A practical Post-Brexit Vision

From austerity to inclusive growth

Shock and then creativity

Many of you reading this will be as shocked as I was at the Referendum result, but after a short period of bewilderment I thought, hang on, wait a moment! My creative thinking began to kick in and for the last week I have been piecing together this story about a way forward for the whole of the United Kingdom working as a Union. It is a surprisingly positive story because of the profound changes that will happen in the world’s cities over the next 15 years, kick-started by the global agreements in 2015. Around $5 trillion per year will be invested in urbanisation, resilient low carbon transitions, affordable housing and moving to a circular economic model between now and 2030 (1). All this will be accompanied by advances in artificial intelligence, robotics, autonomous vehicles, 3-D printing, nanotechnology and other areas of science which is called the ‘fourth industrial revolution’(2) and we have world class capability to be at it’s heart. Why not go for it, we have nothing to lose now and maybe we could even lead it given the right government approach! I will try to explain how.

A huge opportunity

I am a very practical person, so as well as setting out an action plan for grabbing this huge opportunity, I am going to give some examples of quick wins which could benefit people in the regions of the UK most impacted by austerity and loss of past industry, including those in Scotland, Northern England, Wales and Northern Ireland. I will argue that we should grab this opportunity together, including Scotland, and that it is much bigger opportunity than just focussing on the whole EU which I know will be slower to respond to the transition than the big movers Africa, Asia and South America (with one or two exceptions like Denmark and Sweden). I will also show that this is an opportunity for cross party collaboration, which must be needed if we are to avoid a recession.

At this point I should explain that after creating a Charity in 2011 to help the world make this transition, I have been to 30 countries across the world to discuss it with governments and private sector and I therefore have some knowledge of what is going on to address it, so my optimism is firmly rooted. I have also discussed making the transition to a more inclusive development model in UK urban and rural areas with MP’s and private sector in England, Wales, Scotland and Northern Ireland.

Why is this global change happening?

In 2015 nearly 200 countries signed up to ambitious Sustainable Development Goals, the Paris low carbon agreement and Sendai disaster risk reduction approach. Most said they did this because they were very worried about month by month threats from a changing climate, which was causing food and water shortages, seeding conflict and displacement of people.(1) They could see a worsening situation that they needed help to deal with. Also wildly fluctuating food and commodity prices was causing real economic stress. A fundamental principle of what everyone has signed up to is that ‘no one is left behind’, so inclusive equitable development is at the heart of the thinking and this needs a completely new economic, social and environmental approach. Many, many countries have huge fiscal deficits and in the teeth of impacts of a rapidly changing climate are trying to alleviate poverty, build affordable homes, improve healthcare and create a more resilient future through energy, water and food security-sound familiar? I wrote this partly so that a new UK government and other governments and parties can see how to align investment towards inclusive growth and get quick results by working across the Union and through cross-party collaboration.

Our UK ace cards for manufacturing jobs

In the pre-Brexit time, this is the WEF 2015–16 Global Competitiveness Index Report which says:

The UK at number 10 in global league table, has created a good set of conditions for its vibrant service sector to develop and for London to become the epicenter of the European tech and start-up scene. It boasts solid public and private institutions (14th), strong property protection rights (5th), and an efficient judicial system. Thanks to its capacity to attract talent from abroad (4th) and some of the best universities in the world, the United Kingdom can count on a well-educated workforce, contributing to high levels of technological adoption (9th) and ICT penetration (2nd). Although still recovering from the global financial crisis, the UK financial market remains one of world’s best developed, able to provide venture capital and equity financing to start-ups and entrepreneurs’.(3)

If you live in say Hartlepool, Swansea, Alloa, Great Yarmouth or Londonderry how does this set of assets help life to get better? Are the venture capital and equity financing coming into your town to create jobs linked to local skills and young entrepreneurs? I hope they are but I fear they are probably not-the WEF view of life seems very London-centric (apart from the Universities) and service based.

Not mentioned at all in the WEF report above are some newly developed ace cards we in the UK have up our sleeve which, linked to the historic ones in the WEF report like world leading design and creativity, can change this, both through improving the resilience of our own communities by creating jobs and lowering living costs, but also taking those solutions and supporting the global transition I mentioned earlier.

