High Growth Sectors
A big part of the future of the UK economy will be in Knowledge Based Industries (KIB) and the Service Sector. The low cost production bases in the UK have diminished, due to increased competition from abroad and as such it is important that businesses focus on producing high value added products and services, which allow them to make the best use of the resources at their disposal.
These sectors are amongst the fastest growing in the UK and they will continue to be the key catalysts for growth in the regional, national and international economies, with this in mind it is important to put the infrastructure in place to allow the business stock to cease the opportunities which are in front of them. The knowledge intensive sector in particular, depends on a ready supply of talented individuals qualified to level NVQ level 4 or above. This a problem for some regions, particularly the North East where another 200,000 employees are required to bring KI employment up to the national rate. The challenge is not only to respond to current demand for specialist labour, but also to anticipate future requirements. It is likely that these skills needs will be met by a combination of home grown talent and individuals attracted from elsewhere in the world.
High growth sectors are also heavily reliant on a steady stream of investment in R&D, without this it is difficult to create sustainable long term growth. In order to ensure that they remain competitive companies must be developing new and innovative products designed to meet the evolving needs of their key customers. Once again the North East finds itself at a distinct disadvantage as R&D spending per head is well below the national average, but encouragingly the investment in R&D by private sector companies is strong relative to the size of the business stock.
A developed presence at the forefront of global high growth sectors is essential if the UK is to protect its position as one of the most innovative and progressive economies in the world. There will be increased levels of competition as emerging economies such as China, India and Brazil develop and move into higher value added production and services. In order to remain one step ahead, the UK must ensure that it anticipates future skills needs and develops the physical infrastructure required to support its growing businesses.