BUSINESS services such as accountancy, IT and engineering are the unsung heroes of economic growth in the UK, a report by The Work Foundation will claim today.
Despite its recent resurgence, manufacturing is no longer the driver of the economy, and the chancellor George Osborne is wrong to “pin all hopes for recovery on this sector”, the foundation argues.
“Business services have become the lifeblood of the UK’s knowledge economy and now account for twice the output of the manufacturing sector,” said report author Andrew Sissons.
Business services make up over a fifth of British GDP and 11 per cent of employment, the group claims, making it the largest sub-sector of the economy.
Since its rapid growth began in the mid-1980s, the sub-sector has created 1.8m jobs. Since 1970, 38 per cent of all growth in the UK has been generated by business services, the research states.
“It supplies the professional and technological support that businesses depend on for innovation and growth,” Sissons added. “Business services take ideas and technologies and make them useful to businesses across the economy.”
The industry is responsible for over £20bn in net exports, yet still requires “a big push” in this area, according to the foundation.
“The government must also ensure that the tax regime encourages businesses to invest in their knowledge base,” Sissons said.