The British Academy’s Economic Strategy Programme

This report is part of the British Academy's Economic Strategy Programme.

Today, the UK is a medium-sized economy. Along with other countries, the UK is both looking outward at an environment of international turbulence and inward at what has been a long period of low economic growth and productivity.

Internationally, from an historic and diplomatic perspective, the UK retains a significant role in framing the world’s financial, economic, and political institutions. Today, the UK is not large enough to act unilaterally or bilaterally - as it has in the past - nor is it a member of a major economic bloc.

This presents a challenge in navigating strategies for long-term economic prosperity:

• The infrastructure to support some of the UK’s greatest strengths is precarious or poorly aligned with our needs and opportunities;
• We have experienced persistently low economic growth and productivity, and entrenched inequalities across and within economic geographies;
• Our otherwise strong skills base is unevenly spread and mismatched across regions;
• A lack of downstream infrastructure for adoption and diffusion of innovation that flows from our excellent R&D capabilities;
• The role of social value in long-term prosperity has tended to be overlooked in governments’ economic strategies.

However, there are opportunities in the way that the past, unequal international order is loosening up. Given the UK’s experience of multilateralism and its globally-intertwined economy, there is an opportunity to be a dependable broker with many parts of the world. We have many comparative advantages:

• Strong and stable legal, financial, cultural and scientific institutions;
• Deep historical experience of multilateralism and a leading role in shaping the world’s major international organisations;
• World-class universities with a solid research base and world-leading global sectors such as financial services and the creative economy;
• Existing collection of a great deal of robust data against a variety of broader economic, social and environmental indicators; and
• A strong skills base that is able to be more effectively mobilised.

Any new economic strategy will need to be able to withstand and respond to the heightened levels of global uncertainty that we see today.

Fundamentally, policies that underpin a sustainable and long-term economic strategy should involve ‘investing in investing’, i.e. investing in the institutional, human and physical capital that makes a place ‘investible’ for the private sector.

Here, investment does not just mean money, but also time, effort, expertise and capabilities allocated towards promoting growth, stability and societal well-being. Concrete ideas for how to make these investments are put forward throughout the detailed Briefing Papers of this collection.