MAG welcomes Centre for Cities report calling on the Government to develop services exports to close the UK productivity gap.

• CEO of UK's largest airports group, Ken O’Toole, says the Government’s new Industrial Strategy should include the aviation sector as a critical enabler for growth  
• Mr O’Toole welcomes Centre for Cities report that says growing exports is key to the Government's twin missions of boosting growth and growing living standards in all parts of the country 
• He points to separate research by WPI Economics showing the UK relies on global connections more than other countries in order to boost services exports 

Manchester Airports Group (MAG) CEO Ken O'Toole has welcomed a report calling on the Government to develop services exports to close the UK productivity gap. 

The Centre for Cities ‘Cities Outlook 2025’ report concludes that cities with more businesses exporting successfully have a better overall economic performance. That can be taken to explain why wages are higher in some parts of the country than others, it says. 

The Centre for Cities says the Government’s forthcoming Industrial Strategy – as well as Local Growth Plans – must focus on the things that will boost living standards in all parts of the country. 

Mr O’Toole agrees the Government's new Industrial Strategy should "play to our strengths" and seek to harness the global potential of high-value industries like financial services, life sciences and technology in order achieve its growth mission. 

But it must also identify the key enablers of export success – particularly the UK’s direct links with the world’s most important economies. 

That makes the aviation sector one of those key enablers and something that should feature prominently in the Government's new economic blueprint for the country. If properly recognised in that way, it should drive the right policies to support making the best use of airports in all parts of the country, including investment in major surface transport schemes that unlock the potential of airports like Manchester.  

He pointed to separate research showing that the sectors the Government intends to focus its Industrial Strategy on are also highly reliant on international access for success, especially given the UK's status as an island trading nation.  

The work, from WPI Economics, looked at 10 service industries and found they are forecast to grow at two percentage points faster than the rest of the economy over the next decade - worth £10.6bn. 

That is because businesses that trade overseas have access to larger markets, gain cutting edge through exposure to greater competition and are more likely to attract foreign investment. All of this enhances productivity, boosts growth and, as a result, improves living standards for those working in these industries, reinforcing the findings of the Cities Outlook report. 

Mr O’Toole said 

"If it is widely accepted that the Government’s new Industrial Strategy should play to our strengths and harness the potential of exportable services, then its architects must also look at what those sectors need to grow. 

"As an island trading nation, we are more reliant on our international air routes than other major economies and if we don’t - as a minimum - maintain current connectivity levels, that £10.6bn could be at risk. 

"And if our starting point is the sluggish economic performance we have seen in recent times, then we don’t just want to preserve the global access we already have, but enhance it in order to turbo-charge growth." 

Mr O'Toole said there were examples of internationally focussed service-sector businesses surrounding all three of MAG's airports - Manchester, London Stansted and East Midlands. He gave the example of Space Zero, a Manchester-based designer of educational spaces that now trades in multiple global markets. 

"Up and down the country, there are hundreds of similar success stories to Space Zero," he said. 

"Operating in fields ranging from TV production and advanced digital to financial services and life sciences, they all have one thing in common – exporters of knowledge, skills and services, rather than physical products. 

"It is firms in these sectors that will be key to turbo-charging the UK economy and realising Chancellor Rachel Reeves’ ambition to deliver the fastest growth rate in the G7." 

The WPI study also showed that the UK is already the second largest exporter of services globally, while Harvard University’s “Global Outgoing Knowledge Index” estimates that UK business travel has contributed 1% to the world’s total GDP over time. 

Mr O'Toole added:  

"We need the right policy support to deliver the connectivity these globally-ambitious firms crave, while also hitting our shared net zero target. 

"That means making enough Sustainable Aviation Fuel here in the UK, it means investing in high-speed rail connections between cities and airports, and it means developing regional growth strategies that recognise the importance of our links with the world’s most important markets. 

"Put simply, playing to our strengths means putting a sustainable growth plan for aviation at the heart of a sustainable growth plan for the UK." 

Read the Ken O'Toole's full thoughts here.