Business Weekly - Cambridge, UK

The Greater South East - made up of the East of England, London and the South East - represents 42 per cent of the UK's total gross domestic product and is the most successful ‘mega region’ in Europe. But this position is under threat with serious challenges from emerging economies of India and China and established nations like the US. As a result, the UK is falling down the world's competitive ranking. The implications for the UK economy are massive, according to the report.

'The UK's engine for growth and prosperity' outlines the strategy for success of the UK economy for the next few critical years and is the work of the three regional development agencies in the Greater South East mega region.

The London Development Agency, the East of England Development Agency and the South East England Development Agency highlight that - as the only three UK regions that together make a net contribution to the UK balance sheet - their collaboration is the powerhouse for the rest of the UK economy. In order to maintain its position as the leading European region, and to compete on an international stage, it needs to move up the Government agenda in terms of investment and strategic priorities.

Richard Ellis, chair of EEDA said: “The Greater South East must be at the heart of the government's economic policy. The key to long term sustained growth in a global economy is productivity, and to do that we need a vision for the future and to start to plan more strategically and collaborate. “Growth has been strong, but to continue to remain competitive the government must give us more power at the regional level. Working across regional and local divides, we can deliver what is needed to the attract investment to the region, ensure the right infrastructure - like transport and housing - is in place, and make the region an appealing place to live and visit, so as to support the region and the country's prosperity."

The report says that in order to maintain competitiveness, central government needs to refocus its economic policy on international comparisons, instead of dwelling on regional disparities.

The report also says that it central government must focus investment, encourage innovation and tap unrealised potential in the Greater South East, such as in the Thames Gateway where the right infrastructure investment could unlock an additional £12 billion for the UK economy. Regional development agencies also have their part to play in delivering critical developments and adopting a more integrated skills and labour framework.

Ellis added: “The Greater South East is a leader in innovation and hosts four universities from the global top 30. It attracts 60 per cent of all private research and development, and Cambridge, along with London, is a 'honey pot' for venture capitalists. We need to exploit what we have got and encourage growth and investment where appropriate so we can spread the knowledge economy to other regions in the UK.”

"It shouldn't be forgotten that the GSE is also the largest market for UK businesses and is the most important outlet for more than half of businesses from the midlands and the north. So we all need each other in order to remain competitive in the markets we are under threat in, and maintain our position as one of the top global economies."

Targeted investment, particularly in critical infrastructure such as Crossrail, is vital to secure the future international competitiveness of the Greater South East and the UK as a whole, say the regional development agencies.

OECD adviser Greg Clark supports the move for debate on the competitiveness of the Greater South East. He said: "When you look at the competitiveness of the global 'mega-regions' it is clear to see that their success is formed, sustained and developed through a long term, forward thinking approach that looks at the strategic picture on an international scale, uses investment to position itself in a global market and collaborates effectively to use its resources effectively."

Research has shown that the Greater South East has led UK economic performance over the past 25 years. It is home to 21 million people, some 35 per cent of the UK population. It is responsible for 43 per cent of gross domestic product - some £452 billion per annum - and attracts 60 per cent of all UK private research and development investment and 70 per cent of venture capital investment. Over half the top 20 global companies have major research facilities located in the Greater South East. London continues to be the world's leading financial centre, rivalled only by New York.

The report was launched on Monday 18 June at an event for key opinion formers at the Tate Modern. The event, 'Global Powerhouse: The challenges and opportunities facing the Greater South East' is an opportunity for stakeholders to debate the challenges ahead for the sub-region.