As Felicity pointed out in her blog yesterday, we face a substantial challenge getting the economy back on the path to growth. Without an explicit growth strategy, policy pulls in different directions making the task even harder.
The fiscal mandate provides a clear path towards reducing the deficit – all parts of government are committed to achieving, the OBR measures progress towards it, the chancellor is accountable for it and it can be explained in less than two minutes.
We need something equivalent for growth, we need an industrial strategy.
Key components of our industrial strategy:
1. A vision for the economy
2. Coherence across government
3. Accountability
The vision (in two minutes)
The vision should provide a clear, simple and bold statement that gives businesses a compelling reason to invest here. Like the fiscal mandate, our vision for the economy can be set out in two minutes.
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The UK needs to generate better balanced growth and maintain its position as a leading economy. Four ambitions, set out below, spell out the vision for the economy and can be used as a compass to make sure we are on the right track.
Ambition 1: More companies bringing new products and services to market
Ambition 2: More globally focused companies expanding in the UK
Ambition 3: A lower cost of doing business
Ambition 4: A more productive and flexible labour force
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Why these ambitions?
Ambition 1
The UK must be a leading destination for all aspects of innovation to anchor production and compete with rising R&D intensity across the world. We know that UK manufacturers are planning for growth and they are innovating.
» If we have More companies bringing new products and services to market companies will be investing and innovating which is central to supporting their ambitions to grow.
Ambition 2
The UK must be global in its outlook and create a dynamic business environment that supports high-value investment and job creation. Manufacturers have an appetite to invest, we need to give companies every reason to do it here in the UK.
» If we have More globally focused companies expanding in the UK we will know that the UK business environment is competitive and companies have good reasons to invest in the UK.
Ambition 3
A competitive business environment is important but the job is not done in some areas, such as energy costs. The UK must provide a stable, predictable and competitive regulatory environment and cost base.
» If we have A lower cost of doing business companies will be supported to grow with more cash available for innovating and investing and the UK will remain a major destination for foreign investment.
Ambition 4
Skills needs are increasing and companies are struggling to attract the people they need. The UK must have the talent that a diverse and agile industrial base requires to be competitive in 21st century global markets.
» If we have A more productive and flexible labour force firms will have the right skills to respond to shifts in demand, changing customer needs and economic factors.