Speaking at the Building Societies Association (BSA) conference, Rain Newton-Smith, chief executive of the Confederation of British Industry (CBI), said the “tide of globalisation” has been “turned on its head” and that the “world order of politics and trade has been upended”.
“Make no mistake, this will and is already having consequences for the communities you work in, the people who save and who bank with you, whose living standards are already under strain under years of inflation, rising energy and housing costs.
“As the Prime Minister has rightly said, we are living through an age of global instability, which is felt by working people as an age of local insecurity, and building societies and mutuals are very much on the front line of this,” she said.
Newton-Smith noted that building societies are truly the “bastion for working people across the UK; a safe haven in the storm”.
“But it can’t be all on your shoulders. The only long-term solution, the only way to truly raise living standards, the only real response to this global turmoil must be to drive growth and productivity across our economy.
Mind the affordability gap
Sponsored by Newcastle for Intermediaries
“To make it felt in every community, in every region, in every nation of the UK, to double down. Not to step back from this government’s mission for growth, and that requires action,” she said.
‘Technology revolution’ needs to be embraced
Newton-Smith stated that there was a “technology revolution” in addition to “seismic economic and political change”.
She noted that despite the world-leading universities in the UK “pushing the boundaries” on quantum computing and artificial intelligence (AI), the highest number of quantum tech start-ups in Europe and the third-largest technology ecosystem in the world, there is a “risk that we’re not leading, but that we are lacking”.
“We’re failing to translate some of that leadership in tech to leadership across our whole economy to raise higher living standards. But of course, this also represents an opportunity to turn around that tide in the storm of global uncertainty; be sure the only ones that will emerge the other side unscathed, or even stronger, will be those who adapt and embrace technological change, who translate ideas into action and growth,” Newton-Smith said.
She called on building societies, credit unions and other senior leadership present to embrace technology, noting that digital technology adoptions could add £250bn to the economy by 2030 and AI alone could add £400bn.
Newton-Smith said many CBI members she meets “want to be innovative” and “want to be signing off on new projects and new investments”.
“But despite the benefits, what I’m hearing again and again is that businesses are not able to go as fast and as far as they would like. They are being held back. Over half say they’re held back by access to finance, because the reality is right now many businesses are still straining under a cumulative burden of rising taxation and higher costs,” she said.
Newton-Smith said the UK is “falling when it should be… leading this new industrial revolution”.
“I fervently believe there’s a genuine opportunity here for a government of vision to change our fortunes, to remember… that we do not withstand change by standing still.
“That could be this government. They’ve already shown ambition on tech, the benefits and productivity gains in the private and public sector. We’ve had the tech adoption review, the AI opportunities action plan, but the fact is, the biggest gain for our economy, for growth and for people, can only come from businesses taking action, from each of you adopting tech and innovation.
“Businesses want to be investing, but government must help get businesses on the pitch after all the plans and strategies, they need to put their money where their mouth is,” she said.
Newton-Smith said it was calling for a “real national tech adoption plan to break the piecemeal pattern of past governments, to deliver whole systems change and marshal innovation in every sector, co-ordinating what’s needed across incentives, skills and infrastructure”.
“Together, there is an opportunity for a government with vision and guts to unleash that tidal wave of productivity in every sector and every part of the UK looking around us. We can’t underestimate the scale of change in our world today and the impact on our economy and our people,” she noted.