The first ace card comes from the world’s need to reduce raw material consumption in goods and construction by a massive 80% by 2050 to allow ecosystems to recover and material prices to stabilise. In the next 15 years it is estimated that to service urbanisation and increased consumption we will build as much new infrastructure as exists on the planet today and we cannot do this by digging up yet more raw materials. The solution lies in the transition to what we now call the ‘Circular Economy’ in which we re-think and re-design the way we make stuff. We can, and need to, completely re-design the way our economy works — designing products that can be ‘made to be made again’ and powering the system with renewable energy. We have the creativity and innovation to build our own restorative economy and help the rest of the world to follow suit. We have Ellen McArthur Foundation leading this charge from the UK (4) and world leading systems modelling capability (5) to show how this can benefit local communities. In government, WRAP (6) is leading alongside Zero Waste Scotland (7). However this approach can be moved to a completely new level to bring large scale manufacturing back to the UK in the places where heavy industrial production flourished and skills still remain, places close to the sea with ports like Hartlepool, Teesside, Swansea, Alloa, Londonderry and also smaller ports like Great Yarmouth. Circular Economy remanufacturing needs to run on renewable energy and so UK can offer the world to be the first hub for design and remanufacturing for goods for the whole of Europe, in which global suppliers can buy and sell through UK using their own trade deals with EU. So big suppliers like Samsung, Sony, Hitachi and even Apple could first make their products in low labour cost countries and then design them, with help from UK designers, to be remanufactured for the whole EU market in the UK. The UK finance community can help finance the new plants and the governments can offer an attractive tax regime. These remanufacturing centers must be close to ports (to get goods cheaply and in bulk in and out of the heart of Europe) and be able to use offshore renewable energy and so this brings them to Hartlepool, Teesside, Swansea, Alloa, Londonderry, Great Yarmouth and many more. This will create 1000’s of jobs where we need them from the EU market without any new trade deals. We could also create our own products and new companies using the skills we develop from this approach.

This is possible because of the second ace card which comes from commitments being made by countries all over the world to reduce carbon emissions with a huge increase in renewable energy investment in oceans on mountains, land and our built environment. In the UK we aim to have 20% of our energy coming mostly from offshore wind by 2020, but in Scotland 100% and in Northern Ireland 40% because of the coastline potential. Prioritising the use of this energy to power remanufacturing plants is the way to create huge numbers of jobs. I would argue that it is much better for UK to work together on this opportunity, sharing out the capturing of global companies and their products and linking them to world class University Design centres which partner to specialise in different sectors. There will be plenty of opportunity to share them around the UK and build our capability together if we move quickly. It would be crazy in my view to start competing within the UK for the global companies when there is such a big opportunity. In some way our position outside the EU, as independent, could almost be seen as an advantage in making these deals work, but lets not dilute it by competing.

The third ace card comes from solar energy and energy storage technology and our ability to turn buildings into power stations. The SPECIFIC research facility at University of Swansea (8) is addressing the challenge of low carbon electricity and heat by enabling buildings to generate, store and release their own energy, in one system, using only the energy from the sun. A demonstration affordable house in Cardiff SOLCER (9) is already showing the potential of this technology and it’s affordability. The great thing is that people moving in will have very small energy bills through the year in an affordable house. It has already been visited by leaders from countries all over the world including China. The technology is now available to be scaled for the 1 million affordable homes in the UK, which would create the scale, skills and jobs to enable UK to supply a component kit to the $2trillion a year global affordable housing market. Without the EU procurement rules we could make that happen over the next 15 years. However this good story does not stop there. The SPECIFIC research center was started to help Tata Steel in Port Talbot find added value markets for their steel sheet products, with them becoming solar panels with thin film PV coatings added. Now it seems possible that a new owner will convert Port Talbot to have an electric arc furnace to enable UK to recycle 1000’s of tons of scrap steel that goes overseas, part of the circular economy transition. This would in turn enable SPECIFIC to be a global manufacturer/remanufacturer of steel products for affordable housing as well as aluminium and glass. Also and even more importantly, if 1million affordable homes were built using this approach (and UK governments could specify this without EU rules) they would each have a 7kw.hr battery which when grid connected would enable one less nuclear power station to be needed in the National Grid, because of their ability to provide power in the winter peak demand. This means public investment in power stations could be offset by private investment in affordable homes, a major contribution to reducing the deficit.

The fourth ace card is UK’s world leading capability in bio-technology process development through the pioneering work at Centre for Process Engineering (10) on Teesside, which is helping to create a large number of spin-off companies. The technologies being developed include nano-technology, biogas, OLED film technology, printable technologies and opto-electronics all revolutionizing many sectors. Many of these technologies could be offered into the re-global remanufacturing businesses described earlier to add value to products and packaging as they evolve. With the remanufacturing plants, the Teesside Development Area including Hartlepool could become a technology and manufacturing powerhouse again, powered by renewable energy and exploring the use of waste hydrogen as an energy source.

The fifth ace card is the UK research and development investment focus on open data, data handling and systems modelling enabling us to model whole cities and economies in much greater detail and see the opportunities for investing in inclusive growth and improved human well-being (5) Such platforms are being developed first in the UK and we have the opportunity to roll out this approach across UK regions as part of the decentralisation agenda. In Roadmap 2030 which was written as a global plan for the transition, this is called a smart partnership between National and Regional Municipal government, where National Government creates the enabling environment for regional government to succeed in partnership with the private sector. This in turn creates the enabling environment for entrepreneurs to create new business models and to gain access to finance from world leading UK finance.

The sixth ace card is a whole pack of new developments in science which are also world leading- agri-science, regenerative medicine, synthetic biology, robotics and autonomous systems, advanced materials in aerospace and automotive.(11) The thing we have not always been good at is turning them into global products to be made in the UK but with the focus on circular economy remanufacturing there would be a platform for many of these technologies to cross the ‘valley of death’ more quickly.

