Investment at home is the key to exporting abroad – with Jaguar Land Rover a prime blueprint for overseas success, says Lord Kumar Bhattacharyya.
In a speech to the House of Lords Grand Committee, the Midland peer, founder of WMG, the manufacturing arm of Warwick University, hailed JLR as a template for exporters.
Lord Bhattacharyya said: “We cannot rely just on banking or on our aerospace industry. For our businesses to grow they must succeed in export markets as well as at home.
“The first step to achieving this is a competitive exchange rate. For many years, British exports were strangled by high sterling, and we must not let that happen again. The Bank of England has a major role to play by not rapidly increasing interest rates.
“Stable exchange rates clear the way for government to help create an innovation framework that helps businesses develop their product base. This is the way to sustainable growth.
“For proof, look at the export data by region. In most of Britain, exports were flat in 2013, but in the West Midlands exports were up a staggering 14 per cent.
“Why? It cannot be the exchange rate, or tax rates, or regulation. No, the reason is that one company, Jaguar Land Rover, is enjoying huge success, now accounting for almost a quarter of all British exports to China.
“When the global market was in crisis, JLR spent billions of pounds on researching innovative new products. It spends £100 million a year with WMG on R&D. Now it is reaping the rewards. Naturally, the companies which export so successfully will need to build factories in their biggest markets. Crucially, however, the benefits of this expansion will also be felt at home.
“How can we spread this success more widely? First, we must help more businesses invest in Britain for the long term.
“We are beginning to do this with the UK Business Bank. However, compared to our competitors our help is insignificant. The Business Bank must be greatly expanded. Secondly, we must encourage industry sectors to work together to identify the scientific challenges that will shape global markets, and fund the R&D that will solve them.”