Surrey is the second biggest contributor to the UK economy after London. Here we take a look at how high-value businesses and innovative R&D underpin a county-wide plan for sustainable growth.
Well connected to London and the Southeast, and also internationally through its close proximity to London Gatwick and London Heathrow, Surrey is home to a wealth of world-leading academic and corporate research and development (R&D) as well as high-performing UK and international businesses, generating more than £43 billion annually.
Even so, the Covid-19 pandemic has massively disrupted the local economy over the past 18 months and focused minds on how to best grow and sustain Surrey’s economic ambitions over the next decade.
In November 2020, Surrey County Council published its Economic Strategy Statement: Surrey’s Economic Future, highlighting key priorities to 2030.
Surrey County Council’s Leader Tim Oliver holds the portfolio for economy and growth and illustrates the county’s potential.
“There are unique benefits to investing in Surrey,” he said. “We have unrivalled locational advantages. There is access to an incredibly highly-skilled workforce and strengths in high-value business clusters in sectors like pharmaceutical, automotive and a growing green economy base.”
Although retail, together with health and education, represent nearly 40% of employment, Oliver notes that one of Surrey’s key strengths is the exceptionally high number of knowledge-intensive industries such as professional services, information and communication and financial and insurance. Collectively, jobs across these industries represent more than a fifth of employment.
“Nearly 40% of all Surrey enterprises are in these knowledge-intensive sectors compared to 27% nationally,” he said.
Surrey’s economic statement came about after an independent Future Economy Surrey Commission headed up by former Chancellor of the Exchequer, Rt Hon Philip Hammond recommended a “clear strategy” to promote economic growth.
The commission advised the council to “strike a balance between measures that deliver growth and jobs retention in the short-to-medium term and enhance Surrey’s key strengths and assets in the longer run”.
Single voice for Surrey
As the council’s leader, Oliver recognised that to deliver on Surrey’s bold ambitions, the council needed to collaborate with its economic partners, so, in summer 2020, he brought these stakeholders together to create the One Surrey Growth Board to take “ownership” of the strategy.
Offering a single voice for Surrey, the board published a growth plan in May 2021 that adds more detail to the economic strategy statement.
The One Surrey Growth Board has also produced a delivery plan that outlines key projects and programmes that it will champion and take forward to support Surrey’s economic ambitions.
As Oliver notes, knowledge-intensive industries are a significant asset to the local economy which became even more apparent during the pandemic as jobs in these industries proved more resilient and adaptable than many other sectors.
Surrey’s academic and commercial assets include the 5G Innovation Centre at the University of Surrey in Guildford, which is a market leader in digital communications.
Nearby is Surrey Research Park (pictured top of page), a major centre of excellence in innovation. The park represents around 170 businesses – from fledgling start-ups through to global corporate giants such as BAE Systems and Airbus.
“The research park is technologically agnostic, so we cover innovation across a very wide spectrum but we do have particular clusters of expertise in space, human health, animal health, digital games, cyber and sustainability,” said Grant Bourhill, Surrey Research Park’s Chief Executive.
“Several of those sectors are going to have some form of convergence over the next few years, so the fact that we are strong in each individual one puts us in a very good position.”
As the plan for growth notes, the Surrey Research Park is unique in that its “innovation capabilities have been expanded through links between firms, universities, support services and key individuals, in a way that is hard to replicate elsewhere”. The University of Surrey’s recent announcement to create an “Institute for people-centred AI” is the most recent example that will further drive linkages between institutions.
High-value engineering company McLaren, based at Woking, is another market trailblazer, and offers leading-edge R&D solutions in medical devices and other engineering applications.
McLaren, like many of the businesses located in Surrey, works closely with other important facilities across the region and nationally, underlining the point that local innovation is critical to the wider UK economy. Surrey Satellite Technology (SSTL), based on the Surrey Research Park, is another good example of impact at a national level.
Surrey County Council wants to ensure that these businesses continue their superlative work from Surrey and encourage others to move to the county.
“Through a new ‘Invest Surrey’ programme, we will engage with the existing business base and encourage them to stay while directing promotional activity on bringing new, high-value business in, which adds value to our strategic priorities,” said Oliver.
As noted earlier, although the global pandemic has impacted significantly on the local economy, many businesses have demonstrated exceptional resilience in extremely challenging conditions.
