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Westlake Legal Group > Productivity

A Few Cities Have Cornered Innovation Jobs. Can That Be Changed?

There are about a dozen industries at the frontier of innovation. They include software and pharmaceuticals, semiconductors and data processing. Most of their workers have science or tech degrees. They invest heavily in research and development. While they account for only 3 percent of all jobs, they account for 6 percent of the country’s economic output.

And if you don’t live in one of a handful of urban areas along the coasts, you are unlikely to get a job in one of them.

Boston, Seattle, San Diego, San Francisco and Silicon Valley captured nine out of 10 jobs created in these industries from 2005 to 2017, according to a report released on Monday. By 2017, these five metropolitan regions had accumulated almost a quarter of these jobs, up from under 18 percent a dozen years earlier. On the other end, about half of America’s 382 metro areas — including big cities like Los Angeles, Chicago and Philadelphia — lost such jobs.

And the concentration of prosperity does not appear to be slowing down.

America’s deepening inequality has become a cause for alarm. The picture of a country cloven between a small set of prosperous urban “haves” and a large collection of “have-nots” has come sharply into focus as an opioid epidemic has overtaken vast swaths of the country. It gained the attention of the political class in 2016, when voters across the industrial heartland embraced Donald J. Trump’s populist message.

The search for ideas that could improve the economic conditions of deprived areas, long derided by economists as a fool’s errand — why spend money on improving the lot of places rather than people, many experts argued — is now at the top of policymakers’ lists.

The report is by Mark Muro and Jacob Whiton from the Brookings Institution’s Metropolitan Policy Program, and Rob Atkinson of the Information Technology and Innovation Foundation, a research group that gets funding from tech and telecom companies. They identified 13 “innovation industries” — which include aerospace, communications equipment production and chemical manufacturing — where at least 45 percent of the work force has degrees in science, tech, engineering or math, and where investments in research and development amount to at least $20,000 per worker.

The authors argue that a broad federal push is needed to spread the business of invention beyond the 20 cities that dominate it. “Hoping for economic convergence to reassert itself would not be a good strategy,” Mr. Muro said.

Westlake Legal Group innovation_maps-335 A Few Cities Have Cornered Innovation Jobs. Can That Be Changed? Urban Areas Research Productivity Metropolitan Policy Program, Brookings Institution Labor and Jobs Innovation Information Technology and Innovation Foundation Income Inequality

Metro areas that have

gained innovation jobs . . .

Gained the most

In thousands

Raleigh, N.C.

San Francisco

Madison, Wis.

Silicon Valley

Salt Lake City

Charleston, S.C.

. . . and those that

have lost them.

Lost the most

In thousands

Wichita, Kan.

Oxnard, Calif.

Los Angeles

Albuquerque

Colorado Springs

Durham, N.C.

Philadelphia

Washington

Westlake Legal Group innovation_maps-600 A Few Cities Have Cornered Innovation Jobs. Can That Be Changed? Urban Areas Research Productivity Metropolitan Policy Program, Brookings Institution Labor and Jobs Innovation Information Technology and Innovation Foundation Income Inequality

Metro areas that have gained

innovation jobs . . .

Gained the most

In thousands

Lost the most

In thousands

Wichita, Kan.

Oxnard, Calif.

San Francisco

Raleigh, N.C.

Los Angeles

Albuquerque

Madison, Wis.

Colorado Springs

Silicon Valley

Durham, N.C.

Philadelphia

Salt Lake City

Washington

Charleston, S.C.

. . . and those that

have lost them.

Westlake Legal Group innovation_maps-1050 A Few Cities Have Cornered Innovation Jobs. Can That Be Changed? Urban Areas Research Productivity Metropolitan Policy Program, Brookings Institution Labor and Jobs Innovation Information Technology and Innovation Foundation Income Inequality

Metro areas that have gained

innovation jobs . . .

. . . and those that

have lost them.

In thousands

Gained the most

Lost the most

In thousands

Wichita, Kan.

Oxnard, Calif.

San Francisco

Raleigh, N.C.

Los Angeles

Albuquerque

Madison, Wis.

Colorado Springs

Silicon Valley

Durham, N.C.

Philadelphia

Salt Lake City

Washington

Charleston, S.C.

Data are the change in jobs from 2005 to 2017 in 13 industries including scientific research and development services, Aerospace product and parts manufacturing and Software publishers.

Source: Brookings Institution analysis of Emsi data

By Karl Russell

Expanding the knowledge economy across all of America might indeed be a fool’s errand. As Mr. Atkinson noted, Erie, Pa., and Flint, Mich., might never attract the Googles or Apples of the world. But midsize cities like St. Louis, Pittsburgh and Columbus, Ohio, could feasibly transform into hubs of technological entrepreneurship.

The report’s authors propose identifying eight to 10 cities, far from the coasts, that already have a research university and a critical mass of people with advanced degrees. The government would then spend about $700 million a year for research and development in each of them for a decade. Lawmakers could give high-tech businesses that set up shop in these cities tax and regulatory breaks. Mr. Atkinson suggested a limited break from antitrust law to allow businesses to coordinate location decisions.

Battling the forces driving concentration will be tough. Unlike the manufacturing industries of the 20th century, which competed largely on cost, the tech businesses compete on having the next best thing. Cheap labor, which can help attract manufacturers to depressed areas, doesn’t work as an incentive. Instead, innovation industries cluster in cities where there are lots of highly educated workers, sophisticated suppliers and research institutions.

Unlike businesses in, say, retail or health care, innovation businesses experience a sharp rise in the productivity of their workers if they are in places with lots of other such workers, according to research by Enrico Moretti, who is an economist at the University of California, Berkeley, and others.

Other industries and workers are also better off if they have the good fortune of being near leading-edge companies. The report points out that the average output per worker in the 20 cities with the most employment in the 13 high-tech industries is $109,443, one-third more than in the other 363 metros across the country.

The cycle is hard to break: Young educated workers will flock to cities with large knowledge industries because that’s where they will find the best opportunities to earn and learn and have fun. And start-ups will go there to seek them out.

Even skyrocketing housing costs have not stopped the concentration of talent in a few superstar cities. High-tech companies that seek cheaper places to set up beyond their hubs often go to Bangalore, India, rather than Birmingham, Ala.

“They keep the core team in Silicon Valley or Seattle but put the other stuff in Shenzhen or Vancouver or Bangalore,” Mr. Atkinson said. Shenzhen, China, may not be much cheaper than Indianapolis, he added, but Shenzhen is already a tech hub in its own right.

Westlake Legal Group innovation-productivity-335 A Few Cities Have Cornered Innovation Jobs. Can That Be Changed? Urban Areas Research Productivity Metropolitan Policy Program, Brookings Institution Labor and Jobs Innovation Information Technology and Innovation Foundation Income Inequality

Annual output

per worker

Health care

Basic manufacturing

Innovation industries

Innovation jobs in the most

concentrated metro areas

are the most productive.

For metro areas in the bottom 75%

of employment in each sector.

Westlake Legal Group innovation-productivity-600 A Few Cities Have Cornered Innovation Jobs. Can That Be Changed? Urban Areas Research Productivity Metropolitan Policy Program, Brookings Institution Labor and Jobs Innovation Information Technology and Innovation Foundation Income Inequality

Annual output per worker

Innovation

industries

Basic

manufacturing

Health care

Innovation jobs in the most

concentrated metro areas

are the most productive.

