4. Looking towards 2050
Overview
A series of transformational trends will influence how prosperity in East Sussex is shaped over the next 26 years. The most critical of these are climate change and its profound global and local implications; the drive to net zero; digital transformation and the implications of artificial intelligence; the ageing population; and changes to working practices. These will impact all aspects of the economy, including business opportunities, future skills needs and travel patterns.
Linked with the earlier analysis of the county’s economy, these inform the development of a core scenario for future economic development.
Introduction
This Economic Prosperity Strategy for East Sussex looks ahead to 2050. It is therefore generational in timescale. This means that the young adults completing their college studies in summer 2024 will be well into middle age by the time the Strategy is delivered. By that time, many of the toddlers currently in nurseries across East Sussex will be parents with children of their own. The Economic Prosperity Strategy must do what it can to ensure that the toddlers of 2050 (and their parents and grandparents) continue to thrive within the county.
Over this timescale, a series of transformational drivers will be at play. The Economic Prosperity Strategy will need to both anticipate and navigate these. These relate to climate change and the drive to net zero; digital transformation and the implications of artificial intelligence; the ageing population; and changes to working practices.
In some senses these drivers are generic and universal; they will affect every local economy in the UK (and often beyond). However, the form they will take is uncertain. They are interconnected and therefore complex. In addition, their consequences are likely to be specific to East Sussex given its demography; its economic and business structure; its settlement structure, transport and digital connectivity and location; and its landscape and environmental assets and challenges. This all means that there is, in practice, a good deal of uncertainty and risk (both upside and downside).
This chapter explores the likely key drivers of socio-economic change over the next 26 years. It then sets out key themes within an overall growth scenario for East Sussex. This is important in framing the Economic Prosperity Strategy as a whole.
Key Drivers
Climate change and net zero transition
Economic prosperity over the next 26 years will be determined in part by the process of climate change, and the extent to which local areas (and people, communities and businesses) are able to mitigate its consequences and adapt to it. In East Sussex, there are particular challenges given its coastal setting, its vulnerability to flooding (the implications of which are already being seen), and its extensive and highly valued designated landscapes and the need to protect them. The process of climate change will affect visibly its land-based sector; its ‘blue’ economy (which relies on the marine environment as a critical resource); and its visitor economy – but it will have an impact on all sectors, across the economy.
Nationally (and internationally), the commitment to net zero carbon is a direct response to the challenges of climate change. The UK is legally committed to achieving net zero carbon by 2050 (i.e. within the timescale of this strategy). Although some interim milestones have been delayed by UK government (linked, for example, to the ban on the sale of new petrol and diesel cars), the imperatives surrounding the overall transition to net zero carbon remain in place. For much of the local economy, the consequences will be substantial. By 2050, manufacturing processes will be different; patterns of mobility will be transformed; construction processes will rely on different materials and methods; and land use patterns may be unrecognisable.
The ageing population
Another major societal driver relates to the ageing population. Already East Sussex has a relatively old population, and demographic projections suggest that it will become much older in the decades ahead – both absolutely and relative to the rest of the UK. By the mid-2040s, more than a third of its population will be aged 65+.
In many respects, the growing number of older people is to be celebrated: people are living longer, many are also healthier for longer, and retired people often form the core of many voluntary and community activities. But it is creating pressures too, particularly in terms of the escalating costs surrounding health and social care, and in relation to the affordability of state pensions. These issues are becoming increasingly spatially concentrated: the UK’s large cities will age relatively slowly, but much of rural and coastal Britain will age “rapidly and predictably” (Source: Chief Medical Officer, 2023, Chief Medical Officer’s Annual Report: Health in an Ageing Society).
The implications are substantial. A recent report by the International Longevity Centre suggested that nationally, the state pension age would need to rise from 66 to 70 or 71 by 2050 to maintain the current dependency ratio (Blog published by the International Longevity Centre UK, 5 February 2024: “The UK and other ageing populations will have to increase their state pension age to 71 by 2050 to maintain the number of workers per retiree”. In the context of this blog, the International Longevity Centre defines the dependency ratio as "the percentage of people aged 65+ relative to the working adult population aged 15-64". On some definitions, children are also included in the calculation, so older people and children relative to the working age population). This could add five years onto working lives. The inference is that on average, workers will be older, employers will need to adapt, and there will be a need to support people as they work for longer.
The future of work
In parallel, however, substantial changes are already underway in the nature and process of work. The World Economic Forum, for example, has observed a shift away from the “linear transitions” of yesteryear (from school to specialised training, to a progressive career ladder in ‘a job for life’ and then retirement). Instead, workers are pivoting between professions with significantly different skill sets and navigating mid-career job transitions accompanied by substantial reskilling and upskilling. It concludes that these pivots are “as important to the success of firms as they are to the prosperity of workers” (Source: World Economic Forum, 2020, Future of Jobs Report). Equipping both workers and businesses to pivot will be a key theme for the Economic Prosperity Strategy in the period to 2050. Changes are also occurring to workplace locations, with homeworking becoming popular for those able to do so.
Artificial intelligence and digital transformation
Processes of this nature are both enabled and necessitated by profound and pervasive digital transformation. This is impacting on all parts of the economy. It variously involves artificial intelligence, automation, Internet of Things (IoT), robotics and big data, and it is considered by many to be the fourth industrial revolution. It is transforming the way people live and work, and the pace of change is phenomenal. The first-generation iPhone was launched in 2007 – some 17 years ago – and it has transformed many aspects of social, economic and community life. Over the next 26 years, the pace – and profundity – of change is likely to be even greater.
