What potential does the knowledge economy offer the region? Tony McDonough reports
HOW valid is it to include non-business assets when assessing the strength of the Liverpool city region’s knowledge economy?
This was one of the major issues tackled in the latest of a series of LDP Business debates.
The debates are being held to coincide with a major new push to grow the city region’s economy.
Inward investment agency, The Mersey Partnership (TMP), and a host of other agencies, local authorities and private businesses have set out their vision for the next few years.
They believe the biggest potential lies in four key sectors – the knowledge economy, visitor economy, superport and low-carbon economy.
The May edition of the LDP Business magazine, free with the Liverpool Daily Post tomorrow, will take an in-depth look at the knowledge economy (KE).
KE is broken down into four sub-sectors – advanced manufacturing, life sciences, creative and digital and financial and professional services.
Daily Post business editor Bill Gleeson chaired the KE debate and joining him to discuss the issue were Professor Dennis Kehoe, chief executive of AIMES Grid Services; Peter Cook, chairman of SOG, owner of The Heath Business & Technical Park; Tony Bell, chief executive of the Royal Liverpool & Broadgreen University Hospital NHS Trust; and Philip Rooney, Liverpool office managing partner of law firm DLA Piper.
Professor Kehoe asked whether the audit of KE assets in the city region contained too many public sector bodies as opposed to private companies actually generating wealth.
He said: “When we read the knowledge economy report, we were seeing things to do with education. I think what we need to do is convert knowledge into wealth.
The report concentrates on the public sector – schools and colleges.
“We don’t have multi-million dollar knowledge economy businesses here. I think we need to distinguish between jobs in the private sector and in the public sector. We are in real danger of deluding ourselves.
“This is not Silicon Valley. Knowledge to wealth is where the focus needs to be, rather than simply aggregating the assets.”
Professor Kehoe also expressed surprise that those assets included the Liverpool Institute for the Performing Arts (LIPA).
Tony Bell, who was involved in compiling the KE report, insisted the public sector bodies were integral to the future growth of the sector.
He said: “The knowledge economy plan, as it is written, is described as a start point – not an end point.
“It is about building a pipeline to create wealth. Health represents a £2bn slice of the economy. The way forward is to engage with business.
“We recognise that it is not going to happen in the universities and hospitals.
“When we were looking at the knowledge economy, we looked across the whole city region and not just Liverpool itself. We looked at what assets there were – the knowledge capital that we have, and the business sectors that rely on that knowledge.
“We looked at the growth that relies on the axis between education, research and innovation.
“The performing arts is a rich part of the history and tapestry of this city and that is not to be ignored.
“The performing arts make a contribution to the other sectors. They provide things like distraction therapies. We need to understand the breadth of what LIPA can provide.”
Bill Gleeson also queried whether financial and professional services were relevant to the KE in the region.
Philip Rooney replied that the existence of good professional firms in Merseyside was vital if growing firms were to have the support they needed.
He added: “We are one of the leading cities outside London for wealth management.
“We may not be saving peoples’ lives, but some of the work that goes on here is cutting edge.
“We have a great maritime law experience here in Liverpool and we are pushing businesses forward. It is all about raising our game.
“If we have a city region that wants to develop on the world stage, then we have to have a vibrant professional services infrastructure. Legal support is needed in this city for the knowledge economy.”
Peter Cook suggested the focus on particular sectors may be too narrow an approach.
“I have a concern that we are focusing too much on sectors – because life is not like that,” he said.
“If I have a criticism it is the identifying of the four sectors. We must not fall into the trap of just falling into four sectors.”
Picking up the point, Mr Rooney added there must be integration between the different sectors in order to maximise growth potential.
He said: “The way we can look at the framework is to see the four sectors as hooks that we can hang things on, not just silos going in parallel lines.
“Things must tie in with each other – we have to look at the sectors and see where the crossovers are.
“Jaguar Land Rover now has an established supply chain out in Knowsley. We have to convince businesses that there are supply chains in place that will attract them to stay.”
All members of the panel agreed that if the growth of the sectors was to benefit the people of the city region, then a major push on education and skills was vital.
Mr Cook said: “I believe the education system – in particular, schools and further education colleges – need to engage more with businesses.
“They cannot just wait for businesses to come to them.
“We need to locate some aspects of the education system within businesses.
“I believe a lot more needs to be done. Schools have their own curriculums and agendas. We have got to get young people out into the business community.”
Agreeing with the point, Professor Kehoe added: “Young people do not have a lack of aspiration, but the world is moving at a tremendous pace.
“A 21-year-old these days does not know enough – too many are technically not capable. They do not have the skills even if they have been to university.
“We need to have funded internships that they can take part in while they are still at university.”
And Tony Bell said: “Do we have the skill-set that we need? That will be decided over time.
“What we need to do better is the integration between different sectors. We need to make sure what the universities are offering is top class.
“The internships need to be in the business sector, and we need to get into the schools and let pupils know what happens in business – particularly in the laboratories and in the digital sector. They are not going to get that from their teachers.”
Professor Kehoe talked about the need for much better digital infrastructure across the city region, and about AIMES’s £1m Fibrenet project, which will offer super-fast broadband to local businesses.
“This city has missed out on the internet revolution. Fibrenet gives the city the opportunity to provide cloud computing services. We are utilising a fibre network laid down by the city council a few years ago – we are creating what you might call a digital inner ring road.
“We need to build the power stations of the knowledge economy. If we can do one thing, then we can make this a much more connected digitally advanced city.
“In Seoul, for example, they have 100mb broadband going into homes – it is transformational.
“What we have here now is absolutely sub-standard. That is the challenge – we have to build the infrastructure.
“Previous generations have built great infrastructure – the sewage systems for example. Now we need infrastructure for the 21st century.”
The panel discussed the issue of retaining talent, with concerns over both the loss of skilled graduates and companies migrating elsewhere.
Mr Cook insisted the city region did have the facilities to attract and retain businesses.
He said: “By and large, when small firms start up here, a lot of intellectual property is being developed and as they grow and employ more people they are less likely to up sticks and move somewhere else.
“They are not quite as fickle and will stay in the area. Businesses will come from the South East because we have facilities here that they do not have down there – we must not undersell ourselves.”
Agreeing, Mr Bell added: “We need to sell ourselves better. The London embassy was a good bit of inspiration by the leader of the council.
“I am confident that we have the assets here and we have got to get a clear message out there.”
TO VIEW the LDP Business debate online, log onto www.ldpbusiness.co.uk
