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It takes a virus? Leveraging COVID-19 to accelerate Levelling-Up

Prof Greg Clark CBE, Chair, Connected Places Catapult.

Recent reports on the issue of regional disparities within the UK have revealed how complex, extensive, enduring, and deep the challenge is. Multiple inter-dependent and self-perpetuating processes, coupled with different place endowments, contribute to the reasons that some regional economies appear to surge ahead, and others become scarred and fall behind. These divides are further crystalised and entrenched through reinforcing behaviours about locational decisions made by mobile people, firms, and investors. They have been further reinforced by government policies, that unintentionally exacerbate such divides, and give them an almost ‘pre-determined’ aura.

As the Industrial Strategy Council concluded, addressing these divides requires a multi-dimensional response that is semi-permanent in its nature, driven by skilful and continuous leadership across our economy and regions.

Agility is key to innovation; leveraging the indirect consequences of one thing to achieve something different. One feature of COVID-19 response has been increased agility in many of our systems – from rapidly equipping field hospitals, to reorienting manufacturers towards ventilators, igniting the search for a vaccine, increasing the road space allocated to pedestrians and bikes, or changing the purpose of mobile phones so that they act as health screening devices.

Prof Andy Westwood’s recent paper for the Bennett Institute at Cambridge University takes the conversation a step further. He argues that COVID-19 could become a catalyst for some of the elements of the multi-dimensional response that we need. COVID-19 could, in fact, help us with levelling up!

Andy’s excellent paper argues that the need to make supply chains more resilient as a result of COVID-19 could lead to a ‘reshoring’ agenda that would enable more advanced manufacturing to occur in the UK and help contribute to better diversified and more productive regional economies, as well as to achieve the wider aim of more resilient supply. I think he is onto something. Andy’s recognition of reworked supply chains – the ‘Just in Case’, rather than the ‘Just in Time’ agenda that emphasise resilience rather than efficiency – leading to more diversified regional economies is a driver we should not fail to harness.

Another driver might be the uptick in digital transformation that COVID19 brings. As we embrace flexible working, video conferencing, telemedicine, distance learning and more, wider choices open up about place of work /place of home decisions and the locations of different elements within any value chain. For those sectors which can digitise, one benefit is that workers can live much further away from the places where their jobs are ‘located’, as they do not need to visit each day. This allows people in digitised jobs to live almost anywhere in the country if a daily commute is not required, leading, over time to the spread of disposable income and the possible rise of more dispersed sectors and centres.

This is not so much the ‘death of geography’ but rather the increasingly overlapping nature of previously distinct economic geographies, allowing greater integration and mobility between them. I am suggesting here that our urbanisation can become more distributed without losing the advantages of concentration. In this context a greater spread of prosperity may be possible in the longer term.

 

In large part, this more distributed urban geography is already happening in other parts of the world. It is now possible to have a job that is based in New York, but to live in a more affordable and family friendly location in a medium sized city in Pennsylvania or Ohio. Visiting the office 4-5 times a month coupled with remote flexi-working works fine. Similarly, a resident in Nanjing or Suzhou can do a job that is based in Shanghai and, at the same time, Nanjing and Suzhou can become specialist locations for advanced industries.

A third driver could be the green recovery. The UK Government wants to prioritise jobs in low carbon sectors, circular economy, and green infrastructure. Two critical clusters are real estate and mobility, because they count for such a large proportion of carbon emissions. Pursuing a green recovery would mean accelerated investment in EVs and in battery technologies, aligned with incentives to switch. It could also mean greater investment in modular and prefabricated construction, underpinned by digital twinning and component passporting that would increase residual values and circularity within the building industry. These kinds of activities are not likely to be concentrated in the most prosperous areas and they present substantial opportunities for growth opportunities in priority regions.

It is not correct that there is automatic or direct link between the COVID19 pandemic and greater regional growth opportunities. What may be the case however is that increased agility offers a wider opportunity. The practices, behaviours, platforms, revisions and reforms adopted to address COVID-19 have the additional scope to be leveraged in favour of levelling up.

How far these possible unintended consequences of the response to COVID-19 can go to contribute to the levelling up agenda envisaged by Industrial Strategy Council depends on the very things they recommend in their review – that is, accurately assessing the potential, organising to optimise it, and meeting it with committed leadership. For that reason, the Connected Places Catapult is redoubling our efforts to support businesses, place leaders and policy makers in navigating the current moment and realising an economic recovery which harnesses this unique opportunity to accelerate the realisation of a more prosperous and sustainable future.

To find out more about Prof Greg Clark CBE, new Chairman of CPC click here.

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