Decentralisation and financing inclusive urban-rural development in UK

Whether to invest in the future and increase tax revenues or cut expenditure is a very hot topic as government aims to balance the books. So far national debt has gone up considerably in the process of increasing austerity. As I said earlier, we are not the only country facing that dilemma, and the consensus is growing that investment in inclusive , resilient, low carbon, green growth in cities and their rural hinterland is a way forward with a high proportion of private capital. The approach is summarised in Roadmap 2030 (1) which is an action plan that can be followed, guided by world leading expertise. A critical feature of this is that National Governments create the enabling environment for cities to attract private capital and to improve quality of life for all their citizens. In the UK in England this would currently create the perfect opportunity to immediately kick off cross party collaboration between the Conservative government and Labour Mayors in London, Bristol and Liverpool using the world leading systems tools and finance that are available and the policies already in place to decentralise. This could quickly also be taken to the other new expanding metropolitan authorities including those in Scotland, Wales and Northern Ireland. The possible new investment levels that could be generated, or continued, would be between 2 and 4% GDP per annum which would create jobs and improve quality of life quickly, without increasing public debt. City of London is geared up ready to help create green and municipal bonds and pension funds are ready to invest in infrastructure. Pension fund investments in property and shares are at risk because of Brexit and so alternative long term investments are welcome. The government would need to replace the EU structural funding already committed to these areas in order for a smooth transition to the new model in which Regional Urban Development Investment funds are set up to support an integrated approach to inclusive development (1) and to draw in the private capital.

This is possible because the investments, underpinned by systems modelling, will result in improving quality of life which people will pay for, in energy efficiency reducing people’s costs, in water and flood management which reduces insurance costs, in higher utilisation of public land with affordable housing, in integration of community and NHS care, in better matching of skills to business needs, in collaborative decision making reducing lead times and lower costs for planning etc etc.

In the rural economy we can follow the circular economy principles and move to incentivise food security in UK, after the CAP goes. We could consume more of our own milk, grow all our own vegetables and improve nutrient recycling, water management and get more energy from our waste. We can manage our own fisheries sustainably and recover fishing jobs, partly through more use of aquaponics.

The big prize-a share of the $5trillion a year global market

The final and major part of this rather long story is the big prize which is for the UK to lead the world, and particularly the world’s cities, to a more resilient place by 2030 and gain a share of the $5trillion per year investment that will be made in cities between now and 2030 for the reasons I explained earlier. Everywhere I go in the world people see UK as leaders in city strategy and planning for resilience. This is largely due to the wonderful C40 city network (12) created by London and still based in the capital.

We can really capitalise on this through the visionary leadership work of DFID and new funds such as the Global Challenge Research Fund. Over the last 2 years DFID has been funding a project called Future Cities Africa (13) which has helped to create a prototype of an open source Collaborative Human Ecological Economics resource platform CHEER resilience.io (5) which can be used to plan and invest in inclusive development in city regions anywhere in the world. This was created by leading modellers working at Imperial College London with Institute for Integrated Economics Research, led by my own Charity The Ecological Sequestration Trust. A demonstration region has been created in Greater Accra Metropolitan Area and this is now open to finance and technology investment from the UK. The plan is to expand this platform’s capability and then to make it available across the world by 2030. This means by using the Challenge Fund and private sector entrepreneurship, the UK can be at the forefront of rolling out all our ace cards and other new ones across the whole world over the next 15 years starting with the demonstration regions. Then those jobs in Hartlepool, Teesside, Swansea, Alloa, Great Yarmouth and all over the UK can be grown much further and UK finance and legal services can build their jobs from global opportunities to offset those lost to EU services.

We are ready to help to turn this vision into reality.

References

1. Roadmap 2030 Financing and implementing the Global Goals in Human Settlements and City Regions http://ecosequestrust.org/roadmap-for-habitat-iii/

2. 4th Industrial Revolution WEF http://www.voanews.com/content/wef-founder-world-unprepared-to-deal-with-fourth-industrial-revolution/3143406.html

3. Global Competitiveness Index 2015–16 http://reports.weforum.org/global-competitiveness-report-2015-2016/economies/#indexId=GCI&economy=GBR

4. The Circular Economy Ellen McArthur Foundation https://www.ellenmacarthurfoundation.org/circular-economy/overview/concept

5. Resilience.io Changing resource planning http://resilience.io/portfolio/wash-sector-prototype-debut-in-ghana/

6. WRAP http://www.wrap.org.uk

7. Zero Waste Scotland http://www.zerowastescotland.org.uk

8. SPECIFIC Swansea University http://www.specific.eu.com/about

9. SOLCER net zero energy house http://www.solcer.org

10. CPI Centre for Process Innovation https://www.uk-cpi.com/printable-electronics/opto-electronics-sslpv/

11. Eight great technologies https://www.gov.uk/government/publications/eight-great-technologies-infographics

12. C40 Major City Climate Leadership Group http://www.c40.org

13. Global Challenge Research Fund https://www.eventbrite.co.uk/e/global-challenge-research-fund-daresbury-briefing-and-consultation-event-tickets-25480652317

14. Future Cities Africa Cities Alliance http://www.citiesalliance.org/FCA-launch

15. The Ecological Sequestration Trust http://ecosequestrust.org