Rebalancing Act

The NESTA model tested four possible scenarios:-

1.‘business-as-usual’ case
2. a broad-based manufacturing renaissance
3. a high-tech growth scenario
4. a case in which businesses invest heavily in innovation across the economy. 

The model outcomes show that the business-as-usual scenario is slow to generate jobs (employment growth does not occur until 2013) and delivers poor growth.   The broad-based manufacturing renaissance is unlikely to be sustainable since it requires at least a 3% increase in the manufacturing sector’s contribution to the economy ABOVE the overall economic growth trends to 2020, to a level not experienced since before 1945!

A high-tech growth scenario would generate a higher rate of growth  and a faster return to employment, by 2011 rather than 2013, as would the scenario of much stronger business investment in innovation across the economy.  Both of the latter scenarios would offer a very sound overall level of economic growth.

Thus innovation, whether in the high-tech manufacturing sector or more widely across all sectors, could drive robust growth with positive employment across all parts of the UK.  However this will require private enterprise to make significant investments in innovative activities to secure growth opportunities in the UK and, critically, in overseas markets. See – Rebalancing Act