Trade in an uncertain world: Deep advantages and nimble responses

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

In an uncertain global economy the UK needs to be able to respond to changing circumstances by building an economy that is resilient to shocks and nimble enough to make the most of new opportunities.

Effective responses derive from ‘deep advantage’, the fundamental features of society and the economy from which the UK derives comparative – and in some cases absolute – advantage.

While these advantages may be manifest in particular economic sectors, the actual and potential sources of ‘deep advantage’ are the institutions, human capital and social and economic infrastructure of the UK. These should be the focus for policy, including the comprehensive deployment of the UK’s human capital across skill levels and places, the development of cities and regions through investment, and openness to international trade, investment, and ideas.

Exploitation of these advantages and nimble responses to new opportunities can be impeded by obstacles that need to be removed. Financial and governance institutions need to support investment opportunities and the ability to adopt, innovate, and commercialise new activities. How the UK ‘invests in investment’ over the next decade will determine its sustained comparative advantage across current assets and new areas in the future.