Thank you for asking me to this important event.
I suspect that we shall hear a lot of Olympic imagery today and competitiveness analogies with sport strained to breaking point or beyond. But this could be a useful starting point.
Business, like the Olympics and sport in general, operates competitively within a framework of agreed rules; instead of the International Olympic Committee, UEFA and Formula One we have the World Trade Organisation, the European Commission and the IMF.
In both fields the pressure of competition throws up brilliant individuals - the Usain Bolts or Steve Jobs of their field. Inevitably, that is where popular attention is often focussed. But look deeper and beneath the brilliance of individuals you can see patterns of national excellence that outlast their achievements. So just as the Chinese have dominated table tennis, or recently the British in cycling, Germany win time and again in the field of advanced manufacturing, France and Italy in luxury goods, and Britain and America in aerospace and business services.
And, of course, there are wider economic benefits of hosting the Olympics just as there are benefits too from acting as host to international business.
I can see that I am already stretching these parallels uncomfortably, but there are some serious points I wish to make on the back of the Olympic analogy about being strategic in our approach, open to global competition, and willing to make the long term commitments to succeed.
One lesson learnt from past British Olympic experience is that it is no good hoping that random individual brilliance will suffice. The Chinese, the Russians, the Germans and others have taught us that without organisation, planning and training our achievements are like to be modest.
Similarly we have come to the conclusion that Britain isn’t like to succeed economically without a more strategic, long term, approach. Laissez faire will not get us onto the podium - we need to identify areas of strategic strength and national importance, and deploy our resources accordingly.
Remaining open to competition is also central to any industrial vision. After the War there were two broad types of model of industrial development: import substitution on the one hand, versus export-led growth.
With import substitution, the nation develops its own model of car, or kettle, or computer behind a protectionist wall. The hope is that by forcing domestic users to buy local, domestic industry can somehow get up to efficient scale. [The drivers of Trabants in the audience can tell me how well that worked out]. If you like, this is analogous to inventing your own sport in order to have a chance of winning. East Germany’s hopelessly inefficient industries are the most apt summary of how protectionism produces losers.
With export led growth, the country instead chooses some area where it aims to compete against the best in the world, with a relentless focus on productivity. Here I would consider Korea’s astonishing post war growth as the example to follow. We buy Korean phones, computers and cars because they are brilliant.
Britain, as a small part of a strongly growing world economy, has to take the latter path. It is why every Coalition speech on the economy should talk above all about exporting. And it should mean us not being shy about identifying areas where we consistently excel, and doing everything we can to protect and enhance that superiority.
But this drive to measure our success on a level global playing field does not mean no role for the state - in fact, it implies the opposite. An export led approach demands all the support and investment that are needed to compete fairly abroad. The government has a large role in this.
In business, the skills of our future workforce are the most important resource for competing in the global economy. So we must build on our legacy of world class universities and successful research - and correcting our less than stellar performance in skills and vocational training - as we are now doing through rapidly expanding apprenticeships.
And we must also take another clear lesson from the sporting world: top performers need to compete alongside the very best in the world, no matter where they come from. Look at how the Spanish and British football leagues have benefited from the enjoying the services of world’s best players. Similarly keeping our borders open to entrepreneurs is a vital part of our economic policy. So many of the great businesses of the future will be founded on the inspiration of the foreign born.
And our top scientific establishments are a meeting place for brilliant minds from dozens of different nations. They must remain so.
At a more mundane level, it is well known that multinationals help drive productivity by spreading best practise round the globe - and they do this by allowing flexible movement of their staff. And we should not forget that one of our biggest and most successful export industries is higher education; if we are to strengthen it there must be confidence that bona fide overseas students are welcome here, and have the opportunity to work on a managed basis.
Britain is, and must remain, open for business. Just as Britain’s Olympic capability would be diminished considerably without our Afro-Caribbean athletes and refugees who have been welcomed here, like Mo Farah, our continued competitiveness as a country depends on continued openness and flexibility.
Queues at Heathrow, or delays in obtaining visas are bad for business - period.
Similarly, companies must know that their intercompany transfers are outside of immigration quotas and that genuinely talent is warmly welcomed.
All of this flexibility is central to our economic vision, just as it is in the labour market in general; and I firmly believe that as a result we will have a better economy and a better trained workforce.
But besides human capital, good physical infrastructure, as in sport again, is also essential. Countries without quality sporting infrastructure (like India, outside of cricket, or Indonesia) do not do well in the sporting league tables. We recognise that Britain has lagged behind in real infrastructure. Attempts are now being made to upgrade rapidly, the telecommunications infrastructure - though fast and super fast broadband; railways - where an ambitious expansion programme is underway with Cross Rail, Thameslink and, in time, HS2; and ports - where Europe’s biggest deep water port is now under construction in the Thames estuary.
We recognise too that we need to move rapidly to ensure that energy capacity keeps ahead of demand - particularly gas based power generators and new renewables - both of which can contribute to our ambitious carbon budgets.
We need also to articulate a strategy for airports, having failed to do so properly since the mid 1970s. In each of these areas we are seeking to create regulatory clarity, financing mechanisms to replace banks and simpler, quicker, planning.
These broad imperatives are necessary but not sufficient. If Britain is to move up the medals table we have to establish the UK as the place where global companies want to do business and a place where ambitious British people want to start and grow a business. The Government has sought to create a tax environment conducive to both and the regulatory regime is being systematically simplified and improved via the ‘one in one out’ system, the Red Tape Challenge and tribunal reform.
The figures we have on inward investment suggest that Britain remains one of the most attractive destinations. There is little or no economic nationalism directed at foreign owned companies. Our flexible labour markets have been a key factor attracting big positive investment decisions from General Motors and, more generally, in the car and wider manufacturing industry.
If Britain is to succeed in the competitiveness medals table, it is unlikely to come from trying to be top in everything. It is difficult to establish the deeper roots of British excellence in cycling and sailing or particular track events. But to a large degree success has bred success. Similarly in developing an industrial strategy we have to start by acknowledging that our world beating companies tend to be clustered in some sectors like the creative industries or professional services or some (but not all) advanced manufacturers.
That is not to say that we should ‘pick winners’ in some crude, old fashioned way. Nor should we disregard the fact that globally successful companies, like individual athletes, can pop up in fields which no computer or committee of the great and good would have predicted - like bicycles, swimwear, forgings, satellites and making forklift trucks.
But there are ways in which a sectoral approach can pay dividends and that is the approach I am developing with my colleagues, encouraged by Lord Heseltine. We are trying to develop strategic thinking within sectors for which the Automotive Council is an excellent prototype. That in turn has led to initiatives to develop supply chains - for aerospace, railways, oil and gas, nuclear offshore renewables - using pump priming government finance, government procurement and training schemes (as with the recent initiative to develop the skills needed several years down the track for tunnelling).
And behind a forward looking sectoral approach is also a commitment to developing core technologies as we are doing with the chain of Catapults, - innovation centres for advanced manufacturing, cell therapy, offshore renewables, connected digital, future cities, transport systems and satellite applications - and the work of the TSB more generally.
We do not yet know how the Olympics will play out or what will be the long term implications and lessons. What we have already learnt is that Britain is actually rather better at organising big projects than we often gave ourselves credit for - on budget, on time and without the unwelcome discipline of dictatorship. I am similarly optimistic that the British economy can be turned round and put on a long term, sustainable footing.