Diverse Interactive, a Guildford-based digital experience agency that offers a range of bespoke services to clients, including immersive content, virtual and augmented reality, learning, training and interactive experiential solutions, is a case in point.
As Jake Warren-Simpson, Chief Commercial Officer, explained, the business has successfully adapted its product offering and has projected growth over the next 12 months.
“If you imagine you are a manufacturer of a large medical device, normally you’d take that to events, large conferences or meetings,” he said.
“We have designed applications and technology where you can send someone an app and then through augmented reality, you as the potential customer can look at the product using your own phone in your own environment rather than me shipping the device to you. It’s saved money and travel time and also reduced the carbon footprint.”
As the plan for growth notes, the survival rates for businesses in the county are slightly higher than the national average, and some industries have bounced back quickly.
“One of the most remarkable facts is that as we start to open up, Surrey Research Park has never been busier in terms of demand for innovation space,” says Bourhill.“That says something about the resilience of the companies on the park.”
According to research undertaken by the University of Surrey, which provided a detailed economic baseline analysis for the council to inform its thinking, the county has around 600 active businesses per 10,000 population. This translates as being about 23% higher than the equivalent figure for South East England as a whole.
Surrey’s level of economic productivity is impressive. However, the county’s economy is not as balanced as the council would like. East Surrey, for example, is over-reliant on the financial and insurance service sectors, both hard hit by the pandemic.
The financial repercussions for some businesses, notably the aviation sector have been extremely significant and restructuring may be the only option to stimulate future growth. The retail, hospitality and cultural sectors have also seen a sizeable economic downturn.
With the pandemic accelerating a move towards online trading, the council is currently exploring the potential for a new e-commerce platform for local firms as well as access to resources that enable businesses to expand their multi-channel presence.
Surrey County Council’s Digital Strategy aims to develop and enhance a “county-wide digital infrastructure” for businesses and consumers and will help future-proof Surrey’s economy, enabling greater flexibility around where people work.
The council’s strategy identifies four key priorities to support Surrey’s growth both in the short term and in the next decade to 2030.
The first is to support the growth of Surrey’s innovation economy by expanding its excellence in leading-edge solutions.
At the same time, the council wants to foster a “whole place” approach to growing and sustaining quality places. It also recognises that future opportunities can only be maximised in a balanced, inclusive economy while also capturing the potential of a greener economy.
To help achieve the first priority, the council plans to establish a Surrey Innovation Programme, coupled with a sustainable fund that draws on investment to support new and expanding businesses in critical sectors and technology areas.
“We have significant local private sector investment, which can be channelled into driving innovation in business start-up and growth, supported by our universities,” said Oliver.
Innovation in environmental solutions is critical to the future, Oliver said. The council plans to support the development of the low carbon and environmental goods and services sector and help encourage the wider adoption of lower carbon technologies.
Oliver added that extensive work has already been undertaken to help major automotive sector employers create a new environmentally-conscious cluster where they can share ideas, invest and deliver clean vehicles and associated infrastructure.
DBE Energy, which produces hydrogen fuel through anaerobic digestion, is another example of an increasing focus on environmental solutions.
“Growing a greener economy is one of the board’s primary objectives and this agenda is being driven by Surrey County Council through its Greener Futures work,” explained Oliver.
“It is a cross-cutting, multi-agency priority which needs to be embedded in all our strategic intentions and underpins all of our proposed projects.”
Oliver also points to the imminent launch of the council’s Low Carbon Across the South East programme. Through the provision of grants and access to environmental training, the council plans to help small-to-medium-sized businesses reduce their carbon emissions, deliver efficiencies and save money.
In the Government’s Build Back Better: Our Plan for Growth, which promised to “level up the UK”, one of the proposals is the creation of new county deals that could give county councils new powers and greater accountability to manage business growth.
The move comes as the Government reviews the future role of local enterprise partnerships. Whatever the outcome of the review and county deals proposal, Oliver feels the future is bright for Surrey.
“We are resolute that whatever opportunities, resources and governance mechanisms are available to use, we will re-focus attention on the Surrey geography, that we retain a relentless focus on where we can add value from working together and that we remind everyone of the fundamental role that Surrey plays in driving the regional and national economy,” he said.