For metro areas in the bottom 75% of employment in each sector.

Source: Brookings Institution and Information Technology and Innovation Foundation analysis of Emsi data

By Karl Russell

It is uncertain whether government support could pull innovation out of the clutches of superstar cities. The proposal by Brookings and the Information Technology Foundation will not come cheap: They estimate a $100 billion price tag over 10 years.

The payoff, however, would extend beyond the new technology hubs. Jon Gruber, an economist at the Massachusetts Institute of Technology, noted that in a world where Cincinnati becomes a hub of entrepreneurship, “we don’t need to fix opioid country” in Appalachia. That’s because many of those areas are within commuting distance of Cincinnati.

What’s more, not trying also entails risks. In his book “Jump-Starting America,” Mr. Gruber and his co-writer, M.I.T.’s Simon Johnson, argue for a sustained national effort to seed new technology clusters widely. Without federal government support, Mr. Gruber said, the United States is unlikely to produce many new high-tech hubs.

The risk, he said, is not only that much of America will be left to founder as superstar cities become more congested and less affordable. Political support for publicly funded research will crumble unless more of the country enjoys the benefits from innovation.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

A Few Cities Have Cornered Innovation Jobs. Can That Be Changed?

There are about a dozen industries at the frontier of innovation. They include software and pharmaceuticals, semiconductors and data processing. Most of their workers have science or tech degrees. They invest heavily in research and development. While they account for only 3 percent of all jobs, they account for 6 percent of the country’s economic output.

And if you don’t live in one of a handful of urban areas along the coasts, you are unlikely to get a job in one of them.

Boston, Seattle, San Diego, San Francisco and Silicon Valley captured nine out of 10 jobs created in these industries from 2005 to 2017, according to a report released on Monday. By 2017, these five metropolitan regions had accumulated almost a quarter of these jobs, up from under 18 percent a dozen years earlier. On the other end, about half of America’s 382 metro areas — including big cities like Los Angeles, Chicago and Philadelphia — lost such jobs.

And the concentration of prosperity does not appear to be slowing down.

America’s deepening inequality has become a cause for alarm. The picture of a country cloven between a small set of prosperous urban “haves” and a large collection of “have-nots” has come sharply into focus as an opioid epidemic has overtaken vast swaths of the country. It gained the attention of the political class in 2016, when voters across the industrial heartland embraced Donald J. Trump’s populist message.

The search for ideas that could improve the economic conditions of deprived areas, long derided by economists as a fool’s errand — why spend money on improving the lot of places rather than people, many experts argued — is now at the top of policymakers’ lists.

The report is by Mark Muro and Jacob Whiton from the Brookings Institution’s Metropolitan Policy Program, and Rob Atkinson of the Information Technology and Innovation Foundation, a research group that gets funding from tech and telecom companies. They identified 13 “innovation industries” — which include aerospace, communications equipment production and chemical manufacturing — where at least 45 percent of the work force has degrees in science, tech, engineering or math, and where investments in research and development amount to at least $20,000 per worker.

The authors argue that a broad federal push is needed to spread the business of invention beyond the 20 cities that dominate it. “Hoping for economic convergence to reassert itself would not be a good strategy,” Mr. Muro said.

Westlake Legal Group innovation_maps-335 A Few Cities Have Cornered Innovation Jobs. Can That Be Changed? Urban Areas Research Productivity Metropolitan Policy Program, Brookings Institution Labor and Jobs Innovation Information Technology and Innovation Foundation Income Inequality

Metro areas that have

gained innovation jobs . . .

Gained the most

In thousands

Raleigh, N.C.

San Francisco

Madison, Wis.

Silicon Valley

Salt Lake City

Charleston, S.C.

. . . and those that

have lost them.

Lost the most

In thousands

Wichita, Kan.

Oxnard, Calif.

Los Angeles

Albuquerque

Colorado Springs

Durham, N.C.

Philadelphia

Washington

Westlake Legal Group innovation_maps-600 A Few Cities Have Cornered Innovation Jobs. Can That Be Changed? Urban Areas Research Productivity Metropolitan Policy Program, Brookings Institution Labor and Jobs Innovation Information Technology and Innovation Foundation Income Inequality

Metro areas that have gained

innovation jobs . . .

Gained the most

In thousands

Lost the most

In thousands

Wichita, Kan.

Oxnard, Calif.

San Francisco

Raleigh, N.C.

Los Angeles

Albuquerque

Madison, Wis.

Colorado Springs

Silicon Valley

Durham, N.C.

Philadelphia

Salt Lake City

Washington

Charleston, S.C.

. . . and those that

have lost them.

Westlake Legal Group innovation_maps-1050 A Few Cities Have Cornered Innovation Jobs. Can That Be Changed? Urban Areas Research Productivity Metropolitan Policy Program, Brookings Institution Labor and Jobs Innovation Information Technology and Innovation Foundation Income Inequality

Metro areas that have gained

innovation jobs . . .

. . . and those that

have lost them.

In thousands

Gained the most

Lost the most

In thousands

Wichita, Kan.

Oxnard, Calif.

San Francisco

Raleigh, N.C.

Los Angeles

Albuquerque

Madison, Wis.

Colorado Springs

Silicon Valley

Durham, N.C.

Philadelphia

Salt Lake City

Washington

Charleston, S.C.

Data are the change in jobs from 2005 to 2017 in 13 industries including scientific research and development services, Aerospace product and parts manufacturing and Software publishers.

Source: Brookings Institution analysis of Emsi data

By Karl Russell

Expanding the knowledge economy across all of America might indeed be a fool’s errand. As Mr. Atkinson noted, Erie, Pa., and Flint, Mich., might never attract the Googles or Apples of the world. But midsize cities like St. Louis, Pittsburgh and Columbus, Ohio, could feasibly transform into hubs of technological entrepreneurship.

The report’s authors propose identifying eight to 10 cities, far from the coasts, that already have a research university and a critical mass of people with advanced degrees. The government would then spend about $700 million a year for research and development in each of them for a decade. Lawmakers could give high-tech businesses that set up shop in these cities tax and regulatory breaks. Mr. Atkinson suggested a limited break from antitrust law to allow businesses to coordinate location decisions.

Battling the forces driving concentration will be tough. Unlike the manufacturing industries of the 20th century, which competed largely on cost, the tech businesses compete on having the next best thing. Cheap labor, which can help attract manufacturers to depressed areas, doesn’t work as an incentive. Instead, innovation industries cluster in cities where there are lots of highly educated workers, sophisticated suppliers and research institutions.

Unlike businesses in, say, retail or health care, innovation businesses experience a sharp rise in the productivity of their workers if they are in places with lots of other such workers, according to research by Enrico Moretti, who is an economist at the University of California, Berkeley, and others.

Other industries and workers are also better off if they have the good fortune of being near leading-edge companies. The report points out that the average output per worker in the 20 cities with the most employment in the 13 high-tech industries is $109,443, one-third more than in the other 363 metros across the country.

The cycle is hard to break: Young educated workers will flock to cities with large knowledge industries because that’s where they will find the best opportunities to earn and learn and have fun. And start-ups will go there to seek them out.

Even skyrocketing housing costs have not stopped the concentration of talent in a few superstar cities. High-tech companies that seek cheaper places to set up beyond their hubs often go to Bangalore, India, rather than Birmingham, Ala.

