Newcastle, Leeds, Liverpool and Brighton are set to emerge as supercities, and the economic map of Great Britain is set to be transformed as centres for gaming, wind farms and robotics replace factories, power stations and livestock. Or so says a new report from HSBC.
It really is a fascinating study, and one that coincides quite closely with the view expressed here often enough, that the credit crunch can be a force for positive change, if we let it.
No doubt you are familiar with the argument that one of the characters that makes up the Chinese word for Crisis, when read on its own, means opportunity. This morning in The Telegraph, Edmund Conway said the ancient Greek for crisis “translates into opportunity”.
To be honest, you can over-egg these things. It seems not all are convinced by the Chinese translation of crisis, and at least one academic has completely dismissed the ‘crisis equals opportunity’ argument. As for the Ancient Greek translation, all that will be said here is that it is a “new one on us.”
And yet it does kind of make sense. It has often been argued here, that when old industries fall, the vacuum that is left is often filled by new exciting businesses. Subsidies for inefficient businesses may seem to make sense in the short term, but if these have the effect of crowding out investment into new business, then these subsidies can be very damaging in the longer term.
Creative Destruction is a popular theme of this column. It was advocated by the economist Joseph Schumpeter, and indicated how destruction can be an engine for positive change.
Given all that, this new report from HSBC really is the best case put forward to date to show how the UK can eventually come out of today’s crisis with a much stronger economy – eventually.
The report, from HSBC Commercial Banking and The Future Laboratory, predicts that the economic downturn, increased emphasis on internationalisation and changing demands on business will profoundly alter the UK’s ‘business map’ as the 21st century unfolds. It is forecasting a new regional geography with the birth of five new ‘supercities’ and a map of tomorrow populated by nanotech, cybernetics and a growing emphasis on bio and tech sciences driven by new economic income streams.
According to the report’s authors, the changes are being driven by the recession, which will create an emphasis on interpersonal skills in business; technological advances; the demands of many for new and flexible ways of working; more business trade taking place across international borders; and a rise in entrepreneurship. It predicts that what the UK has been known for since the Industrial Revolution is set to change, and fast.
So, what will this map look like?
HSBC sees Edinburgh, Birmingham, Essex, London, Manchester and Plymouth becoming centres for robotics.
York and Dundee will be known for their biotech. Oxford, Cambridge, Newcastle, Durham, Bristol and London will have strong specialty in nanotech.
Stem cell research will be focused on Edinburgh, London, Cambridge, Liverpool and Manchester. Nutraceuticals will be big in Dundee and Southampton. Renewable energies will be focused on London, Wales, Cornwall and Glasgow. Cybernetics will be the in-thing in Reading, while Dundee, Edinburgh and Glasgow will be centres for gaming.
The report also identifies four new ‘types’ of entrepreneurs that are set to capitalise on the current environment and drive the changing landscape forward. From transpreneurs – “an elite new breed of super-global entrepreneurs … with connections and workspaces all over the world“ – to referral economists – who have emerged from the social networking boom, are ‘always on’ and are building businesses on word-of-mouth alone, the report finds these groups are rapidly shifting the way we work and do business in the 21st century.
Other interesting findings from the report include the idea that London will lose a certain amount of its importance, while the north-east will become a bigger contributor to the UK’s GDP.
The HSBC report also expects cities to develop stronger brand identities. “Every city wants to be known for something and develop a personality, and they will increasingly do this.” Many post-industrial cities in the UK are re-invigorating themselves by creating iconic institutions. “Look at Cardiff and the Millennium Stadium … Newcastle and the Baltic Centre for Contemporary Art is another. People and cities want an identity,” said Dr Faulconbridge, one of the HSBC panel of experts.
And finally, what will the UK’s strengths be in this brave new world? HSBC asked what should UK business stand for. World-class creative industries are the top choice. This was followed by a top education and training system, underlining respondents’ anxieties surrounding talent shortages and increased global competitiveness. Innovation and entrepreneurialism came third, followed by best talent and human capital in fourth place.
© Investment & Business News 2013