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Resilience and renewal

A recipe for growth: Lessons from a local economic success story

Author: ICAEW

Published: 26 Sep 2023

Entrepreneurs and policymakers are investing for the long term.

For any country to shepherd sustainable and resilient economic performance across the long term, it needs to preside over rising productivity. Although an abstract concept for many it’s what allows businesses to produce more goods and services with the same number of workers. Put simply, it allows managers to do more with the same or less resources.

Unfortunately the UK has been going backwards in recent decades. As our in-depth analysis shows, its productivity growth has been weak for a long time. Labour productivity data from the Office of National Statistics (ONS) shows that although the annual percentage change in output per worker has varied considerably over the years, there has been an undeniable downward trend. And although the UK is also not alone in this trend, international comparisons from the OECD show that the impact of the 2008 global financial crisis on the UK has been harder than on many peer countries, and the UK continues to lag behind its peers.

One of the big causes of this sluggish productivity growth, especially in the UK is a lack of investment by UK business. As our first film in this episode shows, there are bright spots in the economy that provide lessons on how to turn this story around. A cluster of entrepreneurs and policymakers in Leeds are building a thriving local economy together based on settled policies that have encouraged investment and the network effects of working close by in related sectors. This network provides skills and know-how to help feed this economic success story and is bolstered by established players in industry adjacencies that have been in the region for decades, such as Asda, Morrisons and the Co-op.

The success of this network has led these entrepreneurs to build businesses that provide higher value, better paid and more fulfilling jobs for those in the local economy, which in turn is making a real difference to the lives of those in the community. And that is the ultimate aim of good economic growth.

For much more on this, visit our content series hub.

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