Carolyn Fairbairn

Carolyn Fairbairn speaking at Aston University

MacLaren 2017: Our ‘golden opportunity’ for a better economy

There is a ‘golden opportunity’ for business, academia and political leaders to create a competitive, innovative economy post-Brexit, according to CBI Director-General Carolyn Fairbairn.

Delivering this year’s MacLaren Memorial Lecture – an annual event held jointly by Aston University and the Chartered Management Institute – Carolyn called for increased investment in management training and development in order to close the productivity gap between Britain and its G7 partners, but also the gaps that exist between different UK regions.

Carolyn drew on the findings of a CBI study that analysed data from 172 regions and districts in the UK to gain a greater understanding of productivity, which she described as the “defining issue of our age”.

London’s productivity, for example, is more than double that of the UK’s bottom six regions. But the research found that there is almost as much variation within regions as between them.

In the West Midlands, for example, Solihull is a third more productive than Wolverhampton, just 20 miles away. This has a knock-on effect on wages and living standards. Someone living in Wolverhampton, for example, earns on average £5,000 less than someone in Solihull.

In terms of education and skills, Carolyn said business had a role in inspiring young people through apprenticeship degrees and wider skills training. She said the example of London schools, turned around largely through good leadership, needed to be spread nationally.

In transport, Fairbairn argued that big projects like Heathrow expansion and HS2 must be matched by local infrastructure improvements, such as combatting congestion, making it as easy for people to commute into their nearest city as it is for Londoners.

The researchers modelled the impact of increasing the speed of travel within cities by 50%, so that people who were within 45 minutes of the centre could now travel there in 30 minutes.

In a city like Birmingham the resulting productivity gain could be as high as 5%. “There needs to be infrastructure renewal across the whole country – it doesn’t need to be and either-or choice.”

Fairbairn also contended that greater exporting could make a real difference to regional productivity. If each “potential exporter” became an “actual exporters” she estimated the number of British exporters would rise by almost 75%. “One of the shots in the arm that Brexit gave us is to make firms think more about exporting,” she said.

In her wide-ranging lecture, Fairbairn praised the progress that has been made on devolution, and the importance of regional issues being considered alongside Brexit.

“Today, there’s a real sense of excitement as regions and nations step up, lead and take charge of their own destiny. There is energy in the air, a greater focus on exporting, more conversations about what’s special about each region, and bringing decision-making closer to the people it affects.”

Carolyn called for the setting of targets to make the UK the most competitive, innovative economy in the world by 2030, while closing the productivity gap between best and worst performing UK regions by 15%. Progress towards these targets should, she argued, be monitored through a newly created “hold-feet-to-the-fire” unit modelled on the Office for Budget Responsibility.

Following the lecture, CMI chief executive Ann Francke, commented that while improving management in organisations is one of the main drivers in helping to unlock regional growth, the biggest boost to productivity – better managers – is often overlooked.

“By improving the employability of young people and helping them to make the transition into work, we can prepare the next generation of managers for the workplace, and help improve regional productivity,” she said.

“With 56% of young people in the Midlands finding it difficult to get the experience they need to get a job they want, we need to address this earlier by creating closer links between employers and education.

"This is why we’re pleased to partner with Aston University to embed CMI accreditation in their courses and to produce some of the first Chartered Manager Degree Apprentices.”

The MacLaren Lecture is an annual event held jointly by Aston University and the Chartered Management Institute. The event has run since 1953, and has attracted major speakers from business and industry.

It commemorates the life of James MacLaren, one of the most eminent industrialists in Birmingham’s history. MacLaren was one of the founder members of the Birmingham branch of the Chartered Management Institute and was the first chair of the Birmingham College of Technology, an antecedent of Aston University. He was particularly known for developing links between industry and education