc. Today there is a particular challenge of youth unemployment. The talents of young people should be encouraged to help the individuals achieve their full potential. Various ways to achieve this are appropriate including modern apprenticeships and support for entreprenuerism.

Collaboration

Businesses cannot achieve growth in isolation. Supply chains are increasingly global. This increases the growth opportunities for individual businesses but also makes them more vulnerable to competition. Access to knowledge to develop new products and services, and access to markets can be more effective when carried out on a collaborative basis, especially for smaller businesses. Being part of a cluster can improve the growth potential of a business. An effective cluster organisation will significantly improve the competitiveness of businesses within the cluster.

Measurable

Growth has to be measurable. There has to be a shared vision for the future by businesses, government, academia, providers of finance and support organisations with agreement on what success looks like. This will determine what baseline data needs collecting so that agreed goals can be set and progress monitored. Success should be recognised and celebrated.

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Bill Greenhalgh manages the Centre for Enterprises contribution to the TACTICS cluster policy project.


TACTICS, funded by the European Commission (DG Enterprise), has six themes:
• Cluster Internationalisation (led by Bill)
• Channelling R&D/Innovation funding through clusters
• Cluster marketing and branding • Clusters in emerging industries/innovative services
• Evaluating cluster policy
• User-driven clusters