Looking ahead, there will be new industries (linked, for example, to cybersecurity and gaming) but also substantial changes to existing activities and sectors – from healthcare, through drug discovery and life sciences more broadly, to financial services and beyond. Indeed, the British Council (amongst others) has noted that around two-thirds of today’s students will be employed in jobs that do not yet exist. This means that rather than assuming the job roles/ occupations of their parents’ generation, they will need “to grow into critical and creative citizens who are able to shape the future for themselves” (see British Council: Preparing young people for the careers of the future).
Global context and local focus
Across these different drivers, the pace of change is rapid. As noted already, there are inherent interdependencies – so, for example, the changing nature of work owes much to the process of digitisation.
But the nature of change is also unpredictable. This is magnified by uncertainty in the global geo-political economy. Over the two last decades, there has been a global financial crisis and a global pandemic. Nationally, the UK’s departure from the EU has also had profound consequences. Currently, there is war in Ukraine, conflict in the Middle East and the fragilities of international trade and global supply chains are clear to see. The rise of populist governments in different parts of the world is also a factor, as the consensus underpinning key post war institutions is tested.
In combination, the consequence is a level of volatility which is far in excess of that which defined most of the last 26 years. This global volatility and fragility will however shape the growth narrative for East Sussex through to 2050.
But at the same time, there is a growing recognition of the potential for local leadership. Within the UK, successive governments have championed a gradual process of devolution, enabling powers and funding to be better coordinated at local level to support long-term change. Extending this process – and ensuring a clear voice for East Sussex – will be increasingly important over the next 26 years.
Developing a scenario for future prosperity in East Sussex
The key drivers need to frame a positive future scenario for prosperity in East Sussex. A scenario is not simply a forecast of what is expected to happen. Instead, it is a plausible alternative future, informed by different ways in which the transformational trends outlined above could play out.
Based on the nature and character of East Sussex – as described in earlier chapters – a core scenario might be understood as the balance between three main routes to prosperity, each of which will be in play.
A first theme surrounds continued investment into the county – at a greater or smaller scale. This means that economic growth could be supported by higher or lower levels of investment from both the private and public sectors.
Businesses will continue to invest (in sites, in equipment and in their workforce), enabling them to adapt and pivot. The extent to which they do so will determine their ability to navigate effectively the transition to net zero carbon and to pivot in response to changing market opportunities. In parallel, the public sector will continue to invest, at some level, in – effectively – an enabling capacity. This could mean improvements in connectivity and other infrastructure (including with regard to the supply of employment land and transport connectivity). It could also result in targeted but significant regeneration in those parts of East Sussex which really need it – most especially Hastings and, on a smaller scale, Newhaven.
A second route to prosperity is defined around assets within East Sussex. These take many different forms – from the existing micro businesses and social enterprises and the strength of the third sector through to the county’s substantial assets and resources linked to the natural environment (notably the South Downs National Park and the High Weald National Landscape); its cultural heritage (including, for example, the opera house at Glyndebourne, Towner Eastbourne, Hastings Contemporary, and Battle Abbey and battlefield); and the built environment.
Looking ahead, these different assets could define the core of a locally rooted growth narrative. This involves local supply chains and high local multipliers as (for example) independent retailers in the county’s town centres source and sell locally grown food. Moreover, there is a strong commitment to principles of the circular economy – which involves sharing, leasing, reusing and recycling a wide range of products to reduce waste and increase the overall sustainability of consumption. Novel approaches to local procurement (including by the public sector) are also likely to feature.
Looking ahead cultural assets may also be afforded a high value – whether or not this is fully monetised. In other words, local people recognise the benefits associated with their cultural amenities and landscape assets, and they recognise these increasingly to be core to a high quality of life. The inference is that economic output might be lower in relative terms, but levels of well-being and equality are potentially enhanced.
Wealth is a third key route to prosperity that shapes an overall growth scenario. There is, already, substantial wealth within the county. For the most part, East Sussex is – and remains – a very desirable place to live. This is particularly apparent amongst those who are well advanced in their careers or even retired and can afford to buy a house locally. The DFLs (down from London) – as they are sometimes colloquially described – can bring with them significant wealth, and this is an economic driver in its own right.
The (predominantly older) people and households with significant wealth are perhaps less immediately concerned about the challenges of low wage levels in East Sussex, or the limited opportunities for career progression. However they do spend money locally, creating demand for many different services and as a result they create local jobs. They are an important element of East Sussex’s economic make-up and there is a future scenario in which their relative and absolute importance grows further. This needs to be balanced however with the sustainability of the county’s prosperity, especially in relation to the affordability challenges highlighted earlier and the retention of its distinctive character.
An overarching scenario
In practice, all of these routes will be at work in shaping the economic future of East Sussex, within a national and global context. The balance between them will define a core growth scenario.
Wealth is attracted to – and retained within – East Sussex in part because of the quality of assets that the county provides. The county’s assets are also a crucial underpinning of investment into the county, while the process of investment may be critically important in sustaining those assets. In practice all three themes are playing out – even though there may also be clear tensions between them, and some variation at a local level.
The Economic Prosperity Strategy for East Sussex is informed by these three routes – and the broader drivers that underpin them. It is explained in the chapter that follows.