UK boosted by digital Singapore and 'Gigafactory'

The past week has seen two announcements that have the potential to significantly enhance UK economic growth over the coming decade.

Nissan cars
On Thursday, Nissan confirmed the go-ahead to build a £1 billion 'gigafactory' to make batteries for electric cars at its plant in Sunderland in NE England.Secondly, the government in London announced negotiations had started with Singapore over an ambitious digital trade agreement aimed at making the UK a post-Brexit, "global tech powerhouse".While the Nissan plan is important for the green economy, the future of the British car industry and the 6,000 jobs expected to be create directly and in the supply chain, the Singapore talks have more to do with the £700 billion digital market globally.The UK government regards digital trade key to supporting tech companies as they seek to capitalise on investment opportunities abroad in the post-pandemic, post-Brexit era.International Trade Secretary Liz Truss said: "A cutting-edge deal with Singapore will keep us at the forefront of the technological revolution, ensuring we lead the way in digitally delivered trade and industries like fintech and cybersecurity."The UK will be the first European country to ever negotiate a Digital Economy Agreement, which shows what we can do as a sovereign trading nation."The UK-Singapore digital trading relationship was worth £3.2 billion in 2019, according to latest government statistics, out of Britain’s total tech exports of nearly £63 billion globally.Nayan Gala, founder of London-based startup advisory company JPIN Venture Catalysts, said many of UK companies had room to grow their export business and that Singapore - as one of the four 'Asian Tigers' - was a key market for this and one whose importance would only grow as the digital world expands further.“There has been a great focus on traditional trade and full free trade agreements thanks to Britain’s deal with Australia. However, the future of trade will not be beef and wool but, rather, fintech and e-commerce,” Mr Gala said.“This means that these digital agreements will become vital to future-proofing, and Singapore is one of the strongest digital economies in the modern world, making it the perfect partner for the UK similarly strong tech ecosystem.“There will always be a trade of physical goods. However, as digital products grow to dominate world commerce, a seamless and borderless trade environment will be mutually beneficial to everyone."Meanwhile, the Nissan announcement was greeted as "great news" for the UK's automotive sector by Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT).However, he told the BBC that for the full transition to electric car manufacturing to be achieved, the UK needed more investment in production facilities.Tony Danker, director-general of the Confederation of British Industry (CBI), described Nissan’s investment as "a strong vote of confidence in a greener future for the UK economy, and the workforce of the North East".He added: “This announcement signals the success of concerted efforts between business and government to seize the moment by creating jobs fuelled by decarbonisation.“And it must be the spark for six more gigafactories needed by 2040 to support a thriving electric vehicle market and prompt investment in widespread charging infrastructure.“Ahead of COP26 (climate conference), we know inspiring global action through domestic progress is critical across the UK, and business is already playing its part alongside government to get the change we need to protect our planet for the next generation.”

Read more news and views from David Sapsted.

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