“They keep the core team in Silicon Valley or Seattle but put the other stuff in Shenzhen or Vancouver or Bangalore,” Mr. Atkinson said. Shenzhen, China, may not be much cheaper than Indianapolis, he added, but Shenzhen is already a tech hub in its own right.

Westlake Legal Group innovation-productivity-335 A Few Cities Have Cornered Innovation Jobs. Can That Be Changed? Urban Areas Research Productivity Metropolitan Policy Program, Brookings Institution Labor and Jobs Innovation Information Technology and Innovation Foundation Income Inequality

Annual output

per worker

Health care

Basic manufacturing

Innovation industries

Innovation jobs in the most

concentrated metro areas

are the most productive.

For metro areas in the bottom 75%

of employment in each sector.

Westlake Legal Group innovation-productivity-600 A Few Cities Have Cornered Innovation Jobs. Can That Be Changed? Urban Areas Research Productivity Metropolitan Policy Program, Brookings Institution Labor and Jobs Innovation Information Technology and Innovation Foundation Income Inequality

Annual output per worker

Innovation

industries

Basic

manufacturing

Health care

Innovation jobs in the most

concentrated metro areas

are the most productive.

For metro areas in the bottom 75% of employment in each sector.

Source: Brookings Institution and Information Technology and Innovation Foundation analysis of Emsi data

By Karl Russell

It is uncertain whether government support could pull innovation out of the clutches of superstar cities. The proposal by Brookings and the Information Technology Foundation will not come cheap: They estimate a $100 billion price tag over 10 years.

The payoff, however, would extend beyond the new technology hubs. Jon Gruber, an economist at the Massachusetts Institute of Technology, noted that in a world where Cincinnati becomes a hub of entrepreneurship, “we don’t need to fix opioid country” in Appalachia. That’s because many of those areas are within commuting distance of Cincinnati.

What’s more, not trying also entails risks. In his book “Jump-Starting America,” Mr. Gruber and his co-writer, M.I.T.’s Simon Johnson, argue for a sustained national effort to seed new technology clusters widely. Without federal government support, Mr. Gruber said, the United States is unlikely to produce many new high-tech hubs.

The risk, he said, is not only that much of America will be left to founder as superstar cities become more congested and less affordable. Political support for publicly funded research will crumble unless more of the country enjoys the benefits from innovation.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Andrew Smith: Invest in regeneration. How the next Conservative Government can deliver for the North.

Andrew Smith is a Conservative Councillor in Westminster and a consultant for Cicero Group. He writes in a personal capacity

The North is the key battleground in the general election. The path to delivering a Conservative majority runs through a ‘red wall’ of Leave supporting Labour seats, running from North Wales through the North West, Yorkshire and the North East.

As someone born and brought up in Bradford in Yorkshire who came to political consciousness during the years of Eric Pickles’ leadership of Bradford City Council, I know that that the Conservative message can have a strong appeal to towns and cities of the North.

Many of these areas have faced real economic hardship due to economic change. One of the reasons for the strong Leave vote in many of these seats was the sense that these areas had been left behind. Once proud industrial heartlands have suffered from the loss of skilled jobs.

Our Conservative approach needs to be focused on offering a different future for these areas. As well as the promise to deliver on the Prime Minister’s Brexit deal, we need to show how our approach to the economy can help to support growth in the North.

Conservative support for rebalancing of the economy and revitalising areas which have suffered from industrial decline is showing signs of success. Just one example is Rotherham’s Advanced Manufacturing Park. Now home to world-beating research and production, from firms such as McLaren and Boeing.

In his speech to the CBI this week, the Prime Minister set out how he wants to build on that success. He set out a positive vision of how a future Conservative Government can deliver for the North, through investment in public services, and better connectivity through fast broadband and 5G.

Transport infrastructure, unlocking investment was at the heart of Boris Johnson’s success in London. Now as Prime Minister, he made it clear that he wants to deliver the kind of investment in regeneration that he delivered as Mayor of London across all areas of the country.

He spoke about Northern Powerhouse Rail, which promises to transform the economy of the North though highspeed rail connections between the economic centres of the region. Hopefully with a station for my home city of Bradford.

Investment in buses and local road improvements were also part of the offer. This is spot as buses are too often neglected in the national policy debate. Investment in better bus service would bring huge economic benefits, especially in areas outside of London.

One issue which Johnson didn’t mention but needs to be part of our offer to the North is HS2. As someone born and brought up in Yorkshire, I been a long-term supporter of the project. While the scheme might be unpopular in the Chilterns it has strong support amongst business and the public in the North and the Midlands. It is a shame that uncertainty about its future is likely to linger with the publication of the independent review of the scheme delayed until after the general election.

The message from the North has been clear: both HS2 and Northern Powerhouse Rail are important for the future of the region. It seems that the Prime Minister agrees, and hopefully a clear commitment to both these schemes will make it into the manifesto.

He was able to set out this optimistic vison of supporting growth across the UK through investment in public services and infrastructure thanks to Sajid Javid’s plan to boost to investment spending while balancing the books on current spending.

Johnson’s “categorical assurance” that Javid will remain as Chancellor if we win the election is also good news for voters in the North. The Chancellor is northern-born, with a clear personal commitment to delivering investment which will boost economic growth.

Using low interest rates to fund investment to unlock the potential of the Northern Powerhouse was at the heart of his policy platform during his run for the leadership and clearly will continue to be a priority for him in the Treasury. I hope that we will see more of the Chancellor during the campaign explaining how his sensible economic plans can help support investment to boost productivity, while at the same time maintaining the Conservative’s record of fiscal discipline.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

James Cooper: Turbo-charging trade is about products, not productivity

James Cooper is the former Chief Executive of Associated British Ports.

For too long, the UK’s trade deficit has failed to attract the attention of UK policymakers. Yet the deficit clips our economic growth, reduces our pay cheques, and requisitions our savings.

So the Government’s announcement of its intention to create up to ten freeports around the UK is to be warmly welcomed.

Whilst I was at Associated British Ports (ABP), we were keen advocates of a “trade first” policy and firmly backed the idea of freeports. ABP wanted to bring “port-centric”, export-led manufacturing back to our deep sea ports. Blessed with great infrastructure and significant underutilised land banks in often deprived regions, they offer ideal locations to help redress three significant imbalances – imports vs exports; the north vs the south; and manufacturing vs services.

And while you might expect ABP to support measures that would encourage the growth of trade in physical goods, my personal position has always been that I don’t really care whether it is exporting an episode of Doctor Who, a bottle of whisky, an Aston Martin, or a degree from Imperial College – as a nation we need to pay our way in the world and we can do that by designing, making, and selling high quality products.

But our trade deficit, especially with the EU, tells its own story – while we excel in certain areas, sadly, we don’t excel in enough areas at scale. The Bank of England, Treasury, and a whole range of economic experts point to a shortfall in productivity as the British malaise. But I am not sure that they are aiming at the right target.

The real issue for the UK is not productivity but product. It’s not that we don’t know how to use Google efficiently, the problem is that we didn’t invent, finance, and sell Google. We need to move away from the focus on productivity, a focus which comes across as simply telling our workforce that they either have to work harder or work for less pay or a combination of both. These are the economics of a ‘tee-shirt economy’, and is that what we really want?

