Now is the time for the UK’s economy to be rebuilt upon green foundations, says a recent report by The Manufacturing Technologies Association (“MTA”). The report claims that the UK is well positioned in a transition towards a more sophisticated and environmentally aware economy.
Investment now, it claims, will see the UK reap the benefits in the coming years and decades which, with any luck, will help with the restabilisation of things after the recent crisis.
Chief among the many concerns of workers at the moment is job security. Currently, unemployment sits at about 3.9%, with unemployment claims more than doubling over the last three-month period. Conservative estimates from a UK Government watchdog place unemployment figures at just below 10% by the end of the year – not far shy of the post-industry 1980s – with hopes of a full recovery by 2022. Undoubtedly, the full effects of unemployment in the wake of the crisis will not be seen until employers are forced to contribute more towards their employees’ furlough scheme, or once furlough ends entirely in October.
What are these workers to do?
UK manufacturing is still a key part of the country’s economy and employment drive, with some 7% of jobs belonging to the sector. At the same time, investment in ‘Green Growth’ is growing at around 4x the rate of the wider economy; it is easy to see how the UK could exploit the drive for Green Growth to its advantage.
Industry 4.0 is quickly on its way – hastened by the pandemic – and with it will come a shift in employment. The argument presented by MTA in their report is that the ‘Green’ sectors are going to become key hubs for employment, growth, and investment. Purportedly some 30,000-90,000 jobs in UK manufacturing will be made available, with up to one million more in the economy as a whole; the jobs are likely to be skilled, of high-quality and pay, and fully fit and future proof for the 21st century.
So there appears to be a conservative-economic argument for investment in ‘Green’. In a recent Webinar from the Economist, speakers emphasised the need to treat the climate as an immediate crisis – similar to Covid-19 – and that this would facilitate the push many companies need in order to accomplish their green goals. The problem is, however, that many people still don’t see the climate as an imminent crisis, but rather a far-off problem for their great grandchildren to deal with. Such is human nature – it is illogical to allocate enormous amounts of resources to a problem that we cannot perceive as imminent and therefore worthy. With any hope, education and investment in the sector will shift this train of thought in the other direction.
Though certainly not desirable, the pandemic does present a sort of ‘take-stock’ point for companies and the wider economy. Clearly things cannot and will not return to the way they were pre-Covid for some time, so perhaps this is the time to look at issues of green energy, de-carbonisation, and green growth with a renewed sense of zeal.
So is now the time you to take stock of where your investment is going? We are seeing a blossoming of equity providers looking to assist companies make those investments. In future we think it likely that buyers of business will increasingly pay higher prices for targets that match their world view on sustainability.
The effect of Green Growth on GDP stands to be large, adding some £8bn to £20bn in output to UK manufacturing and its supply chains… The effect on jobs also stands to be substantial, creating some 400,000 to 1 million jobs in the economy as a whole