UK’s opportunity in the 21st century

Reinventing Britain by leveraging what makes it Great

As I described in my previous blog posts, the set of urgent global issues that PwC framed under the acronym ADAPT — asymmetry, disruption, age, populism and trust — will present serious challenges for nations and their education systems. The picture painted by those challenges can seem dark, but it also contains opportunities, for those who can see them and can understand the benefits of a new role the world needs them to play. In this post, I will focus on a single country facing some very significant issues — the UK — and discuss some of the ways in which it can do more than just make lemonade out of lemons.

Although Brexit casts a shadow over all conversations about the UK these days, had the referendum never been held, many of the underlying issues would still be posing significant challenges to the nation. The wealth disparity between individuals (the top 10% of households control almost half of all total wealth), between London and other regions, and across generations is growing. The manufacturing sector is greatly diminished and seems to shrink a bit more every year. The UK is growing less competitive in technological capability, except in a few targeted areas such as materials science. As is the case in so many western European nations, the population is aging and there are three groups at risk: those about to retire with very little capital preserved and no, or limited, pension; those who are mid-career, have taken on significant financial obligations and are now threatened by technological disruption and economic loss due to Brexit; and university students graduating without the right education and with significant debt.

If we look beyond the significant disruptions posed by Brexit, the country needs an infusion of smart, ambitious talent, a new narrative and a source of sustained economic growth. Combined with this the UK has a number of real assets that can be leveraged to solve the outlined challenges:

1. A unique geographic position.

The UK sits between two of the great powers — the European Union (EU) and the US — which are experiencing increasing tension on a number of fronts, making the UK a natural choice for broker, buffer and convener. Other commonwealth countries have the potential of playing such a role as well, but their sphere of influence is likely to be limited by their region, while the UK is a truly global force.

2. A university system that is the envy of much of the world.

The university system in the UK is strong, and regularly punches above its weight. Five universities are consistently ranked in the top 25 in the world and several others are in the running. People around the world don’t need specialized ranking tables to tell them this because these schools have names that have been synonymous with scholarly endeavor and academic achievement, not for decades, but for centuries. This matters because the country which has benefited the most from attracting the best and brightest students from around the world — the US — is sending mixed signals to those who wish to emigrate for academic or other reasons. We should not forget that many Silicon Valley start-ups were built and now staffed in part by immigrants who came first as students. In fact, 21 out of America’s 91 billion-dollar startup companies had a founder who first came to America as an international student.

3. In spite of Brexit, the UK is seen as a relatively stable place.

It is known for its strong rule of law, a sense of morality and care in its decision making, and, despite current difficulties, a stable pluralistic democratic system. The UK is a place where diversity is respected and where everyone matters.

4. London is one of the world’s major centers for finance and professional services already. Although there is much concern about the impact that Brexit may have on this sector, there is an argument that a more independent position might enhance the UK’s profile, once new ways of connecting are figured out.

5. Many in the world consider London their second home.

London and the UK feel like places most everyone knows, both comfortable and safe. Although it is not without crime or terrorism, it is a place that accepts people for who they are and is conducive to a conversation with people from anywhere. It continues to be a highly desirable destination for those seeking to emigrate in search of a better life.

On this point — last year, I visited the London School of Economics (LSE). The entrance to the campus makes you feel a bit like you are walking through a narrow alley and, as a consequence, you cannot help but bump into a few people along the way. So, on my visit, I literally bumped into a group of students (whom I learned were from Ethiopia, Saudi Arabia, China, Bangladesh, Chile, and the United States) who were engaged in an energetic debate about what new forms global governance should take. I joined the discussion which was a fascinating tour around the issues covered in many of my blog posts. When I asked them why they were at LSE, to a person, their answer was, “where else could you have this conversation”? And, they all added, “we love London!”. These students are not unique.

The assets outlined above matter a lot in a world which is fracturing at an accelerated pace and particularly where tensions and uncertainty are increasing with respect to the US and China. PwC’s 22nd CEO survey suggests that significantly fewer CEOs from around the world are willing to invest in the US or China over the medium term because of the instability in relations between the two countries. Without debating the pros and cons of policy, it’s not hard to see that many of those seeking a destination for quality advanced study and impactful work are probably rethinking their plans. The UK could be among those countries that might seek to increase its attraction to the best and brightest students from around the world, make strategic moves to encourage those that are most capable to stay and, as a result, attract capital directed at the innovations the country needs.

In the same way, using its other assets and the very core of British traditions, the UK has a strategic opportunity in the very short term to reposition itself in this new world and build the foundation for growth in the next decades.

I believe that taking full advantage of this opportunity would require a coordinated effort across six strategic areas, all of which are already in part touched by various UK policies but need to be shaped into a coherent and intentional approach.

Here are the six areas:

1. Target the world’s top talent to study in the UK

Even if the UK already boasts more than its share of brilliant thinkers and doers, it cannot possibly have all the talent it needs to compete with the rest of the world. The solution would be to sample from as large population as possible to find the best of the best and bring them to the UK.