Instead we should be encouraging business to develop high-value, high-quality products that the world wants to buy. Every part of Government should be turning its hand to this endeavour. Yet the Government’s website for those wishing to file a patent advises in no uncertain terms that the process is “complicated”, “expensive” and “long”. We need to address that, to make a necessarily robust process simple, affordable, and swift.

And for those that battle their way through the process to create a commercially successful product, how do we facilitate their research of the overseas markets we need them to succeed in? We know that SMEs in particular see accessing overseas markets as expensive and risky. Government could do more to provide high quality advice to prospective exporters, and should consider subsidising international travel costs for SMEs. And what about reducing the rate of corporation tax on the export earnings of SMEs?

Those who build and maintain our infrastructure have a key role to play. Highways England and Network Rail should be specifically required to address the needs of trade (not just freight) in their planning. The Department for Transport should hold these state bodies to account for their role in supporting our exporters. New infrastructure – both physical and digital – that links British exporters to global markets needs to be built. As an island nation, our competitiveness and our ability to trade depends on connectivity.

Our educators need to focus on delivering a workforce capable of designing and making the quality products the world wants to buy. We should incentivise the development of creative, technical, language, and financial skills to the highest level, and the Apprenticeship Levy needs to be withdrawn and instead replaced with an incentive for business to deliver high-quality in work training.

The Treasury needs to embrace more policies that encourage our entrepreneurs and the UK’s world leading capital markets to build global giants at home, in the UK. We are too willing to sell our most successful young companies just at the moment they are poised for take-off, leaving the rewards of our creativity for others to reap. It’s a familiar point, so let’s get on with reforms that finally enable us to address the problem.

The UK’s trade deficit is currently £46bn per annum, a surplus in services partially masking a £150bn deficit in goods. This represents real cash flowing out of the UK, cash that is financed either by borrowing or by selling assets. It is one of the reasons we end up selling “crown jewels” to overseas buyers.

Just imagine if that flow was the other way, finding its way into people’s pay and pension funds and, yes, ultimately into the Government coffers that finance hospitals, schools, our police and military.

Our vision has to be creating a much more powerful British economy that sells high-quality, high-value goods made by a well-paid and highly skilled workforce. Every part of government, industry, education, finance, and society as a whole must share that vision and be willing to strain every sinew to achieve it.

This may be challenging but ultimately the lesson for the British economy is painfully simple; to improvise on James Carville’s refrain, “it’s the products, stupid”.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Neil O’Brien: How to rebalance Britain’s unbalanced economy – by levelling up, not levelling down

Neil O’Brien is MP for Harborough.

Even Brexit, it turns out, is about location, location, location. Ben Ansell, an Oxford professor, has found that in wealthier areas, where the price of a house averages £500,000, 70 per cent voted to remain. Poorer areas, where the average house price was £100,000, were an exact mirror image, with 70 per cent voting to leave.

Like a disclosing tablet, the EU referendum highlighted the different economic experiences of different places over recent decades: booming London and the most prosperous home counties voted to Remain, as did Scotland, the next richest part of the country. The reviving cores of our large cities did likewise. But smaller towns and cities, the countryside and coastal places voted overwhelmingly to Leave, as did Wales.

In response, Boris Johnson recently set out his ambition to “level up” poorer areas in a fantastic speech in Manchester. It’s the right thing to do – and it makes political sense too. The 2017 election saw us losing ground in wealthier-but-Remainy areas, and gaining former Labour seats in the midlands (and north) which we’d never gained before. We have huge potential to win in seats where people have felt taken for granted and left behind for many decades.

The economic case for levelling up is clear too. There are no G20 countries which have a more regionally imbalanced economy than the UK and are also richer than the UK. Conversely, all large countries that are richer per head than the UK have a more balanced economy.

In other words, a more balanced economy is a stronger one. In a highly unbalanced economy, resources like land and infrastructure end up overloaded in some parts of the country, and under-used in others, which is costly and wasteful. Given that workers (particularly lower skilled people) don’t simply move away from their families in the face of local economic problems, having greater distances between unemployed workers and job opportunities may well compound problems matching people to job opportunities. There might even be compounding mechanisms: if some areas have high unemployment that can lock in patterns of worklessness.

But to bring about a more balanced economy, there are two big lessons that the Prime Minister must draw from previous successes and failures.

First, the crucial thing is to attract private sector employment – particularly jobs that are knowledge and investment-intensive. The work of academics like Enrico Moretti and think tanks like the Centre for Cities shows how gaining “brain jobs” in the private sector has a much bigger multiplier effect than just moving public sector jobs to an area.

Tax breaks for inward investment can be very effective in attracting in new investment, which is why most other countries offer them. Within the UK, probably our most successful ever regional intervention was Margaret Thatcher luring Nissan to Sunderland with a mix of investment tax breaks, lobbying and the offer of cheap land (an old airfield). It’s now one of the most successful plants in the world.

When people think about regeneration, they often start with plans for a new tram or shiny cultural facility, which tend to be popular, and can indeed help growth in areas that are already motoring along. But such investments aren’t going to do much for areas where the economic engine has rusted up and needs restarting. Detroit famously built a fancy monorail intended to fight its economic decline: but in a city where every factory was gone it remained largely unused, drifting through a city that looked like it had been bombed flat. Without private sector investment, there’s no demand for it or anything much else.

Second, different things work in different places and a different set of policies are needed for our towns than our city centres. During the 1970s and 1980s the “inner cities” were a byword for decline. But in recent decades capital cities and the centres of other larger cities have outperformed other areas, right across the world. The shift from a manufacturing to a professional services economy (plus the growth of universities) revived the centres of our cities.

There are still many problems to solve in our cities, but the places that have struggled the most in recent decades have been rural areas, smaller towns and cities, and the outer parts of large cities (even outer London). Places on the coast and places without a university have suffered particularly badly from a brain drain. Labour have tried to capitalise on their discontent with glossy ads like their film “our town”.

What to do for towns is even trickier than helping big cities grow. Though there are trendy small towns from Hebden Bridge to Hay-on-Wye, simply copying ideas from big cities, like “culture-led regeneration”, is often a recipe for failure in small towns.

Improving connections between city centres and towns might help – Tom Forth has highlighted just how bad we are at this in Britain. The Prime Minister’s new fund to help regenerate town centres is a good move and will make them more attractive. We should do things like re-examine funding historic funding formulas for government spending on science, transport and housing, which are still heavily geared towards supporting London and other areas that are already growing fast. And we should offer devolved economic powers to counties, not just big cities.
The more we can use free market mechanisms to help poorer towns, the more likely we are to succeed.

Looking at Britain as a whole, chronically low investment rates are a big part of our long-term productivity problem. We should cut taxes on business investment across the whole country, and make the UK’s capital allowances among the most generous in the world (at present they’re among the least).

But to level up poorer areas we should go further, and have even more generous tax breaks for investment there, where the problem of low investment and low productivity is most severe. We should also empower the Department for International Trade to take part in the same aggressive tax competition for inward investment that countries in Asia, the US, and our neighbours in Ireland do so successfully. And we should use those tools to encourage inward investment into poorer places.

