Green shoots: can Sir Philip fix the jobs crisis through fashion?

Sir Philip Green, the owner of Topshop and Bhs, has spent much of his career helping Britain to be fashionably attired. But yesterday, at an event to launch London Fashion Week, he set out a case that may have a more substantial effect on the nation: he wants to restore the fashion industry's manufacturing base – and create jobs.

The tycoon said investing in fashion manufacturing could help the economy by driving growth in a sector that already generates close to 2 per cent of Britain's GDP. He highlighted the potential for the UK of not just designing fashionware but producing it, too.

Sir Philip, whose previous coups include persuading catwalk queen Kate Moss to model for Topshop, said that by bolstering manufacturing the fashion industry will create jobs for young people and reduce unemployment.

"We're manufacturing more in the UK these days," he said. "There is now the opportunity to be competitive and produce in the UK. Arcadia as a group would make more in the UK, if there was more capacity."

Analysis by Oxford Economics estimates that the value of British manufacturing has fallen by two-thirds since 1995. But fashion's share of total manufacturing output has grown since 2009 and some high street stalwarts, such as River Island, have brought more production home. The company increased the number of products made in the UK by 50 per cent in the past year. Elsewhere, Topman used Harris Tweed to create a collection for its last two seasons, while John Lewis is introducing a "Made in GB" label.

Ideally, Sir Philip wants to replicate the success of Fashion Retail Academy in the manufacturing sector. "We need as much focus on the next generation of production talent as there has been on new design talent," he said.

He set up the academy in 2006 and it now has 700 students and the support of 85 brands, including Marks & Spencer, Next and Tesco. The Monaco-based tycoon said Britain needed to teach young people about how manufacturing works and give them the skills to design, make and sell products. "It is important at this time that everyone gets behind the youth in this country," Sir Philip said. "I want to see if we can help them get into business, manufacture goods and get into retailers."

Asked which chains could be interested, he raised the prospect of department stores, such as Harrods and Selfridges, getting involved.

He said: "It may be a group of retailers would be supportive of buying from young designers. I hope the principal department stores in the world would support it if it was put together properly." Yesterday, Topshop announced that it was renewing its 10-year sponsorship of Newgen, a scheme to help new designers.

The Office for National Statistics said this week that unemployment rose by 48,000 to 2.67 million in the three months to December, with the number of young jobless standing at more than a million.

The British Fashion Council urged the Government yesterday to recognise fashion retailing in its definition of the creative industries to give the sector the policy attention and resources it needs.

The council also said that more had to be done to ensure that students graduating all levels had the skills and acumen that "match the demands of business", as well as offering other routes into the industry for non-designers. Citing the apprenticeship programme of the luxury goods brand Mulberry in Somerset, the trade body called for such schemes to be commonplace for individuals and businesses and a "viable option".

The high street received another boost when the ONS said sales volumes rose by a much higher-than-expected 0.9 per cent in January.