16 March 2009

Launch of Professional Services Global Competitiveness Group report

Introduction

Thanks to Mark Gibson [Chief Executive of WIG] for his opening remarks, and thanks to WIG for organising this event today.

It is appropriate that this event should take place under the auspices of the Whitehall and Industry Group. WIG’s membership is drawn from Government Departments and a wide range of industry sectors, some of whom are also members of the Professional Services group.

WIG therefore embodies the type of collaboration between the Government and the private sector that has made this report possible.

I am pleased to see such a diverse range of WIG members represented here. This reinforces the central message in our report: that the professional services industry has a role to play in supporting all sectors of the economy.

Membership and remit

The Professional Services group’s original remit was to focus on the role of this sector in supporting the City as a centre for financial services. But our work has revealed that the professional services industry has a much wider role to play, and indeed has a far broader reach than just London and the South-East.

Clearly, it would have been impossible to cover every conceivable type of professional service in our group’s membership. But, we have sought to include a representative cross-section of the sector. And we have highlighted issues in areas of the professional services industry which traditionally receive less publicity, in spite of the magnitude of their contribution to GDP. I think for instance of the maritime sector in this respect.

Despite its broad membership and the range of issues under discussion, group members have nevertheless been able to agree on the high-level messages which underpin a shared vision for the sector in the medium to long term.

Our professional industries are inter-connected with many different sectors of the UK and global and economies, through financial services and other high value services, such as ICT, and R&D. Current global economic conditions are taking their toll on all sectors of the economy, without exception. But the professions seem to have shown resilience. Some short-term restructuring may be necessary to weather the downturn, but I am confident that the sector will remain buoyant in the longer term.

Developing a robust vision for the sector over the next 10 to 15 years is therefore crucial. This is the right time to do so, and I believe that this report sets out a credible blueprint for a sector that will continue its leadership role well into the future.

Sir Michael Snyder will set out further details of his vision when he speaks to us in a moment.

The report rightly points out the benefits to the professional services industry of working with the Government. This has been a mutually beneficial relationship, which I hope has laid the foundations for an ongoing dialogue. There are two aspects of this dialogue that I would personally like to see take centre stage in the future:

Global markets

Firstly, I have been impressed by the extent to which the UK exports its professional expertise. The professional bodies such as the Law Society and RICS have a key role to play here and I applaud the work that they are doing.

This report takes the view that our international work should be collaborative. Our aim is for the professional services sector to remain “globally competitive” in the future. And it’s clear to me that the old, adversarial interpretation of the word “competitive” is no longer sufficient to serve the globalised, interconnected economies in which we function.

So I am heartened by the sector’s desire to work together to enter new markets overseas, co-operating on education and training, and issues such as regulation. The benefits of these symbiotic relationships between professional services centres will be felt widely, and should generate positive knock-on effects for the wider opening of markets, as well as attracting further business to the UK.

Public policy objectives

The second aspect I would like to touch on concerns the role for professional services firms in contributing to public policy objectives. The report brings out several key themes in this respect.

Firstly, I am impressed by how seriously firms in the professional services sector appear to be taking corporate responsibility. The professions have a central role in raising awareness of corporate responsibility, and setting a positive example in emerging markets. Corporate responsibility should be at the heart of the UK “brand”.
Secondly, skills and human capital are central to the vision of a competitive professional services sector. The UK professions have an unrivalled talent pool from which to draw, and have showed they have the flexibility to meet client demands. Our stock of intellectual capital will stand us in good stead for continuing to develop robust global standards and provide leadership in terms of corporate governance. Indeed, today’s tough economic conditions have shown the importance of implementing robust corporate governance standards - and their contribution to future financial stability will have to be significant. The cost of shortcomings, whether they be on the part of institutional shareholders or Boards of Directors, as we have recently seen, can be very high.
Finally, the role of the Government as a client of the professional services sector should not be overlooked. The Office of Government Commerce has made a valuable contribution to this report by sharing its experience as a consumer of professional services.

Next steps

As we look to the future, we will need a wide-ranging debate on the future of professional services. I would welcome the views from the sector, from academia, and from the users of professional services on how we can best develop policy responses to the challenges the sector will face in the medium and long term.

Sir Michael will now set out some further details of what exactly the “2020 vision” consists of, following which we will hear from the Royal Institute of Chartered Surveyors, one of the many professional bodies upon which we have drawn for important input to the report. I look forward to an interesting and stimulating discussion.

Thank you.