• Actively promote the UK as the place that welcomes specifically the brightest students from around the world.
• Create a path and competition-based immigration policies for the most capable to stay and work and build businesses in the UK.
• Be explicit about this strategy on a global scale.
• Charge those students the real full cost of an education, while finding money to create scholarships for the very best.

Studying and then working alongside people from all over the world can additionally develop their UK classmates and co-workers into true global citizens and ambassadors of this new UK strategy.

2. Attract domestic and foreign capital to invest in innovation centers adjacent to UK universities

The UK needs to be intentional about energizing its own “Silicon Valley” effect, adjusted for the 21st century. It will be important, not only to actively support the connection between universities and nascent innovation hubs through grants and tax incentives, but also to make the broader case to CEOs and investors from abroad about “Why the UK?”. To address regional disparities across the UK, there should be a focus on developing these innovation hubs specifically in locations outside of London, and not just Oxford and Cambridge, where excellent start ups already exist, although even there founders struggle with scaling and owning them later in the life cycle. This strategy also helps to address the issue of decline in manufacturing by bringing 21st century manufacturing to the UK, promoting innovation and providing the UK with the opportunity to become a leader in tech. Further, the strategy would provide natural markets for any products created through the affiliation with other countries that the UK drew the students from.

3. Focus research and education around a few critical areas

The “Silicon Valley” ecosystem assumes that educational strategy must inform the industrial strategy and vice versa. Building the deep relationships between the new innovative businesses created in the innovation hubs, can also allow for funding for the most important areas of research activity. This is particularly important in the post-Brexit world when EU funding may be cut. The research areas should be around major integrated problems that humanity faces today. They can be derived from PwC’s ADAPT framework with climate issues added into the mix:

• Humanizing technology (making tech serve human needs)
• Materials science, AI, and medical technology
• Healthcare
• Quality of life improvement for the elderly
• Alternative energy
• New global order (distribution of power in a fracturing world) and new forms of capitalism

4. Place special focus on developing technology-savvy humanists

Create an explicit curricular strategy focused on developing talent in the most critical domains of technology, but also ensuring that these same individuals are students of human systems and, indeed, of humanity itself. This focus should be complemented with a commercial bent and a focus on design and creative arts. Done right, this strategy would:

• Enable UK universities to better prepare the country’s own talent for the future — at all stages of their career development (concept of lifelong learning);
• Create entrepreneurial and professional talent able to build and design useful technology while mitigating the potential negative side effects of that technology;
• Build a strong local and national economy: grow business but in an inclusive manner; and
• Create dynamic, culture-filled communities affordable for all members of society to live.

5. Develop free trade agreements with the critical players

Construct relatively unencumbered trade agreements with the major existent and emerging economic nodes, most importantly the US, China, India, the Middle East and critical parts of Africa. As part of the strategies for India, the Middle East and Africa, have explicit agreements focused on the development of talent for accelerating the growth of universities and education more generally in those regions, and partnering with existing universities to help them accelerate their success. This can create a natural path for expanding ideas, services or products created in the UK, as well as a vehicle for identifying and attracting the best talent in each country.

6. Make the UK a safe place in the multi-nodal world: become the place where the world comes to debate, seek counsel and bank during the turbulent times ahead.

Take advantage of being a neutral player in the world — in particular, proximity to the EU but independence from it — as well as friendly relations with the US. Be the place the world meets to discuss tough issues and establish a new international model, seeks comprehensive advice and learns about issues and players from a relatively neutral perspective.

All elements of this strategy directly address the ADAPT issues in the UK and specifically the three disadvantaged groups I mentioned in the beginning. This approach creates meaningful work for the recent graduates and for mid-career professionals displaced by automation as they re-tool. While increasing opportunities for local youth, this education positions them to run a country in a way that raises professionalism and compensation of basic service workers and people in trade. There are also benefits to retirees. Firstly, this approach should create a significantly larger tax base from which to draw support for necessary public services. Second, if an explicit focus for research is put on medicine and health, better and less expensive solutions for sustained healthcare, should result, thus improving care and outcomes while increasing funding and efficiency in the system overall.

Overall, in addition to the benefits already cited, this approach addresses the UK’s competitiveness gap in technology, reinvigorating the industrial and service economy base, and infusing new talent into the lifeblood of the nation. In so doing, the UK would indeed be creating a new narrative, which is needed in times when people increasingly feel the loss of control over their own fate. The future will be hard for all nations and only those that find a way to navigate it in some positive way and rally behind a compelling vision will be in the driver’s seat.

This global strategy would be a win for the UK, because UK is uniquely positioned to do it and because it preserves the country’s identity and highlights what is special about the country. The world loves coming to the UK for what the country is. And although the focus in this post has been on the benefits accruing to the UK, there would also be significant benefits to the rest of the world. With the decline of many post-war institutions and the shredding of old alliances, the world desperately needs a place to convene, leaving their weapons at the door, so to speak. And, while a primary focus of this strategy is to bring a greater infusion of talent to the UK, some significant percentage of that talent may eventually return dividends to home countries — and perhaps a spirit of shared mission and community as well.

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