The Prime Minister has formally launched the government’s latest x-point plan for the UK economy. This announcement sets out where thinking has got to on a new industrial strategy in a new green paper and will essentially fire the starting gun on a period of consultation with businesses.
Regular readers will know that we have previously set out what we see as the main components of an industrial strategy. Here’s what we know so far and some answers to questions that have been cropping up all morning.
How many points?
Last week we had the 12 point Brexit plan, today’s modern industrial strategy green paper will set out ten pillars, which together underpin government efforts to “increase productivity and drive growth across the country.”
The graphic below sets out what they are.
Does industry think this is enough?
Just to recap – this is a green paper. I know, this isn’t usually how industrial strategy is developed, but today is the start of a process rather than a big reveal.
That said, we can comment on the broad thrust of the pillars. These are familiar. But that’s not necessarily a bad thing. We all recognise where our economic weaknesses lie and where government needs to direct a bit of additional energy/cash.
The prioritisation of cross-cutting policies to improve skills, infrastructure and innovation chime with EEF’s recommendations that government deploy its marginal pound to deliver a more skilled workforce, more reliable infrastructure, better support for growing businesses and a lower cost of doing business. The pillars focusing on horizontal measures should also speak to businesses of all sizes and across all sectors.
What are sector deals and do we need them?
The new strategy is also attempting to ...
‘make Britain a hive of new industries which will challenge the companies and industries of today.’
This is inevitably the bit that whips up the most controversy. Remember when we got it wrong in the 1970s? We don’t want to do that again.
Indeed – so what is being proposed? An ‘open door’ challenge to industry to come up with proposals to transform and upgrade their sector. This is not about additional funding; rather, for business to organise behind strong leadership to address shared challenges and opportunities. The approach is being compared to City Deals and amongst the early movers will be a group looking at industrial digitalisation – which EEF will be contributing to.
As we’ve previously outlined, we think there is some role for government to back the development of new technologies and capabilities in the UK. Whether it’s through the science base, investment in enabling infrastructure or additional funding for specialist innovation resources, the UK cannot hope to win all the technology races by waiting to see which private sector firm, if any, turns up on the day. Other countries adopt a more active role and it’s not unreasonable that we try to do the same.
Whether sectors and technologies can organise themselves as cities and regions have is another questions altogether.
And speaking of regions, is there a big role for place?
It’s got its own pillar – driving growth across the whole country. Amongst the stated objective of industrial strategy is the aim of reducing productivity disparities between regions.
Positively there is a strong emphasis on the need for investment in local transport infrastructure – always the top priority for action across EEF members. Additionally delivery of industrial strategy will need stronger local governance to bring together sectors and places – we think scaling up local authorities is the answer.
Is government being way more interventionist in this strategy?
It’s being more explicit about it this time. Government policy hasn’t always been sector blind (even when it’s claimed to be). The success of the city or the automotive sectors can come about when innovative businesses meet clarity of joined up thinking on the policy front.
To some extent the Sector Deal exercise acknowledges that industry needs to be in the driving seat and government needs to be bold in dismantling barriers or offering a leg up to ensure success. 4IR is a good example – the UK is in catch up mode, but it needs to hear from business what the journey looks like and how government can usefully act to support it.
Will it work this time?
One aims for optimism. There are some new elements in the strategy for discussion, but this isn’t a wholesale wheel reinvention. The consultation process on how some of this should be executed should help provide some foundations for the pillars (note: we’re not fixing the foundations).
Couple of additional things that could help – and we’ve said it before.
Success metrics – the strategy has had a go, but they need a fair bit of refinement if we’re really going to keep track on progress. And if we’re not .. why bother?
Cross government commitment – the fact that the PM has opted to champion this new approach is a good signal that this has some traction across government. But we need to see and hear how all future decisions that impact on industry align with the pillars set out today.
Want to get involved?
This is for business. EEF will continue talking to manufacturers about our detailed response to the consultation. If you’d like to be one – drop us a line: email@example.com.
If you didn’t see it earlier – here’s the reaction from EEF’s CEO
“Today’s announcement sends a strong signal that industry’s calls for a modern, comprehensive and robust industrial strategy have not fallen on deaf ears. The strategic pillars outlined today touch upon some of the key weaknesses, areas of concern and opportunities for business which, if tackled, will provide a huge tonic to Britain’s future economic growth. Government and industry must now work together to meld these pillars into a strategic framework that will deliver measurable, demonstrable results.
“The right industrial strategy will provide the springboard for future British economic success. It must live up to the promise of driving different behaviours and outcomes for the British economy, which requires the whole of Government working together to support it with clear leadership from the Prime Minister and her Cabinet. The fact that the PM has unveiled these plans herself suggests that this message too has successfully landed.”