Brexit or no Brexit (although that’s not an option now that Brexit means Brexit) the UK needs a comprehensive and ambitious strategy for our economy. This has been clear for some considerable time, but the risks to growth and investment in the coming years up the ante on getting this right. So it’s good that the subject is getting an airing in parliament this week.
In the House of Commons, tomorrow, attention will turn back to the domestic policy agenda in a back bench debate on industrial strategy led by four members of the newly titled Business, Energy and Industrial Strategy Select Committee (Iain Wright, Peter Kyle, Michelle Thomson and Chris White).
In addition to getting lots of engagement from Members of Parliament from across the country (manufacturing matters in all regions of the UK, don’t forget) – what else might we want to hear from the debate? Here’s our top five, in no particular order…
1 A focus on the businesses that generate growth, employment and tax revenues
We’ve heard it said before, it’s businesses that create wealth and jobs not governments. So at least some of the debate should lead back to the ambitions of companies and industries in the UK. What are their strategies for growth in an uncertain world, what are the activities that will drive success in export markets and what types of investment will be needed to secure growth in the future.
The foundations of industrial strategy require policy makers to understand the answers to these questions. And to have some clarity on which bits of the business environment are getting in the way of success or are making it more attractive for businesses to invest elsewhere. Otherwise, industrial strategy is simply a collection of policy ideas that could have happened anyway rather than a coherent framework that lines up with the growth ambitions of the private sector.
2 Future global trends – what are they?
With Brexit dominating the agenda, it would be easy to be inward-looking when making decisions on what policy action we need for growth. Following on from point 1 – this is not how business will be viewing the balance of their opportunities and risks.
Aside from the whole EU situation, we need to pursue the right decisions in response to (for example)
the challenges from sluggish global trade growth that are coming down the track
the need to identify the right international partners to collaborate with on big innovation and research challenges and
maintaining the UK’s reputation as a leading destination for FDI.
3 What are we great at, what can we be great at in the future – beyond sectors?
Currently (I think it’s still current) the approach to industrial strategy is focused on collaboration and support for high growth potential sectors. There have been some positive developments in terms of large scale investments that can give UK industry a decent lead in any global race. But, people would be forgiven for thinking that the UK has backed only a handful of sectors – aerospace, defence and automotive – rather than the 14 (or so) that formed part of the original strategy.
While we should stick with what’s working, we also need to think more broadly about how government and industry can invest together in the technologies and capabilities that we can be great at in the future. And not just thinking about the product but also what innovations we’ll need to implement across whole supply chains to cement growth across industries and regions.
4 A cross-government effort – making it so
There shouldn’t be too much debate about which bits of government need to be involved in this agenda. In short – the answer is all of them.
One department leading from the front on industrial strategy is just fine. Up to the point when cabinet colleagues decide to pursue a very different agenda. We’ve seen this before, so a round of ‘hear, hears’ on better coherence across government to avoid the giving with one hand and taking away with the other would be welcome.
5 What does success look like?
While each of these five points in the industrial strategy debate are equally important, this one might be more equal than others.
At the core of the industrial strategy debate has to be what it’s actually looking to deliver. If we don’t have that clarity, how do we know what’s working?, and how will we be able to judge if all parts of government are signed up to deliver the same agenda? Success metrics are always a tricky ask from government, but it’s not really a strategy without them.