The UK’s competitive advantage in green innovations
In collaboration with Tony Blair Institute
The United Kingdom is well positioned to be a leader in the ongoing transition to a low carbon economy. Identifying which innovations offer the strongest opportunities for success in the UK is key to unlocking the economic potential of green investments.
Oxford Economics worked in collaboration with the Tony Blair Institute to:
- Identify priority innovations in which the UK has potential to develop a strong domestic industry, by assessing global market growth, reviewing the UK’s existing competitive landscape, and identifying catalysts or barriers to growth.
- Estimate the GDP and jobs impact across UK regions of two difference scenarios of government support for these priority innovations.
- Develop projections of UK GDP and productivity under macroeconomic scenarios with targeted subsidies for priority green innovations, supply-side reforms to boost productivity, and lower electricity prices.
- Explore innovation-level impacts of fiscal support and technological development, in experimental analysis designed for high-uncertainty scenarios.
We found 11 priority innovations, including green financial services, engineering and infrastructure services, and manufacturing of nuclear and renewable energy components.
Priority green innovations could unlock a GDP contribution of £235 billion and 1.2 million jobs in 2050 in a scenario with high government support and favourable market conditions, compared to a GDP contribution of £65 billion in Business-as-Usual. Approximately half the jobs that could be supported by priority innovations in 2050 are in services innovations—primarily green finance. Targeted subsidies for priority green innovations, along with supply-side reforms to boost productivity, could increase UK real gross domestic product by almost 1% by 2035.
The UK has potential to capture a sizeable share of global markets for several green innovations. Directing investment towards innovations that build on the UK’s existing strengths offers the greatest opportunity to capture economic value.
The experts behind the research
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Jake KuyerAssociate Director, Economics & Sustainability
Jake Kuyer is an Associate Director and leads the Economics & Sustainability team within Economic Impact Consulting. He has extensive experience applying economics to challenges around the environment and social impact. He has managed numerous projects across the public, private and third sectors covering a broad range of fields. At Oxford Economics, he works with our economic models, such as our bespoke Global Sustainability Model, to embed sustainability into our offerings. He works with clients to understand both their impact and dependence on the environment, and to achieve their sustainability ambitions.
Prior to Oxford Economics, he worked for a multi-national engineering firm focusing on environmental impact, an economics think tank focusing on social value, and a boutique consultancy specialising in environmental economics. He has earned degrees with distinction from the University of Victoria, Canada, and the University of Edinburgh, UK.
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Sarah NelsonLead Economist, Economics & Sustainability
Sarah is Lead Economist in the Economics & Sustainability team at Oxford Economics. She works with clients to understand their environmental impacts and dependencies, and helps them achieve their sustainability goals. She has professional and research experience in the economics of decarbonisation, energy policy and environmental and economic impact assessments.
Prior to joining Oxford Economics, Sarah worked in economic consulting in Sydney and London, where she worked on energy regulation, anti-trust, carbon forecasting and social welfare assessments. She holds Bachelor' degree in economics and physics from the University of Auckland, and a Masters in Economics from the University of California, Santa Barbara, where she was a Fulbright Scholar. Sarah completed a PhD in climate economics and policy from the University of Cambridge in 2021.
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