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Historically, the UK has thrived from exporting goods globally. The cotton and wool industries in Yorkshire and Lancashire, for example, became wealthy off the back of exporting both cloth and clothes around the world. Allied to those industries were all the subsidiary ones – such as industrial chemicals for dying and washing clothes, and the specialist machinery that weaved fabric or stitched it together. As a result of our global export success, Manchester became the world’s first industrial city.
At the time, the UK had a good supply of energy from coal and oil fired power stations (again from resources which were obtained in the UK). We also had a fine tradition of ship building and shipping itself, with a rich hinterland on the back of that created by banking and insurance industries based primarily based in London.
Then, as time has moved on, so did our industry. Our manufacturing base is now predominantly stemmed within speciality products such as steel, or in lifestyle products such as cars. However, what we are exporting now in ever great capacity is our creative know-how, in music, TV, software and research.
The UK is still the world’s leading researcher into vehicle technology, pharmaceuticals and life science technology. It is no coincidence that new mRNA vaccine production facilities will be built in the UK, with research facilities and the NHS each playing their part in developing new treatments for everything from virus infection through to new cancer treatments.
A leading sector in the UK economy
They say knowledge is power and it certainly has proved to be just that for the UK economy. The growth in businesses creating new ideas, products and services depends on the creation of intangible assets or ‘IP’. This part of the UK economy has outgrown every other sector for the past 12 years and there is no sign that it is stopping any time soon.
The further good news is that IP can become global quickly, because the barriers to international trade of intagible assets are far easier to overcome – after all, it doesn’t rely on the physical movement of goods.There’s also a clear economic link between investment in IP and economic growth.
However, while the UK is great at creating – we’re also very good at losing our assets to overseas investors once the businesses start to scale up. Current trade statistics are very poor at capturing the export growth of intangible assets. In my view, this is where the UK Government really needs to step in and help IP rich companies grow and export. There are schemes to help exporters secure IP, but I feel it would be far better to help companies to secure IP assets.
Now the UK is freer of EU tax restrictions, it needs to revisit schemes such as the Patent Box and R&D tax credits and look at helping both investors, and keeping IP within the UK, thereby creating more jobs and wealth in the nation that still gives birth to so many clever ideas.
You can view the complete E2E International 100 track here
