Regional growth, productivity and the role of the business school
By Carolyn Fairbairn, director-general, CBI
One of the great privileges of being Director-General of the CBI is that I get to travel across the country meeting people from so many different businesses. These companies range in size and sector; no two are the same.
However there is one recurring theme in all these organisations: the difficulties employers face in finding the talent and skills necessary to take their businesses to the next level.
At the heart of this is a concern over low productivity, with a shortfall in skills a key factor behind this. Its impact is felt by businesses across the country.
Just as this is a concern for companies, it is also a concern for business schools. After all, it is something we hear a lot about - on the news and in the papers - but too often we forget what productivity actually means to people. Productivity is the foundation upon which so much of our prosperity rests: higher wages, better living standards, greater opportunities.
The differences just within the UK alone are striking, and I am not only talking about the differences between the North and South, or London and the rest of the UK, but the differences that exist within cities and regions.
For instance, a worker in Solihull earns £5,000 more than someone down the road in Wolverhampton, thanks to Solihull being one-third more productive than Wolverhampton.
This is an issue across the UK’s regions and nations. Since the financial crisis, our productivity has stagnated. So much so, that the Office for National Statistics has said that the current situation is unprecedented in the post-war period.
Nine out of ten UK cities perform below the European average when it comes to productivity, and more than half are among the 25 per cent least productive cities on the continent, according to the UK's Centre for Cities report ‘Competing with the continent’.
As we prepare to leave the European Union and redefine our role in the world, these are issues that we desperately need to address in order to remain competitive. The size of the prize in tackling our productivity issues is enormous.
If each local area could improve productivity at the same rate as the top performer in their respective region or nation, our economy could be £208bn larger by 2024. This is why the development of modern industrial strategy is so important, as it allows us to address these weaknesses but also build on our considerable strengths.
The CBI believes that there is the opportunity for the UK to be the most open, innovative and inclusive economy in the world, home to a leading knowledge base and world-class sectors. So what do we need to do in order to make that vision a reality? And, more importantly, how can business schools help support this work?
We know that there are many drivers to increasing productivity, such as investing in infrastructure or in skills. Yet crucially, we also know that there is great potential for organisations to increase their productivity by closely examining their management practices.
As we stand on the threshold of a new wave of technological development - from artificial intelligence to the advance of robotics - it is important to recognise how the world of work is changing.
Diffusion of new technologies across the economy, whether that is new processes or management methods, will be of crucial importance as we enter into this new period. That means for business schools to properly prepare their students for the modern workplace they need to train graduates not for roles that exist currently, but for those that will exist in five, 10 or 15 years.
This is no easy task, but business schools are ideally placed to deal with these challenges. In bringing the UK’s world-class higher education sector with expertise from business leaders, Chartered ABS members are at the crucial interface between universities and business.
Much of this relies on greater collaboration, between businesses and universities, but also within business schools themselves.
And this means business schools need to keep their curriculum under constant review to make sure it reflects the changing world around us and draws upon the interdisciplinary strengths of universities.
Not only do we need them to provide students with the traditional skills that come with executive education, but business schools need to provide innovative programmes demonstrating the latest thinking and best practise in a range of areas, such as marketing, operations, resources and leadership. After all, problems in business are seldom focused on a single research discipline.
Let’s be clear: we are in a good position to tackle these problems and business schools are well placed to help as we develop a modern industrial strategy. The UK is a world-leader in innovation and R&D, and has a higher education system that competes with the United States. More can be done to bring these two things together and we need Chartered ABS members to help in this.
Ultimately, we need to get to a situation where it matters far less where you work, be it in Solihull or Wolverhampton, and what matters instead are your ideas and the way you run your organisation. By ensuring we do more with business and not about business, I am confident we can achieve this vision.
This article is from ‘Rethinking Business Education’, a collection of thought pieces produced to celebrate 25 years of the Chartered Association of Business Schools