The UK’s target for net zero carbon emissions by 2050 is a polarising line-in-the-sand moment for many organisations and institutions. On the one hand, this target provides some serious opportunities for the UK economy for green growth, high value job creation and levelling up across regions. However, to hit this target in just over 26 years, investment in net zero practices and policies must be targeted and swift, eclipsing that of the growth of digital revolution in the last decade.
But we shouldn’t be too daunted. It’s not like we’re starting from scratch. Today’s net zero economy in the UK is worth over £71 billion (GVA) to the UK economy, made up of almost 20,000 active businesses, supporting over 84,000 jobs – and this will continue to grow.
Taken from a recent report we at The Data City conducted with the Energy & Climate Intelligence Unit (ECIU) and CBI Economics, these statistics and insights showed not just the size of the current green economy, but also how the transition to net zero can bring benefits to the economy as a whole and also level up regions across the UK.
For example, there’s a great distribution of businesses working within the net zero economy across the UK today – with hotspots in North East Scotland, Northumberland, Tyneside, North Lancashire and Leeds & Yorkshire. These locations are a hotbed for renewable energy generation, recycling, green energy storage and offshore wind farms, industries that provide productive and highly paid jobs – jobs that pay 28% higher than the national average. So how do we spot more of these opportunities and give direction for regions to invest more in net zero? Well, it all starts with the data.
At The Data City, we use data and technology to help our clients (such as the Home Office, DCMS, Midlands Engine, KPMG, CBI Economics) map the economy; assessing the scale and growth of new emerging industries – like net zero – that can’t be mapped accurately using traditional methods. Harnessing a database of the UK’s 5.2 million companies, we use AI and machine learning to understand and classify who they are, what they do and how they do it.
This means that in real-time, we can classify emerging industries and track their growth over time from over 90+ data points. The machine learning element allows these classifications – we call them Real-Time Industrial Classifications or RTICs – to evolve to include new companies and disciplines, providing us, and our users, with a wealth of data and insight.
We not only track company-level details like website information, financials, employee count and company growth stage, but you can also see insights for national industries, such as the growth of the FinTech sector, the total investment funding for AgriTech companies or the top jobs and skills for other specific industries. This gets really exciting, especially for net zero, when we break this down by region.
With the ECIU and CBI Economics, we harnessed our company and industry level data to provide a list of net zero hot spots in the UK. Locations with concentrated net zero activity, where businesses create jobs and add to the local economy. It was particularly encouraging to see Leeds & Yorkshire at number six in this hotspot list, with Leeds East standing out relative to the size of its economy.
With our real-time data, and using our work with the ECIU as a starting point, we’ve taken a closer look at the net zero economy in Leeds and shone a light on the green businesses driving jobs and growth in the north.
The ECIU report demonstrated the value of net zero to our future economy in the high value jobs it is creating. This is evident in Leeds, where, as highlighted by the ECIU, 4.6% of Leeds’ gross value add (its contribution to the economy) can be attributed to the net zero economy. There are 20,000 jobs contributing to this GVA.
What do these businesses do? Well, Leeds has a broad base of net zero businesses. It’s home to energy providers, energy consultants, renewable energy installers and waste recovery companies.
Businesses like Engie and Sweco, two international companies that have their headquarters in Leeds, provide energy consultancy, helping firms large and small optimise their business, adapt to demand on our grid, and reduce their energy bills. Collectively, their operations are worth around £1bn.
Leeds is home to companies of varying sizes, taking on the grand challenge of net zero. A smaller company that has been experiencing fast growth in this sector is Social Energy. Social Energy is innovating in the home energy production and storage market. They were able to produce the first Duracell energy home solar battery. Their aim is to reduce the cost of electricity for consumers and help balance our grid during peak times. They are part of a growing trend of energy companies with a community focus and provide new options for financing solar for social housing. They help spread the adoption of cleaner and more affordable energy.
The net zero economy in Leeds is growing fast. The number of companies operating in this space has almost doubled since 2010. This growth is likely to continue – there’s roughly an equal proportion of startups and established businesses and it’s not unreasonable to expect the startup firms to help increase the number of net zero jobs in Leeds as they scale up.
What’s true for Leeds, is also happening across the UK, with a wealth of opportunity for green growth and levelling up for local authorities, local enterprise partnerships and regional bodies. The road to net zero 2050 won’t be straightforward, and navigating the economic changes and spotting the opportunities to grow skills and support growth might seem daunting. But with the work we’re doing with our partners – such as our Green Jobs partnership – and the data we’re providing through our platform, we now have the insight and information needed to empower the UK to grasp this green opportunity.
Find out more about The Data City – from what they do to how other emerging sectors are growing – by visiting their website.