We were waiting for members to finish reading the industrial strategy white paper before blogging on industry’s response. It turns out they are quite busy, but we did have a group of manufacturers together earlier this week to discuss the white paper and ideally what the next steps would be.
Greg’s white paper elevator pitch
The strategy incorporated a number of new funding pots, primarily science, innovation and skills related (especially with net migration falling), as well as setting out fives foundations and four grand challenges that will be the focus of future policy to support productivity growth. There is also a commitment to establish a new independent body to monitor the strategy.
What did manufacturers’ make of it?
There was agreement that the white paper is a good start – building on the announcements in the previous week’s Budget statement and are focused on trying to achieve many of the right aims.
Here’s four of the best that leapt out
- There were many actions contained within the 250-odd pages, overall the individual policy measures are positive, with an emphasis on the role of manufacturing.
- The Business department resisted the temptation for a rebrand and the concept of industrial strategy lives on.
- Government stuck to its guns on the direction of infrastructure investment.
- The innovation package is pretty decent, commitment to R&D to 2.4% of GDP should help secure additional resource as it becomes available.
- Some guidance should aid sector deal process.
They also agreed it would have been even better if…
- Clearer vision and choices – the UK cannot be world leading in everything and the goals need to be more specific.
- Being more ambitious about rolling out devolution deals beyond mayoral authorities would have offered more strategic decision making to local areas.
- Technology diffusion is an important challenge for manufacturing, which could have seen some initial action from the ISCF.
- Industry has consistently said that industrial strategy should be a whole of government endeavour. The fingerprints of all government departments could have been more apparent on the white paper.
These were on our priority list ahead of the white paper publication.
The work continues
These aren’t necessarily opportunities missed, only postponed as the white paper outlines a number of reviews and consultations in the pipeline. For example, the white paper acknowledges some firms and sectors make a bigger contribution to our productivity performance than others and will undertake a review to understand more about what is constraining the tail of low productivity companies.
Engagement with companies have identified where and how this working document needs to evolve and put these in order of priority:
- Independent council. History is littered with ineffective ones; working with stakeholders the Council’s remit and membership should be quickly agreed.
- The white paper is not intended for a business audience, but if this is to drive change in the economy, industry needs to understand what the strategy is trying to do and how government is hoping to enable this. Business comms should start with clarity on the various funding pots announced and delivery mechanisms.
- Any new review needs to nail the ‘SME’ productivity question – with real-life SMEs at the centre of the review process.
- There must be more progress on devolution deals before local industrial strategies are rolled out.
- Some clarity on the intersection between the work of the future sectors team, sector deals and grand challenges will be needed to reap the benefits of vertical interventions.
- An export promotion strategy fit for a post-Brexit economy.
In the coming weeks we’ll be talking to more manufacturers about the detail of the white and our work to shape its future direction. If you would like to contribute – drop us a line email@example.com
or on twitter @EEF_Economists