Policy Innovation Blog

Four ways it could all go right

31.05.2010

It’s no surprise to hear the new Business Secretary, Vince Cable describing his department as the Ministry of Growth.

Economic growth is the universal solvent of politics. It’s the factor that makes every other big political challenge – from cutting the deficit to reducing unemployment – addressable.

This is why we’re excited about our latest report on innovation and the economy, which we’ll be launching on June 9. I wanted to give a little teaser here.

We’ve called it “Rebalancing Act”, and in it we look at different scenarios for how the economy might return to growth over the next ten years – and what needs to happen for each one to come to pass.

In particular, we’ve focused on the idea of “balance” in the economy: the idea that over the past decade, the UK’s economy came to rely too much on financial services and asset-price bubbles, and that the country needs to see a return to other means of making a living.

Working with Oxford Economics, we modelled a number of scenarios for what could get the UK back to an acceptable level of growth: business as usual, with manufacturing continuing to decline and services driving recovery; a full-blooded manufacturing renaissance; a high-tech growth scenario; and a future in which businesses across the economy invest more in innovation.

And then we asked: what would you need to believe for each scenario to be credible.

I don’t want to pre-empt the findings of the report, but I can say that it’ll have lots to say about how the economy can recover, what works in encouraging innovation, and the effects that different scenarios for growth have on the prospects of the UK’s regions and nations, on employment, and on business growth.

Watch this space!