More generous capital allowances would help lagging regions anyway, even if introduced across the board. While manufacturing accounted for around a quarter of productivity growth nationally since 1997, it provided 40–50 per cent of productivity growth in poorer regions like Wales, the West Midlands and North West. Manufacturing requires roughly twice as much capital investment as the rest of the economy, so an investment-hostile tax system hits poorer places harder.

Ever since the referendum, there’s rightly been renewed focus on how to help poorer places. Helpfully there is decades of evidence about what does and doesn’t work. If we can join up an energetic new Prime Minister with the bit between his teeth, plus a new agenda for left-behind places, then we can really get things moving.

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Chris Skidmore: Creating the next Stanford or MIT of the future – right here in Britain

Chris Skidmore is Minister of State jointly at the Department for Education and the Department for Business, Energy and Industrial Strategy.  He is MP for Kingswood.

Britain’s universities are home to some of the world’s brightest and best minds. Scientists and researchers are hard at work cracking the toughest problems, from modelling the polar ice-sheets to developing new antibiotics. Their ground-breaking work inspires young people and changes people’s lives. We rank first or second on most metrics, coming only behind the US – a country with far bigger budgets. It’s a great British success story.

But other countries have taken note and are massively scaling up their own efforts. Just look at China: they’ve committed to spending a whopping five per cent of their GDP on R&D. South Korea has already reached 4.3 per cent. The UK lags way behind at just 1.7 per cent.

This isn’t just a twenty-first century ‘science race’, like the space race of the last century. It matters because investing in R&D is the best way for modern economies to raise productivity, especially in the face of increased global competition.  In 2016, the UK committed to reaching to 2.4 per cent by 2027. If we achieve this, it will revolutionise our economy. But it depends on getting two things right.

The first is about people. As we leave the EU, it is vital that the UK becomes even more attractive for international research talent. Earlier this year, we announced a new fast-track visa plan, designed to attract elite researchers and scientists to the UK.

And today, we are unveiling 78 new Future Leaders Fellows – helping early-career researchers to do their best work, benefitting from £78 million investment and access to our world-class universities.  These people are truly inspiring – relocating from all over the world to continue their amazing work right here in the UK, such as new research into ocean oxidisation, violence against women, quantum thermodynamics and self-driving cars.

And we want to go further – ensuring that job offers turn into lasting careers in research. This means cutting red tape, eliminating bullying and discrimination, and unlocking the creativity of everyone working in research, whether in universities or industry.

That brings me to my second point. Raising productivity is important for government. But it is arguably even more important for industry. Over two-thirds of our national R&D is paid for by private funds. That is a sign of its value to the market, proving that innovation is the path to growth.

I am determined that our private and public R&D systems should work together as effectively as possible. This means universities, government and industry working together to share risks and to convert great ideas into new businesses, new industries and new products and services.  Universities have shown themselves to be more than capable of playing their part. Just take the UK Research Partnership Investment Fund, where universities have secured over £2bn from industry and private sources into 54 projects right across the UK.

To build on this, I’m delighted that the government is today unveiling 20 new University Enterprise Zones. Established with £20 million of government funding, these new UEZs will be based in universities right across the country, from Falmouth to Sunderland.  These projects are all about creating a business-friendly environment, helping to build a bridge between academia and business. They will allow local start-ups to co-locate in universities, building the businesses of the future – inspired by university research.

In this way, the Government is supporting and encouraging strong relationships between our world-leading researchers and the business world that can best make use of their ideas.  By fostering effective university-business links, we too can create the Stanford or MIT of the future – right here in the UK – ensuring science and research remains a remarkable success story for many years to come.

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Daniel Rossall-Valentine: Tech now underpins prosperity in every sector – so to thrive, we need more engineers

Daniel Rossall-Valentine is Head of Campaign for This is Engineering at the Royal Academy of Engineering, and Deputy Chairman of Sevenoaks Conservative Association. He writes in a personal capacity.

“It’s the same formula: it is education, infrastructure and technology —those three things”, so said Boris Johnson in June when interviewed by the Evening Standard about his agenda for government. According to Boris, those are the three principles which informed his time as Mayor of London and will be his priorities as Prime Minister.

These priorities are very welcome because they recognise the essential connections between three vital elements of wealth generation, and represent a more sophisticated view of economic growth than the one-dimensional and idealistic catchphrase of “education, education, education” which prevailed under a previous government.

The UK is involved in a long running battle to raise its productivity. We have long needed a better vision of what we need to do to boost productivity and I believe that this vision is now being developed.

Engineers and technicians must be at the heart of this new vision. Engineers are essential for innovation, they design, build and improve technology and have become central to national productivity, economic growth and living standards. Engineers are the people who turn scientific principles into practical application, social benefit and economic value. Our world is being unified in a new way; by a series of threats that know no borders. We face big challenges, including overpopulation, environmental degradation, malnutrition, biodiversity loss, cyber-terrorism and global warming, and technology is central to building solutions for each of these and making our world work better for everyone.

In truth, technology is not a sector anymore; it is now the driver of productivity and economic success (and indeed survival) for organisations in every sector. The analytical and design skills of engineers have become more and more valuable as the rate of technological change accelerates. No sector of the economy is now protected from the forces of technological change; healthcare, agriculture, retail, and education are just four examples of sectors which are currently experiencing rapid technological change; change that offers significant improvements in productivity and benefits for users.

Growing our domestic tech capacity offers great benefits to the UK. Tech firms have shown that they can scale very rapidly. The rise of “tech unicorns” (recent startups valued at over $1 billion) demonstrates the economic and social potential offered by tech. Engineering has been proven to be a very effective multiplier of economic growth. The UK should not be modest about its future in tech because we have significant advantages, including a trusted legal regime, access to capital and credit, access to support services, unparalleled access to tech customers, an educated workforce, world class universities, stable taxation and intelligent regulation.

However, the UK has one great and persisting tech weakness which threatens to impede our growth, and that is an inadequate number of engineers and technicians. The UK needs to grow its pool of engineering talent, to ensure that UK-based tech companies can remain in the UK as they scale rapidly, and to enable engineering companies to win big projects. If the UK doesn’t expand its pool of engineering talent we risk losing tech firms, tech projects and tech investment and the huge economic and social value that they bring. The proportion of jobs that require technical skill is growing and Britain should aspire to a growing share of this growing pie.

Young people are avid consumers of technology, but we need more of them to aspire to mastering the engineering that underpins the technology so that they can become developers, makers and creators of technology, rather than mere users. We also need more young people who combine engineering skills with the entrepreneurial and managerial skills that will enable them to form and scale business enterprises; so that the UK can capture an increasing share of lucrative engineering value-chains; and provide the GDP and employment that flow from end-to-end technology development. Increasingly people who are not tech-savvy are at risk of being automated out of a job, so the need for upskilling the UK in technical skills is pressing.

This technical skills shortage has long been recognised and a multitude of projects have been started to encourage young people to consider engineering. And yet despite the number of initiatives, the shortfall of talent has not only persisted but seems to have grown larger over the last decade. We also need to diversify our talent pool and ensure we are attracting young people from all backgrounds; because only a diverse profession guarantees the diversity of ideas that technical fields rely on.

The UK has made good progress in raising the profile of engineering in the last few years. The Industrial Strategy and Grand Challenges of 2017 were very welcome developments at putting technology centre-stage. The Year Of Engineering 2018 led to a very significant change in the perception of engineering amongst school pupils. This year-long Government campaign also encouraged greater collaboration between the many professional engineering institutions that make up the UK’s complex engineering landscape. We can be optimistic that the UK has got into the good habit of paying far more recognition to the engineers and entrepreneurs who enable, create and democratise the technology which improves lives, saves time and generates wealth.

