Coherent Identifier About this item: 20.500.12592/89z4mf

Enduring strengths - Analysing the UK’s current and potential economic strengths, and what they mean for its economic

3 May 2022

Summary

Figure 5 shows that the UK’s RCA in services is large: the UK is the sixth-most services- oriented economy in the OECD, and is the most specialised in services among many of its typical comparators, including the US, France, Germany and Italy (nations with bars above the horizontal axis are those where the national share of services in total exports exceeds the global share). [...] Figure 12 shows that the UK‘s large positive RCA in services has persisted since (at least) 1980, well before the rapid deindustrialisation of the economy was complete.21 Although this specialisation did increase sharply from the late 1990s, peaking around the time of the financial crisis, the services tilt of the economy is clearly a long-standing one, and not simply the product of the past few d. [...] It therefore appears that the UK’s strengths are quite stable over time, and this is especially true over the last decade (as indicated by the steepness of the red line relative to the blue line and the closer fit of the bubbles to this line). [...] The UK’s RTA is a little less persistent over the longer term than that of Germany and France, and this suggests that either the UK has also done a good job of adapting to change, or that (given the low overall levels of patenting in the UK) new technology has outcompeted the innovation that the UK previously specialised in. [...] Creative industries The UK’s creative industries play an important role in the economic and cultural life of the country, and also contribute to its success on the global stage.44 As a policy concept, the ‘creative industries’ date back to at least the late 1990s, when the newly elected Labour government established the Department for Culture, Media and Sport, and the Creative Industries Task Forc.

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