The UK’s poor productivity performance continues to be of much debate in policy and research and is central to the development of the Industrial Strategy. This research focussed on how the Professional and Business Services (PBS) sector can contribute to Local Industrial Strategies and create growth both within the sector and be a driver of growth in other sectors. It takes our understanding of the sector beyond London and looks at what part it can play in redistributing wealth and helping to build strong places outside its traditional centre.
This research set out to:
- Assess whether the PBS sector has the potential to support regional economies and help them to thrive.
- Examine how it contributes to the understanding of Local Industrial Strategies (LIS) and suggest ways to unlock support from industry.
- Build up the evidence base to support the development of a shared strategy between industry and government to bolster the PBS sector outside of London.
The work was carried out using a mix of focus groups and interviews with businesses as well as a background literature review in two case study areas of Darlington and Birmingham. These places are at the opposite ends of the spectrum based on location quotients making them extreme, but representative places for the sector outside London. We found that:
- The PBS sector plays a key role in regional economies and helps them to thrive, from supporting business planning, financial management and exporting to technology development, recruitment and marketing. However, the sector is highly reliant on wider business demand for services and without it, the sector will not exist. Currently, the government combats this through various business support programmes to address information failure where business fails to see the benefit of PBS type services. Therefore, there is a crucial role for government and the PBS sector to collaborate on raising demand to reduce the need for government intervention, address the market failure and grow that demand.
- There is a key role for the sector in helping shape Local Industrial Strategies (LIS) by providing services which drive growth and there is a need to ensure that the sector is seen as vital. However, there is a definition disconnect between how the sector is engaged with locally and nationally, which may create confusion in devolving national programmes and who can access them. This mainly applies to the financial and insurance services sector which is integral to local definitions but is supported elsewhere in national government.
- Development of a shared strategy nationally and locally between industry and government is key to bolstering the PBS sector outside of London. This includes developing better perceptions of place and opportunity, enabling the sector to innovate, and investing in infrastructure that supports the growth in jobs, businesses and attracts labour, alongside developing a mix of pathways and routes into employment.
This report was written by:
- Rebecca Riley
- Dr Chloe Billing
- George Bramley
- Professor Anne Green
- Dr Charlotte Hoole
- Dr Abigail Taylor
It was funding by BEIS. It was made possible through the support of colleagues at BPS Birmingham, Darlington Borough Council and Greater Birmingham and Solihull Chamber of Commerce. We would like to thank Hilary Smyth Allan, Mark Carrigan, and Henrietta Brealey for their assistance and support. We would also like to thank BEIS staff for their input into this report, particularly the BEIS PBS Policy and Sector Analysis Teams.
You can find out more about the project from a previous blog.
This blog was written by Dr Chloe Billing, Research Fellow at City-REDI.
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