Too often we allow our natural British reserve about talking about wealth to prevent us talking about wealth creation. Social benefit and commercial success are too often portrayed as trade-offs, when they are mutually reinforcing; the best technology delivers for investors as well as society-at-large. Technological success is a stool with three legs; technical progress, commercial success and social benefit. Technology is more than technology: technology is inherently social, and inherently financial, and we need more technologists who look at the full picture rather than the purely technical aspects of technology. Without profit, technology is the greatest creator of loss and debt known to mankind, and without social benefit technology can be a force of social division, rather than a democratising force.

To maximise the benefits of technology we need to close the technology skills gap, and this requires action by many players. We cannot rely on Government alone to solve this persistent problem. We know that too few young people are studying engineering related degrees and apprenticeships. One major factor is the image of engineering. Unfortunately, a number of unappealing stereotypes have become attached to the profession of engineering. Many young people assume that engineering involves hard, manual work, and male-dominated workplaces. Too many young people also believe that engineering is a narrow specialism that offers only a limited range of job opportunities. The problem is particularly acute with female students. Inspiring more girls to pursue STEM subjects and careers will not only help us to address the skills gap in science and technology, but it will also help us to create a more diverse workforce that truly represents the world we live in.

The UK has a great tradition of innovation and enterprise but only by unlocking the interest of our young people by presenting a positive vision of business enterprise and technology can we continue to succeed in this increasingly competitive field. One recent example of success is the This is Engineering campaign which was developed by a number of the UK’s leading technology companies and launched in January 2018. The campaign presents young people with positive, modern, authentic images of careers in technology and engineering, through the medium of short films which are available on many social media platforms. The films also highlight the societal benefits that new technology delivers, the team-work that technology and engineering projects rely on, and the creativity that is required at every stage in the design and build process.

By helping to promote careers in technology and engineering we can ensure that more and more young people see technology not just as a range of products to be consumed but also as a range of careers to be considered.

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In an Industrial Corner of France, 18,000 Jobs Are On Offer. Why Aren’t People Taking Them?

OYONNAX, France — Along a vast alpine plain, hundreds of factories are cranking out plastic perfume bottles, automobile parts and industrial tools. Trucks chug through mountains ferrying thousands of ready-made wares for export. On billboards and warehouses, “We’re hiring!” signs flutter in the breeze.

Jobs are plentiful in Ain, a sprawling manufacturing region in eastern France known as “Plastics Valley.” But companies in this forested frontier across from Switzerland have slowed production because they cannot find enough workers for a production line that increasingly requires computer and digital know-how.

“It’s a brake on competitiveness,” said Georges Pernoud, the president of Groupe Pernoud, whose company makes injection molding for plastic parts for BMW and other automakers. He said he has turned away contracts worth nearly a million euros in the past two years because he couldn’t find skilled people here or anywhere in France who wanted a factory job.

ImageWestlake Legal Group merlin_158029035_703f5e6a-2117-4ef9-9cc6-aa5a74a20579-articleLarge In an Industrial Corner of France, 18,000 Jobs Are On Offer. Why Aren’t People Taking Them? Unemployment Shortages Productivity Macron, Emmanuel (1977- ) Income Inequality France Factories and Manufacturing Europe

George Pernoud, 53, heads the George Pernoud group which produces metal molds for the plastic industry.CreditAndrea Mantovani for The New York Times

“We need more tech-savvy employees,” Mr. Pernoud said, pointing to a glass-encased robotic machine on his factory floor programmed by a worker to produce a precision steel mold. “But not enough people are willing to take these jobs.”

France, like many countries in Europe, has a labor problem. But in a nation where thousands of people took to the streets in the Yellow Vest movement to protest income inequality and a lack of economic opportunity, there is a peculiar twist.

Despite an unemployment rate of over 8 percent — the highest in Europe after Italy, Spain and Greece — over a quarter of a million jobs are unfilled. Businesses can’t find people to work as plumbers, engineers, waiters, cooks. The list goes on.

Nowhere is the challenge as stark as in manufacturing, where nearly 40 percent of companies cite a dearth of manpower. In Ain, which specializes in making plastic goods and machinery parts, at least 18,000 jobs are on offer.

The plastics industry faces a hard sell as concerns mount over the environmental impact of a throwaway culture.CreditAndrea Mantovani for The New York Times

France needs a solution quickly. After recovering from a double-dip recession during the financial crisis, the economy is slowing again, this time from a 1.7 percent expansion as Europe’s recovery cools. Manufacturing isn’t contributing as much to growth as it could because of the labor problem, Agnès Pannier-Runacher, France’s economy minister, has warned.

She recently began a campaign to enhance the industry’s appeal, featuring a 20-foot inflatable plastic rooster, a symbol of French pride. The rolling caravan, called the “French Fab” tour, showcases factories as hubs for high tech.

Employers say manufacturing has an image problem after decades of cheap competition from Asia and Eastern Europe shuttering factories across France. The industry has shrunk to 10 percent of the economy today from 25 percent in the 1960s. Recent factory closures at Ford, Alstom and Whirlpool have added to an image of woe.

Labor unions say the issue is not a shortage of workers, but that companies pay low wages and then complain about a lack of labor. If companies increased pay, unions argue, they would find employees.

PRP Creation makes 75 million bottles a year for famous cosmetic brands like Chanel and Dior.CreditAndrea Mantovani for The New York Times

Others say France’s predicament is more complicated.

“The real problem is that French industry is still not as modernized as elsewhere in Europe,” said Patrick Artus, the chief economist of Natixis Bank, based in Paris. “That has lead to low productivity, which prevents companies from raising salaries,” he said. Manufacturers need to ramp up investments, he added.

President Emmanuel Macron is trying to clear roadblocks, in part by modernizing the national vocational system. Only around a third of French students pursue vocational training or apprenticeships, which are seen as leading to unprestigious work in a country that prizes academics and white-collar careers.

By contrast, in Germany, Europe’s manufacturing powerhouse, the industry is seen in a positive light. Around half its 16- to 24-year-olds enter apprenticeships that include hands-on work at Siemens, Daimler and other name brands. In France, manufacturers say, the training is less intensive and no longer produces enough people with skills for the current crop of jobs

Mr. Macron’s reform lifts the age limit for apprenticeships to 30 from 25 and makes it easier for people to qualify for and keep them. The government also plans to reimburse companies for apprentice work contracts. One million low-skilled job seekers and one million young people from disadvantaged backgrounds will be offered training in digital technologies. France’s generous jobless benefits are being tightened to return people to the work force more quickly.

The city council is trying to appeal to new inhabitants by promoting the quality of life thanks to its picturesque places and neighboring landscapes.CreditAndrea Mantovani for The New York Times

But in Ain, and elsewhere, the efforts aren’t producing results fast enough.

This area became a hub for plastics-making in the 1920s when companies made fashionable combs and hair accessories. Activity expanded after World War II as demand for plastics, tools and machinery drove a surge in manufacturing.

Oyonnax, one of Ain’s biggest cities, grew wealthy as the factories expanded. In the early 1980s, locals recall, the largest concentration of Ferraris in France was found here.

