EEF has launched a major report this morning - Manufacturing. Our Future. – which sets out our vision for putting manufacturing at the centre of a more diverse and durable UK economy.
In the light of recent economic events a consensus has emerged about the need to rebalance the UK's economy to end our reliance on growth driven by the City of London, cheap credit and public spending. Politicians of all stripes have been talking the talk about the importance of manufacturing in this rebalanced economic nirvana, but they have been decidedly short on detail about what this means in practice.
Manufacturing. Our Future. argues that the UK's future economic prosperity, and ability to face challenges such as globalisation, is inextricably linked to the development of a strong UK manufacturing base. But this will not happen without a different approach by both manufacturers and politicians.
For companies that means focusing on the future and evolving to become more innovative, agile and diverse.
For policy makers, that means adopting a dramatically different mindset in order to create an investment-friendly business environment and directly support those markets and sectors in which the UK has potential to develop a sustainable competitive advantage.
Here we will only deliver the type of economy we need and one that will be well placed to benefit from a world economy that will double in size in the next 20 years with a clear framework for action. EEF sets out the guiding principles which will ensure the UK rebalances its economy and responds to strategic challenges as they emerge on the horizon.
1. Send signals: Companies entering new and developing markets need a clear signal about the government’s long term priorities. Only then will manufacturers’ have the confidence to invest. Government must signal the importance that government attached to specific technologies, markets or investments and the steps it will take to help them succeed
2. Overcome obstacles: government must work with business to identify and overcome obstacles to the growth of new and developing markets, for example skills shortages, infrastructure requirements or bottlenecks in the planning system.
3. Collaborative customer: Government is a major customer for business. Its £175 billion budget offers significant purchasing power in new and emerging markets if deployed effectively. But government must engage more closely with industry to convey its needs and support innovation in these areas. This will require significant culture change if the public sector is to focus on long-term value for the economy rather than short-term cost savings.
4. Target Investment: Government invests in markets directly and also in areas such as skills and innovation that support these markets. With the squeeze on public spending set to tighten, the government must be bold and strategic in its investment decisions. This approach will require government to become better at balancing risk and outlining its decisions against a set of clearly understood criteria.
By adopting this framework government will utilise its influence in markets more effectively and use it to deliver a dynamic, diverse and forward looking economy. But this has to be backed with tangible policies and resources, including:
- A re-established Industrial Bank tasked with investing in the future.
- A £1billion innovation ‘X prize’ for the commercialisation of low carbon technologies.
- More strategic use of procurement in new and emerging industries.
- Progress on improving the business environment, specifically on the tax system, regulatory burden and skills infrastructure.
- A more coordinated approach to expert guidance on economic challenges and responses through the National Economic Council.
This initiative will be accompanied by a series of meetings and events for our members leading up to the next general election as part of a sustained EEF campaign to ensure that the interests of manufacturing are at the centre of the political debate.