Good Growth: Prosperity with Purpose – A Blueprint for a Fairer Future

  • Good growth

Dr Anandadeep Mandal, Associate Professor in Finance, University of Birmingham 

In this piece, Dr Anandadeep Mandal, Associate Professor in Finance at the University of Birmingham, explores how place-based investment, workforce inclusivity and green innovation can support the UK in moving towards a more equitable and sustainable economic model so that growth benefits all sections of society.

Introduction

Economic growth has long been the hallmark of national prosperity. Yet, the traditional measures of success—rising GDP, increased employment rates, and corporate profitability—fail to capture the full picture of societal well-being. The UK faces the challenge of achieving Good Growth, a model that ensures economic expansion is fair, inclusive, and environmentally sustainable. This is particularly urgent as the country grapples with regional economic disparities, rising inequality, and the climate crisis.

Good Growth requires social science-driven policymaking that balances economic development with social and environmental wellbeing. Here we explore how the UK can move towards a more equitable and sustainable economic model by focusing on place-based investment, workforce inclusivity and green innovation. It concludes with key policy recommendations for ensuring that growth benefits all sections of society while aligning with climate commitments.

The Challenge: Growth Without Inclusion and Sustainability

The UK economy has grown by an average of 1.5% per year over the past decade (World Economics, 2024). However, this growth has been unevenly distributed across regions, industries, and income groups. Key concerns include:

Regional Disparities: London and the South East contribute over 40% of the UK’s total GDP, while regions like the North East and Wales lag behind (UK Regional Economic Outlook, 2024).

Income Inequality: The UK’s top 10% of earners now take home nine times the income of the bottom 10% (Equality Trust, 2022).

Environmental Impact: The UK remains off-track to meet its Net Zero 2050 targets, with carbon emissions from industrial sectors still too high (Climate Change Committee, 2023).

Job Market Polarisation: Low-paid, insecure jobs have increased, with 30% of the UK workforce in precarious employment (Resolution Foundation, 2025).

If left unaddressed, these issues will deepen social fragmentation, economic instability and environmental degradation. Achieving Good Growth requires bold policy action rooted in evidence-based social science research.

 

Solution 1: Place-Based Investment for Equitable Growth

One of the key drivers of Good Growth is geographic inclusivity. Research shows that place-based investment—targeting underdeveloped regions with tailored economic strategies—can significantly boost local economies (Centre for Cities, 2025).

Why Place-Based Investment Matters

  • Every £1 spent on infrastructure and business support in deprived regions generates £2-3 in local economic output (GOV.UK, 2022).
  • Countries that decentralise economic decision-making experience higher regional productivity growth than those with centralised models (OECD, 2024).
  • The UK’s previous City Deals and Levelling Up Fund have demonstrated positive but limited impacts due to short-term funding cycles and fragmented policy execution (Institute for Government, 2023).

Policy Recommendation

  1. Establish Regional Growth Hubs: A long-term £20 billion strategic investment fund should be allocated to region-specific innovation clusters, infrastructure projects, and business incubators.
  2. Devolve More Economic Power: Local governments should have greater control over skills funding, housing, and transport, enabling them to tailor policies to regional needs.

 

Solution 2: Workforce Inclusivity and Quality Jobs

Economic growth should benefit all workers, not just those at the top. Yet, precarious work, wage stagnation, and workforce disengagement threaten long-term productivity.

The Workforce Challenge

  • The UK has a productivity gap: Output per worker is 17% lower than the US and Germany (OECD, 2023).
  • Wage growth has stagnated: Real wages have grown just 1% per year over the last decade, compared to 2.5% in the 1990s (IFS, 2024).
  • Diversity and Inclusion Gaps: Women, ethnic minorities, and disabled workers still earn significantly less than their counterparts (Resolution Foundation, 2023).

How AI and Technology Can Help

AI and automation will replace some jobs but create new high-skilled roles. Investing in retraining and upskilling is key to ensuring inclusive workforce participation.

  1. Expand Lifelong Learning Schemes: A UK-wide Skills Guarantee Fund should be created, providing free training in AI, digital skills, and green technology for workers facing automation risks.
  2. Enhance Workplace Protections: Strengthen laws around zero-hour contracts and gig economy jobs to ensure fair pay and security.
  3. Encourage Employer-Led Training: Tax incentives for companies that provide in-work training and reskilling programs should be expanded.

 

Solution 3: Green Growth and Sustainable Innovation

Economic growth must be environmentally responsible. The UK lags its Net Zero targets, and sustainable industries remain underfunded despite their high growth potential.

The Case for Green Growth

Policy Recommendation

  1. Create a Green Investment Bank: A public-private Green Investment Fund should be launched to finance renewable energy, carbon capture, and sustainable housing.
  2. Mandate Green Job Targets: Government contracts should require businesses to meet sustainability criteria and create a minimum percentage of green jobs.
  3. Support Small Green Enterprises: Grants and tax relief should be given to start-ups developing climate-friendly solutions.

 

Conclusion: Policy Takeaways for Good Growth

The UK can achieve Good Growth by ensuring economic development is fair, inclusive and environmentally sustainable. Based on social science research, we propose three key policy interventions:

  1. Invest in Place-Based Growth: Establish Regional Growth Hubs and devolve economic powers to local governments.
  2. Create an Inclusive Workforce: Expand lifelong learning schemes, protect workers’ rights and incentivise employer-led training.
  3. Drive Green Innovation: Launch a Green Investment Fund, mandate sustainability targets, and support green enterprises.

These measures will help redefine economic success, ensuring that growth benefits everyone—not just the few—while safeguarding the environment. With the right policies, the UK can set a global standard for Good Growth that is both equitable and sustainable.

About the author

Dr Anandadeep Mandal is Associate Professor in Finance at the University of Birmingham. He is an applied mathematician with both theoretical and empirical interests in the field of quantitative finance. He also has a keen interest in formulating strategies through ‘data-driven problem solving’ approach.  His research underpins a desire to learn, understand and explain the complex dynamics of the key issues in the society ranging from financial economics to healthcare.

Apart from mainstream disciplinary journals, he has several high impact articles involving inter-disciplinary collaborations on health applications, leading to decision making by health organizations like the NHS and the UK Government.

 

Image credit: Micheile Henderson on Unsplash