With Brexit, productivity, innovation and automation on the agenda at the CBI Annual Conference, who said what and why?
“In 40 years of business, I have never known a commercial environment so rich in opportunity yet so mired in threat”
With the fourth industrial revolution on one hand, but Brexit and “a system of capitalism that has seemed to have lost its purpose” on the other, CBI president Paul Drechsler’s speech, set the tone for the day.
He discussed the importance of businesses “proving their worth”, getting involved in education, preparing for automation and “eating, drinking and sleeping productivity”. He warned that Brexit negotiations were becoming too much like a soap opera. And, most importantly, he urged politicians, businesses and the country as a whole to come together. After all, he said, it is only by uniting behind common goals that we will get “the Brexit we need, the economy we deserve and prosperity for all”.
“Never underestimate the free market economy”
Although Prime Minister Theresa May said she was determined to give business “as much certainty as possible” on Brexit, she focused much of her speech around making the most of opportunities at home.
She said she wouldn’t shelter the economy from market forces, but would support a modern industrial strategy – taking decisions for the long term, partnering with business, investing in skills and driving up investment in research and development. “We should look ahead to the next 10 years for Britain’s economy as rational optimists,” she added.
“If we continue to have uncertainty around Brexit we will plan for a hard Brexit which will be good for no one”
BT Group chief executive Gavin Patterson wasn’t the only business leader to voice his concerns about Brexit – especially in relation to access to talent. In a session looking at globalisation, Steve Armstrong, president for Europe, Middle East & Africa at Ford, said the automotive giant would review their investment in the UK if the business environment changed (read his Business Voice interview for more).
The CBI’s Drechsler revealed more and more firms were already making contingency plans as they approached 500 days to go until Brexit Day 1. CBI research shows 87 per cent of companies have discussed Brexit at board level. “The other 13 per cent need to get a move on,” he said.
“Europe is not the enemy, but a partner in a strong cooperative relationship for the future”
In his speech, Labour leader Jeremy Corbyn said that time was running out on Brexit. And he added that a bad deal risked exacerbating weaknesses in our economy.
Solving our productivity crisis also had to be a priority, he said.
“We need to seize on this period of change to tackle issues in our economy and make this the country that we want it to be,” he said, as he set out the “common ground” Labour shares with business – on investment in infrastructure, new technology and skills.
“Even our best friends have to play by the rules”
Wilbur Ross, US Secretary of State for Commerce, offered interesting insight into what future trading arrangements for the UK could look like, as he said he wanted the US to be the UK’s “number one trading partner worldwide”.
He explained that Brexit offered an opportunity for the UK and the US to forge even closer ties if they negotiated new trade terms. And a joint trade and investment working group, already meeting, will put the two nations in a strong position for trade talks when they are allowed, he said.
However, asked about the recent tariffs imposed on Bombardier, his firm response hints at the kind of sticking point that could need to be overcome before such agreement is made.
“It’s innovation if you’re doing it; disruption if you have your head in the sand”
Putting Brexit to one side, and in a panel session looking at how automation will change the way we work, Duncan Logan, founder and CEO of Rocketspace, summed up the difference in attitude between successful companies and those that get left behind. In the same discussion, Mike Coupe, chief executive of Sainsbury spoke about the importance of agility and said: “It’s a scary world, but you have to be prepared to take more risks.”
However they said it, the message came across loud and clear: technology is already having a huge impact in the workplace, so business should act now before it’s too late.
“It’s not just young people – the rest of us need to master new skills too”
Brad Smith, president and chief legal officer at Microsoft, had similar ideas when he spoke about the future of work. With 30 per cent of UK jobs ripe for automation, and 90 per cent of new jobs requiring digital skills, Smith emphasised that everyone needs to adapt to the changes – and many of us will need help to do so.
It was a point picked up by TUC leader Frances O’Grady as she introduced the discussion on automation. “Every worker should have access to reskill and upskill,” she said, arguing that the government, business and unions had to work together to ensure the fourth industrial revolution “makes everyone a winner”.
And, introducing the panel session on globalisation as a force for good, OECD’s secretary-general, Ángel Gurría highlighted that the fact that one quarter of the UK workforce has low skills was a reason for the UK’s poor productivity performance. “Every large business needs to be a university,” he said.
“We invest in technology and robots and we still create jobs”
As part of a series of discussions around technology as an enabler for growth, Estelle Brachlianoff, senior executive vice-president UK&I, Veolia was one of several business leaders to emphasise that new technology didn’t necessarily mean fewer jobs. Her waste management business is “putting sensors on everything” and discovering new ways to expand and diversify.
Likewise Alison Fitzgerald, chief operating officer at London City Airport, spoke on the automation panel, about how investing in automation was a foundation for growth. She gave more detail in an interview with Business Voice.
“Culture eats strategy for breakfast”
Aviva CEO Mark Wilson fired out a string of memorable quotes as he challenged the financial sector to be more innovative – and explained how Aviva was trying to overcome some of the barriers, as a 322 year old business, to do so. Its answer has been to separate the digital part of the business, and hire new talent, to ensure the right culture is in place.
But he also commented on the role of regulators and the need for regulation designed for a digital age. “Regulation is like a protective slime. It’s hard to innovate when wading through molasses,” he said. However, his partner on stage, founding partner at Passion Capital and the Treasury’s “special envoy for FinTech, Eileen Burbidge said the UK regime was “more progressive than many”.
“We’re good at this”
Summing up the day’s events, CBI director-general Carolyn Fairbairn highlighted the amount of consensus around Brexit and industrial strategy – and the sense of opportunity many of the speakers portrayed, particularly around skills, technology, innovation and collaboration. The fourth industrial revolution will bring massive shifts to the way we live and work – but the UK has emerged from previous industrial revolutions as a world leader, and there’s no reason we can’t do the same now.