SW economy has unlocked potential
Research published today highlights the unlocked potential of the South West economy.
It claims that the Gross Value Added (GVA) in the region could be increased by up to £50 billion by 2025 if GVA per worker in the South West matched the G7 average (excluding the UK itself).
Highlighting the continued challenge over productivity, the study also reveals that the South West economic value per workforce job is £6,000 below the UK average of £47k per work force job. Currently London tops the chart of UK regional GVA figures, outstripping the South West by over £20,000 per work force job.
The research released today by business and financial adviser, Grant Thornton UK LLP also showed that economic output per hour worked in the South West is 8% lower than the national average identifying a key area for growth in the region.
The research highlights the importance of the South West actively unlocking its potential contribution towards national economic growth ahead of the Chancellor finalising the March Budget plans.
The study marks the launch of Grant Thornton's Vibrant Economy agenda, a nationwide inquiry to unlock the shared potential of the nation by working with cities, communities and the corporate, public and third sector to jointly develop new solutions.
Grant Thornton worked with the CEBR and YouGov to understand how encouraging the South West to unlock its potential will eliminate the regional economic divides and work towards achieving national economic ambition.
The nationwide YouGov survey of over 1,000 business leaders showed good infrastructure (e.g. broadband, transport links, location) comes top of the agenda in the South West, with 81% of decision makers in the region identifying this as a key factor in the growth of their business.
Skills shortages are still holding businesses back. Nationally, filling all job vacancies that are left empty due to skills shortages could provide a £8.9bn boost to the UK economy by 2025. The YouGov research shows that businesses can do a lot themselves to help achieve this potential, particularly in terms of developing their workforce. 65% of South West business leaders said that their future success depended on attracting new talent, but only 48% of respondents believe development and retention of their current employees is important to business growth.
The number of sick days taken in the South West appears to be a key factor that could inhibit economic growth in the region. The research reveals the London average for worker annual sick days as a share of total working days is 1.5% compared to the South West average of 2.1% days. With improved health in the region to a sufficient level to bring the South West in line with London’s levels, the South West could see an increased output of £48 million by 2025.
Results also show the opportunity for businesses to boost their success by focusing on more than just profit. Research by the Edelman Trust shows that a business' contribution to the greater good is the leading factor in whether people trust that business. 39% of business decision makers in the region identified that ‘having a positive impact on the community and society’ is an important factor in their business achieving its full potential. With the UK average just 27%, the South West is ahead of the game.
Grant Thornton UK LLP is launching its Vibrant Economy agenda to encourage the nation to join them in stimulating discussion, ideas and solutions that will unlock the South West’s full economic potential.
Tim Lincoln, Practice Leader for Grant Thornton South West, comments:
“Today’s research has revealed exciting economic potential for the South West. Identifying and understanding some of the key challenges our region faces will allow us to proactively address how we can ensure the South West plays its part in contributing to national economic growth.
“It is perhaps unsurprising that infrastructure and transport links continue to top the list of what businesses say need to realise real growth. The electrification of the Great Western railway line between Bristol and London is a step in the right direction to address this economic need, and the finalisation of this project can’t come quickly enough to truly help our region’s businesses flourish.”
Grant Thornton is establishing an independent Commission to steer a series of thematic and city-based Inquiries over the course of the next 18months, supported by a community of individuals and organisations who exemplify what it will take to build a vibrant economy: the Faces of a Vibrant Economy.
Grant Thornton has identified three areas where it believes it can make the most impact in shaping a vibrant economy. These are areas of credibility and strength for the firm, where its skills, connections, expertise and knowledge provide a great opportunity to contribute to sustainable growth. These areas have been identified as:
1. Building trust and integrity in markets.
2. Unlocking sustainable growth in dynamic organisations.
3. Creating environments where businesses and people flourish.
The aim of Grant Thornton’s nationwide Inquiry is to collaboratively explore how the UK can accelerate economic progress, social good and opportunity for businesses, cities, people and communities. Grant Thornton is undertaking this Inquiry as an organisation that has a cross-nation, cross-sector vantage point on the UK economy, working nationwide with organisations across the public, private and third sectors.