But French industry proved no match for globalization and did not adjust to competition from countries with lower labor costs and tax rates. Europe’s financial crisis forced companies to modernize quickly. French factories are now scrambling for programmers and coders to run increasingly automated machinery. “We’re struggling to convince people that the work isn’t the same as decades ago,” said Damien Petitjean, the director of the Lycée Arbez Carme, the main high school in Oyonnax.

The plastics industry in particular faces a hard sell, said Mr. Petitjean, as concerns mount over the environmental impact of a throwaway culture.

PRP Creation employs 175 workers, 50 of which were hired in the last two years.CreditAndrea Mantovani for The New York Times

The Oyonnax school once specialized in training for industrial jobs. In the 1970s, it shifted to a general curriculum, mirroring the decline of manufacturing. Today it has swung back to offering technical diplomas, working in partnership with companies and research institutes.

Yet only half its 1,100 students pursue such degrees, Mr. Petitjean said. And last year, only 40 entered the plastics industry.

Pay is one big reason.

Industrial salaries have risen gradually for the last 20 years and increased about 2 percent last year. Still, entry-level workers earn just a couple hundred euros more than France’s monthly minimum wage of 1,521 euros a month. Small and medium-sized businesses, the backbone of French industry, say they can’t offer more because they must make a hefty contribution toward France’s social safety net, which provides health care, education and unemployment.

“In France, employer taxes amount to 40 percent of a worker’s salary,” said Stéphane Vandenabeele, the managing director of UNT, which makes precision tools for eyewear and watches. He recently lost a skilled employee to a competitor in Switzerland that offered nearly twice the 2,800 euro after-tax salary he paid. With Swiss employer taxes of just 12 percent, he said, he couldn’t match the price.

This area became a hub for plastics-making in the 1920s when companies made fashionable combs and hair accessories.CreditAndrea Mantovani for The New York Times

Employers in Plastics Valley try, increasingly, to poach workers from other companies or devise creative workarounds.

Mr. Pernoud, the producer of plastics injection molds, hired a technician from Portugal to fill one of a dozen openings at his 110-person operation. Although he pays up to 3,000 euros a month for engineers, there are few takers. But that’s good money in Portugal, where the average monthly wage is around 1,900 euros, Mr. Pernoud said. He hopes to hire four more — quickly.

“I have no choice but to look abroad,” he said. “I can’t develop my business otherwise.”

Ten minutes away, PRP Creation, which makes plastic cosmetics containers for luxury groups including Dior, Chanel and Estee Lauder, has found a partial solution by placing job ads on Facebook, Twitter and LinkedIn.

The chief executive, Joël Viry, said many of the 175 jobs on his floor are on a classic production line. He attracted workers by establishing good managerial relations. The son of a boilermaker, he regularly walks the floor to converse with employees, who include older workers and over 30 nationalities. At any given time, at least 40 young people on interim contracts work in the factory to gain experience.

Mohamed El Hmidi, 23, has worked mostly in construction and at odd jobs.CreditAndrea Mantovani for The New York Times

Other companies, worried that government reforms will take time, are pooling resources to create their own training programs.

At LMT Belin, a producer of tools for the plastics, auto and aerospace industries, the chief executive, Bertrand Lefevre, teamed up with five companies to provide hands-on work experience for the unemployed. On a recent afternoon, eight young men trained on how to program robotic equipment, hovering over a machine churning out high-performance drill bits.

Mohamed El Hmidi, 23, had worked mostly in construction and at odd jobs. He landed in Oyonnax’s unemployment office a few months ago and heard about training at LMT Belin. He jumped at the opportunity.

“This is our future,” said Mr. El Hmidi, nodding at the factory floor, where workers were monitoring computer-powered machines. He had already rotated through the other four factories that had combined forces with LMT Belin. “Here, we’re getting exposure to new technologies,” he said.

For Mr. Lefevre, it was a small victory in a larger battle for economic survival.

“We can’t just keep complaining there’s no one to hire,” he said. “We have to make it happen ourselves.”

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Patrick Spencer: Some advice for the new Conservative leader. Stick to these three ideas to boost productivity.

Patrick Spencer is Head of Work and Welfare at the Centre for Social Justice.

The Conservative leadership contest has proved to be the battle of ideas that the party wants, needs and should probably have had back in 2016. Yes, Brexit has dominated the discussion, but in amongst chat of proroguing, No Deals and backstops, we have heard interesting ideas about, for example, tax reform, a national citizens’ service and early years support for young mothers. During the Parliamentary stage of the contest, the Centre for Social Justice hosted the Social Justice Caucus of Tory MPs, holding their own hustings event for the Conservative leadership, and the candidates didn’t disappoint.

The litany of new ideas stem from the fact that most of the candidates felt it is time to reshape the Government’s fiscal strategy. The last nine years have been defined by successive Coalition and Conservative government’s support for fiscal rebalancing. David Cameron and George Osborne successfully formed governments after two general elections on a platform of fiscal prudence.

However, the political landscape has changed. Younger voters who weren’t around to vote in 2010 now make up a sizeable chunk of the electorate. Years of austerity, job growth and a much healthier national balance sheet has meant that ‘austerity’ is increasingly unpopular.  Combine this with the perceived economic harm that a No Deal Brexit may cause, and the case for loosening austerity is compelling.

In this vein, Boris Johnson has argued for lower taxes on higher earners as well as increased spending on education. Esther McVey wanted to cut the International Aid budget and spend savings on the police and education. Dominic Raab called to raise the National Insurance Threshold and cut the basic rate of income tax. Michael Gove hoped to reform VAT so that it becomes a Sales Tax. And Sajid Javid said he would slow the rate of debt reduction, which would free up £25 billion for new spending commitments.

Even outside of the leadership circle, Tory MPs and right-of-centre think tanks are advocating for a new spending strategy.  Neil O’Brien has coined the ‘O’Brien Rule’, which allows for budget deficits as long as debt as a percentage of GDP is falling. This sentiment was echoed by Philip Hammond, who called on every leadership candidate to commit to keeping the deficit under two per cent of GDP as long as the national debt was falling.

Considering the appetite to do something, the next leader of the Conservative Party and Prime Minister should be warned that spending for spending’s sake is not a good idea. If the decision is taken therefore to loosen the fiscal taps, it should be carefully targeted so that this increases growth and more importantly, productivity.

The Centre for Social Justice released a report in 2017 that highlighted a clear policy agenda that used tax and spend policies to boost productivity across the UK. It is roundly recognised that the productivity conundrum in the UK has not been the result of any one issue but, rather, is a confluence of factors that have taken hold of our economic and social machine.

First and foremost, British companies do not invest and innovate enough. Compared to other countries we have lower levels of capital investment, lower uptake of new-generation technologies such as robotics, and entrepreneurs sell out too early. Britain has a proud history of innovation and technology, and yes we do have several world beating unicorn companies, but in recent years we have lost ground in the innovation stakes to the US, Germany and the Asian economies.

The CSJ recommended a raft of policies that could help reverse this, starting with a ramp up in public funds available for research and development. Public cash for R+D has a crowding in (as opposed to crowding out) effect. We also called (counter-intuitively) for the scrapping of Entrepreneurs Tax Relief. It is expensive and does little to help real entrepreneurs, and only acts as a tax loophole for asset strippers (this policy has recently been advocated by the Institute for Fiscal Studies and the Resolution Foundation). We also called for simplification of the tax system. Look at the Annual Investment Allowance, for instance, that was decreased by 75 per cent in 2012, increased by a factor of 10 in 2013, doubled in 2015, only for it to then be almost cut in half in 2016.

