Invest in skills, infrastructure and innovation, says growth commission

Crop irrigation31 January 2013

Investing in human capital, improving the national infrastructure, improving finance provision for private investment and innovation, and the creation of an independent National Growth Council are key recommendations in the final report from the LSE Growth Commission, published today. The report has been funded by the LSE Higher Education Innovation Fund and the ESRC.

“After years of inadequate investment in skills, infrastructure and innovation, there are longstanding structural weaknesses in the economy, all rooted in a failure to achieve stable planning, strategic vision and a political consensus on the right policy framework to support growth,” warns the report Investing for Prosperity: Skills, Infrastructure and Innovation (PDF, 1.2Mb).

The commission report has been published in partnership with the ESRC Centre for Economic Performance and the Institute for Government.

The LSE Growth Commission recommends a set of measures to boost economic growth:

  • Increasing UK school standards - including the quality of teachers, better buildings, smaller classes and higher wages, and a greater flexibility and increased autonomy for the UK school system
  • Supporting apprenticeships to tackle low skills – getting employers more involved in training through increased skills budget allocations and training levies
  • Substantial investment in transport, energy, telecoms and housing infrastructure, and the development of a new 'institutional architecture' to ensure improved delivery and funding of major infrastructure projects – for instance by setting up a new Infrastructure Bank
  • Investment in equipment and new ideas, underpinned by a stable policy framework to encourage long-term investment – key policies here are greater competition in retail banking and a business bank that prioritises lending to smaller and innovative firms.

"We challenge the main political parties to form a consensus for long-run investment to achieve prosperity for our nation," says Professor John Van Reenen, co-chair of the LSE Growth Commission and Director of the Centre for Economic Performance, in an LSE press release.

"Economic problems that have built up over many decades will not be resolved in the space of a few years. So it is vital to develop policies that look beyond the next budget cycle, the next spending review and the next parliament."