50 Years of Davos

50 years of Davos?

It is 52 years since Professor Klaus Schwab founded the World Economic Forum and chose Davos as the location for its annual meetings, a place described as the perfect sanctuary to escape the outside world. And there was no shortage of problems for those first delegates to escape in the early ‘70s - a?looming oil crisis, Cold War tension with Russia, industrial unrest, and soaring inflation, to name just a few.?

Looking back over half a century later, it doesn’t take too much imagination to see parallels with today’s world.?However, unlike those first visitors to Davos five decades ago, we are not here this week to escape the problems of the outside world. We – Government and industry – are here to fix them.?

Growth?

We’ve now got a government which is making the right decisions for Britain, and for our economy. In his New Year speech – as well as pledging to halve inflation this year, and make sure national debt is falling - the Prime Minister was unequivocal in his commitment to growth.?

Now for this Government, growth isn’t a goal, a target, or a destination. It’s the cornerstone of everything we are doing – and that’s because it’s the single biggest enabler of everything we want to deliver.?

How do we fix the NHS? Growth.?

How do we tackle the cost of living?

Growth.?

How do we level up our country and make it fairer for all?

Growth.?

Nothing will deflect us from this most urgent of priorities.?

Innovation?

But how do we achieve it? If we analyse Britain’s economic growth since the first Davos five decades ago, roughly half of our productivity increase has come from innovation.?

And we have a choice.?

Either we sit back as a nation, waiting for change to happen, and lose our position as one of the world’s leading economies - or we propel ourselves forward. Using the unique combination of assets and talents which Britain possesses to shape the future.?

My overwhelming focus as Business Secretary will be the latter path: to help businesses grasp the opportunities that lay ahead, to inspire and support the entrepreneurs of tomorrow, so Britain can create its own success.?

Last year, the UK was ranked among the five most innovative nations on earth by the World Intellectual Property Office, ahead of South Korea, Germany, China and Singapore. So that’s not our issue. What we must do better is converting start-ups to scale-ups.?

So I want to inspire ‘Scale-up Britain’. Building businesses that don’t just develop in the UK, but stay to grow and mature into world-leaders. And that’s what I’d like to talk to you about today.?

Raising ambitions?

The first step to a ‘scale-up’ nation is to ‘scale-up’ our ambitions. I want to make Britain the most dynamic place in the world to launch, grow and do business. A high-skills, high-wage economy, with a business-friendly culture, where creative enterprise is encouraged and rewarded. At difficult times like this, our instinct could be to turn inwards, think smaller, hedge our bets, and protect domestic industry by closing ourselves off.?

But that’s precisely the opposite of what’s needed right now - rather, we must open up more. We must think bigger, take strategic risks. We must target high-growth sectors with long-term potential. We must form new global partnerships, inviting the world to come and invest in Britain. And we must build a business ecosystem that harnesses our incredible potential to be a leader in the fourth Industrial Revolution, just as we were in the first.?

Tech?

We know that emerging technology is a market we want to lead. And we already have the largest tech sector in Europe - worth over $1 trillion in 2021, making us only the third country in the world to ever reach this historic landmark.?

So we’re well placed, but how do we scale-up innovators into global leaders? We must face facts. We have failed so far to develop any home-grown tech giants that can compete with the biggest global players.?

Granted, that blessed with the world’s finest universities and most enquiring minds, we have produced more billion-dollar unicorn start-ups than France, Germany and the Netherlands put together. But why do so many companies move abroad after being nurtured in the UK? And why doesn’t Britain produce a Google, Amazon or Apple??

After all, it was a Brit who invented the World Wide Web. I think we can learn a lot from Silicon Valley’s ambition and its record creating global tech brands, but we can also learn from the mistakes it has made. Its unicorns have sometimes prioritised shareholder value above all else. Its culture sometimes falls short of the standards we expect from modern employers. And whilst it has made a few people unimaginably rich, the wealth isn’t shared by everyone - with homelessness in nearby San Francisco a visible sign of this inequality.?

So what I want to create is a Silicon Valley with a British edge. A scale-up Britain with global ambitions to lead the tech market and improve the world.?

UK strengths?

As Business Secretary, I recognise we have an extraordinary mix of assets in this country to help businesses on this mission. We host 4 of the world’s top 10 universities. We have a research-friendly regulatory environment now capable of greater speed and flexibility, in part due to Brexit.?

The international language of business is our mother tongue; we’ve announced the largest?R&D?budget in our history to become a science superpower; and the?ONS?recently revealed that the UK is investing close to 3% of?GDP?in research and development – significantly higher than previously thought.?

When it comes to scale-up finance, we are home to one of the world’s two biggest financial centres. We’re releasing ￡100 billion more through the Solvency II reforms that will be used for investment. We are number two in the world for business start-ups, and we are number one in Europe for venture capital investment.?

Put simply: no-one else has such a unique blend of advantages. But we have to bring them together to become more than the sum of those parts, to truly harness all our powers – if we’re to scale-up Britain and achieve our potential.?

Scale-up Summit?

To help us raise our game, we need to listen to a wider variety of entrepreneurs currently driving change. I will launch a Scale-up Summit to bring together key frontier tech, development and finance figures who have accelerated tech businesses from start-ups to scale-ups; and who can help us replicate their success in the UK, from Catford to Teeside.?

In particular, we want to hear from those who have achieved high growth, unicorn status, and experienced multiple exits. We will use the Summit to build networks and share expertise - and establish how best we can use our skills and strengths to spark the growth of tomorrow.?

Conclusion?

So, despite the prevailing economic news right now, this is no time to sit back and escape the problems of the outside world, as those first Davos visitors did half a century ago.?

The best way to confront those issues?is to get our economy growing. We in government know that this country can’t thrive unless its businesses are fit and flourishing too. That’s why the Prime Minister, the Chancellor and I are working flat out to not only recover from the toughest period in recent economic history, but also to prepare for the next 50 years of British innovation.?

That’s how we’ll scale-up our ambitions.?

And that’s how we will shape the future.?

Link to the full speech can be found here: https://www.gov.uk/government/speeches/davos-confederation-of-british-industry-cbi-british-business-leaders-lunch-speech-5