Second, the CSJ called for a radical increase in support for vocational education in the UK. While businesses needed some help to innovate and compete, the labour market needs support in terms of skills and competencies. Recommendations included a new spending commitment for FE colleges and more support for adult learners who are in low skilled work. The Augar Review called for the Government to make £1 billion available for colleges, a good start but realistically the Government will have to go much further in the future. here is an example of where public money can make a big difference in public policy.

Last, if the next Prime Minister wants to support productivity growth, they can look at rebalancing growth outside of London across Britain’s regions. London is home to less than a quarter of the UK’s population but contributes to 37 per cent of our economic output. It attracts a disproportionate number of high skilled and high paying jobs. Public spending on infrastructure in London dwarfs that spent in the North and Midlands. Reversing this trend will of course take a generation, but by boosting transport spending on inter-city transport (most obviously Northern Rail), tax breaks for companies that set up in struggling cities such as Doncaster, Wigan or Bradford, as well as more money for towns and cities to spend on green spaces and cultural assets (such as museums, public art, restaurants and bars) that attract young people.

These three productivity-generating policy areas will allow any Government to loosen the fiscal taps without bankrupting the country. When the next Prime Minister appoints his Chancellor, he or she would be well advised to stick to the basics of cutting taxes, spending more on education and rebalancing growth outside of London.

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Iain Mansfield: Brexit by October 31. Stop using the Left’s language. And stand for skilled workers. Essentials for our next Prime Minister

Iain Mansfield is a former senior civil servant, winner of the Institute of Economic Affairs Brexit prize and a Conservative councillor candidate. He writes in a personal capacity.

Our next Prime Minister will take office at the most challenging time since the 1970s. Not only is there Brexit – an issue of fundamental national importance, that has destroyed the last two Prime Ministers and poses an existential challenge to the future of the Conservative Party – but the old political assumptions are changing. Across the West, traditional voter coalitions are shifting, as citizens reject centrist compromises. Flatlining productivity, unaffordable houses and millions of voters feeling abandoned, either culturally or economically, are just some of the challenges they will face.

Many of those who voted for David Cameron in 2010 are lost to the party, alienated by Brexit. In Britain today, age and education level are better predictors of a person’s vote than class. To win a general election, our next Prime Minister must forge a new coalition of voters that unites the traditional Tory shires with the left-behind Leave voters in the Midlands and North. Even more importantly, they must deliver authentic right-wing policies that address the causes of ordinary working people’s dissatisfaction. People want change and, if the Conservative Party does not deliver it, they are likely to seek answers in the flawed blandishments of Jeremy Corbyn’s socialism.

In that context, there are three essentials that our next Prime Minister must prioritise for the good of the people, the nation and the party:

  • Leave the EU by 31 October, on WTO terms if needed.
  • Openly champion conservative values rather than speaking the language of the left.
  • Reposition the party as the natural home of the skilled working and lower middle classes.

Leave the EU by 31 October, on WTO terms if needed

Not only is delivering on the outcome of the referendum a democratic imperative, it is vital for the continued existence of the party. Recent polling shows that, if we have not left the EU, the Conservatives are likely to suffer devastating losses in a general election; these figures could be even worse if large numbers of members, councillors or even entire associations defect to the Brexit Party. Many members have held on over the last few months purely out of hope that the next Prime Minister would deliver where May failed: another betrayal in October would see these members permanently lost.

Leaving with a deal is preferable, if some changes to the backstop can be agreed and Parliament will pass it. If not, as I have argued previously on this site, we have nothing to fear from No Deal. Preparations for such should be put into top gear on the first day in office. The Prime Minister must make clear that they will under no circumstances ask for an extension; and that they are, if needed, prepared to systematically veto any measure put forward by the EU on regular business if the UK is for some reason kept in. While every effort should be made to secure a deal, if it cannot be reached, Parliament must be faced with the simple choice of permitting a WTO exit or voting no confidence in the Prime Minister – a gamble, admittedly, but one that is preferable to another disastrous extension.

Openly champion conservative values rather than speaking the language of the left

In recent years too many Conservative politicians have allowed our opponents to define the playing field. We cannot beat the socialists by adopting the language and assumptions of socialism. Our next Prime Minister must stop feeding the narrative of identity, grievance and division, with its assumption that an individual’s potential is defined by their characteristics, that so-called ‘burning injustices’ are solely the responsibility of the state to address, and that the government always no best.

Changing the narrative will be a long endeavour. The systematic appointment of those with conservative values into key ministerially appointed positions; an authentically right-wing approach to policy making in Whitehall; and the withdrawal of state funding from the network of organisations that maintain the left’s grip on the policy narrative are essential. But over and above this, the Prime Minister must be willing to personally stand up and champion individual liberties and freedoms; to condemn progressive authoritarianism and to be visibly proud of Britain, our culture and the rich global heritage of our citizens.

Reposition the party as the natural home of the skilled working and lower middle classes

Young, metropolitan graduates may once have been natural Conservatives, but no longer. There is little hope of reversing this in the immediate aftermath of Brexit. Instead of squandering our effort here, our new Prime Minister should instead make the party the natural home of the skilled working and lower middle classes, particularly in the midlands and north.

Such voters have a natural affinity to the traditional conservative values of low tax and individual liberty, but also greatly value and rely day-to-day onn strong public services. This places the Conservatives in a difficult position after a decade of austerity: Labour made hay campaigning on cuts to police numbers and falls in per pupil spending in 2017. But how to fund significant increases in core services without raising taxes or alienating core Conservative voters, such as via the disastrous proposals on social care in the 2017 manifesto?

To find the funding the next Prime Minister must be bold enough to slay the progressive sacred cows that soak up billions annually in public funding. Three immediately spring to mind:

With the additional £15 billion plus a year, the Prime Minister could at a stroke increase police funding by 25 per cent (£3 billion), boost school funding per pupil by 20 per cent (£8 billion) and increase spending on social care by 20 per cent (£4 billion). And then split the proceeds of further growth between public services and tax cuts.

As well as this, we should champion the interests of the high street, enterprise and small businesses and oppose crony corporatism. Multinational companies that make use of aggressive tax avoidance, abuse their market position or actively work against UK sovereignty should not enjoy government grants, procurement or time in No. 10. Fundamentally, our next Prime Minister should spend more time listening to the Federation of Small Businesses and less time listening to the CBI.

Conclusion

As members, we have two candidates set before us. Both are able politicians and tested leaders who represent the best the Parliamentary party has to offer. As we assess who should be not just our next leader, but our Prime Minister, we should do so against their ability to deliver these vital elements.

Both have committed to delivering Brexit by October 31 – but which one has the ability, the genuine will and the courage to do so by any means necessary? Both are true-blue Conservatives – but which one will truly champion our values, taking the battle to our adversaries with the eloquence and conviction of a Thatcher or a Churchill? Both recognise the importance of reaching out to new voters – but which one can devise and push through the policies needed to unite the Tory shires with the Leave voters of the north? Consider carefully and cast your vote.

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