Local supply chains would boost economic growth, says CBI

6 July 2012

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6 July 2012 | Kamalpreet Badasha

The government should create an environment for investment in UK businesses to strengthen domestic supply chains for green technology, the CBI has recommended.

The suggestion was among 10 made in a report, The colour of growth: maximising the potential of green business published yesterday, which urged the government to recognise green business could add £20 billion in annual GDP to the economy by 2015. But the CBI warned the government should be careful of damaging the key competitiveness of industries. It said is not a choice between choosing economic growth or going green, as both can be combined using the right policies.

“We need to think more widely about how to capture more of the value of supply chains. At the moment, for every offshore wind turbine that goes up in our waters, only one third of the economic value originates in the UK,” said John Cridland, CBI director general in a speech yesterday.

The report found capital expenditure costs for offshore wind projects could be reduced by 33 per cent by 2022 if more parts were made in the UK. The growing trend of local supply chains needs to be adopted by UK sectors to increase economic growth and reduce risks said the report.

The CBI highlighted the Automotive Council UK's Technology Roadmap, which assesses UK capabilities for future technology needed in the sector, a leading example suggesting other industries copy the approach. The report’s case study of Nissan said the firm’s investment in the Nissan Leaf electric car and its lithium ion batteries are helping to maintain 2,250 jobs across the UK supply chain.

It also recommended UK Trade & Investment follow the example of the Singapore government, which proactively seeks to bring supply chain partners for sustainable business to the country.

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