The report identifies the 31 most economically significant clusters in the UK which, despite containing less than 10 per cent of the nation’s businesses, generate 20 per cent of its overall economic output. Together, these clusters employ four million people – one in seven of the working population – and typically offer substantially higher salaries than their surrounding regions.
“Clusters are an essential feature of an innovative and dynamic economy, and the Government needs to support them and remove the barriers to their growth,” said Lord Sainsbury.
While London and the South East are home to nine of the country’s most productive clusters – including creative and digital industries, business and financial services – the UK’s clusters are spread throughout the country, and encompass a wide variety of sectors.
Supplementing data analysis with a case study approach, the report captures some of the ways in which clusters operate day-to-day – from long-established clusters such as the ‘Golden Triangle’ of advanced research between Oxford, Cambridge and London; Scotland’s tourism industry; and the South Yorkshire metals industry; through to more recent clusters such as ‘Motorsport Valley’ in the Midlands, or the emerging high-tech cluster spread across Bristol, Bath and Swindon.
Snapshot of the UK’s Economically Significant Clusters in 2014
“Many of the UK’s clusters are globally significant, but they must be supported to drive further innovation, productivity and performance. We must also encourage emerging clusters to accelerate their growth and enhance their national and international profile,” said Lord Sainsbury.
Industrial Revolutions identifies a number of significant barriers hampering the growth of Britain’s clusters, including a lack of access to skilled workforces, infrastructure and investment, and puts forwards practical recommendations to overcome them.
While the particular challenges faced by each cluster sector reflects their industry specialisations and geographical locations, many of these barriers were found to be consistent across the case studies underpinning the report. These included a failure to systematically connect with stakeholders both inside and outside of their networks, including businesses and universities, and an ongoing lack of brand identity – which the report explains is critical for achieving the national and global recognition to support their future growth.
To address these barriers, Industrial Revolutions recommends urgent action from both Government and industry. It calls on the UK Government to:
- better support and incentivise universities to commercialise their research and contribute to their local knowledge economies;
- address critical skills shortages in areas valuable to clusters, such as computing and engineering; and
- provide greater investment in targeted infrastructure projects.
In turn, it encourages clusters to work better at a local level to make use of the talents and opportunities available to them through their density and their localised networks.
“The best path forward to overcome these challenges is for the Government to ensure that responsibility for growing our existing and emerging clusters is placed at the heart of a Ministerial portfolio – whether through the appointment of a dedicated Minister, or through affording it a prominence it has not yet received,” said Lord Sainsbury.
“The role of this individual would be to act as a champion for the UK’s clusters, working closely with them to establish leadership teams, and to make certain that government departments support them and remove barriers to their growth.”
Chief Executive of the Centre for Cities, Alexandra Jones, believes that many of the barriers to clusters’ development are common to businesses throughout the UK, and reflect a broader disparity in the strength and efficacy of regional business markets.
“We know that relatively small, but targeted investments in areas such as skills and infrastructure can make a significant difference in the UK’s economic output. Improving local business environments and increasing the flexibility of our cities to respond to their specific challenges will not only support existing clusters to reach their potential, but encourage the emergence of new clusters and high-growth firms in all sectors across the UK.”