Getting our West Midlands BPS sector voice heard: having a seat at the table as the Government develops its National Industrial Strategy
We are at a BPFS crossroads - further public sector support for technology-led innovation would bring even greater benefit to our region through strengthened, inclusive growth.
Traditionally, there has been limited need for public-sector support in BPFS; we are a relatively self-solving sector in this regard. Issues around regulation, international mobility and professional qualification and status recognition issues appeared in a list of asks at a national level. Locally, asks tended to be: access to a more diverse pool of talent and inward investment of new companies to the region, which have been supported.
However, our work over the last 5-7 years has highlighted the importance of technology-led innovation to ensure the continued growth of the West Midlands’ largest sector. This foundational work, through our cluster-led approach and focused offerings has proven how the ecosystem has been effectively supported and as a region, we understand that with additional resource from the centre via the National Industrial Strategy, significant pace and scale benefits can be realised.
Background to the National Industrial Strategy
Place as a lever of growth is a key governmental theme and there is a strong message across all departments to engage across the regions. The Department for Business & Trade (DBT) is developing the UK’s National Industrial Strategy (NIS) and within this, sector teams are considering each of the priority sections (named in the draft publication released for consultation in November 2024 and ahead of the Spending Review expected this summer).
What we call the business, professional and financial services sector (BPFS) in the West Midlands are two (out of eight) priority sectors in the NIS: professional and business services (PBS) and financial services (FS).
SuperTech works with the West Midlands Combined Authority to bring industry voice into the policy-based discussions between regional and national teams. Last month this included hosting a roundtable focused on professional and business services, with regional attendees from these sectors. They provided feedback to Government for its NIS plans, to be aware of place-based needs and, in turn, how we can help deliver against the UK’s ambitions. Regional representatives included law firms, academics focusing on innovation within the sector and proftech SMEs.
Aligned Government Initiatives
One of the other Government strands of work, overseen by the Chancellor, is the “Cross-government Review of Technology Adoption for Growth, Innovation and Productivity”. As tech adoption and innovation-led growth is so central to the regional approach for the BPFS sector, the roundtable also had a representative from the Department of Science, Innovation and Technology as a key stakeholder of this work programme.
Our Regional Voice
At a sector segmentation level, SuperTech feels strongly that totally decoupling the strategy implementation of the financial services sector from the rest of the professional and business services should be reviewed, as there are a lot of learnings to be taken from the ascendance of fintech that can be deployed into the rest of PBS.
Some of the current government thinking that we have engaged in, explores focus areas as follows:
Best place to start, grow and invest in PBS
Highly skilled, inclusive and mobile workforce
Global leadership in dynamic standards and regulations
Seize global opportunities in PBS trade
Leaders in PBS innovation and digital adoption
Our thoughts on these follow:
Best place to start, grow and invest in PBS
One of the best ways to influence the West Midlands as being the best place for PBS would be to build good houses, good schools and strong cultural offerings so that quality of life is further improved to attract and retain PBS workers. However, these are not areas that a sector specific response can directly influence and WMCA continues to think about these important factors in its mission for inclusive growth more broadly for the West Midlands. But SuperTech’s focus on technology-led innovation is an area where the region might gain new powers and resources that can directly help businesses - this makes sense as a sector-specific focus.
Highly skilled, inclusive and mobile workforce
Skills is always a big topic and an important one, but it sits within a very complicated landscape caught up in wider education/ skills reforms that straddle national and regional complexities of devolved/ non-devolved powers. What we can do locally is to work alongside and influence local Higher Education Institutions to have more technology content within their Business, Social Sciences and Built Environment offerings to ensure relevancy for the modern workplace. This is an area that can be changed via public-private sector collaboration.
Leaders in PBS innovation and digital adoption
The current PBS sector approach is arguably too focused on how it does business and is not open enough to the inevitable reshaping of what PBS businesses do and could look like in the future due to technology led disruption. Having our regional proftechs provide that viewpoint was invaluable to the discussions.
Our SuperTech cluster group success is based on our focus on technology-led Innovation, keeping directly within the scope of things that can be influenced. The business response to the impact we have had was great to hear alongside calls for further sustained effort into building the density of pipeline of proftech businesses, from idea stage onwards to strengthen the capacity for innovation within our sector.
In particular, the proptech sector, with a focus on real estate and construction advisory, is undervalued in the UK and while facing similar challenges as other BPFS companies such as the disruptions to the time/money business model through technology, would benefit significantly from further focused support.
Global leadership in dynamic standards and regulations; and
Seize global opportunities in PBS trade
For both areas, national leadership makes most sense. For global trade, there is already public sector investment at the national level which could evolve more locally, but there isn’t currently a strong regional argument for a sector specific response: we would need a denser pipeline of proftech businesses with export potential. Our observations on the established PBS firms, are that most approach this via global networks and are generally capable of such expansion if they want a footprint beyond the UK.
West Midlands leading the way
The West Midlands can have a leadership role at a national level to demonstrate how public sector support can remove barriers for growth through technology-led innovation and support regional growth within the BPFS sector. Of all the Mayoral Combined Authority Regions, the West Midlands has been the first and longest-standing region to prioritise PBS for the best part of a decade, and has the best structures and evidence base for the UK. We want to see how the NIS can support our sharing of best practice across national and other regional networks and continue our journey of ecosystem growth.
Next steps
We are grateful to all our ecosystem partners who gave their time to this roundtable and also to the representatives of the DBT and DSIT for providing us with this opportunity to feedback to central government on the importance of our regional context. We look forward to the publication of the NIS as well as other key, complementary strategies such as the West Midlands Futures Green Paper as we continue to be a key part of the UK’s drive for sustainable, inclusive growth.
If anyone would like to find out more, please do get in touch hello@supertechwm.com