Five burning questions about sector deals that the Industrial Strategy green paper does not answer

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The first pillars of the Industrial Strategy green paper are cross-cutting; they apply economy-wide and impact on all businesses. And since the publication of the green paper at the end of January, we’ve been asking for your views on how industrial strategy can address the UK’s long standing challenges in terms of skills, innovation, infrastructure, and trade

 

But this is not all. The green paper also acknowledges the need to adopt a sector-specific approach in identifying barriers to growth and long-term opportunities within particular industries and in tackling these challenges with sector-specific interventions. Yet a number of questions about Sector deals remain unanswered in the industrial strategy green paper.

1- How to define sectors?

The green paper excludes a list of misconceptions about sector deals:  

  • Sector deals will not be confined to traditional or existing sectors.

  • Sectors will not be necessarily limited to industries as identified by SIC codes for example.

  • Sectors can be as narrowly (e.g. niche sectors) or widely (e.g. supply chain) defined as required.

  • There will be a focus on challenges and capabilities.

But then how to define sectors in this context?  What sectors are likely to get a deal?

2- How to qualify for a sector deal?

The green paper gives a list of initiatives for early sector deals: life sciences, low emission vehicles, industrial digitalisation, nuclear industry and creative industries. But it clearly states that the list is not exclusive nor definitive and stresses the government’s willingness to work with any sector.

 

Yet the question is: what are the mechanics of securing a sector deal? Government sign off process remains to be determined.

 

3- Who will qualify for a sector deal?

The current consultation takes a different, more hands-off approach than the previous Sector Councils. The green paper calls companies with a shared set of objectives to come together, identify barriers and areas where the government can unlock growth.

 

Yet the green paper says little on the framework of its collaboration with businesses. How will businesses come together? What kind of institutions should be put in place to make this happen? How will they ensure that businesses achieve their part of the deal?

4- Sector deals, but what for?

While sector deals should set out detailed plans to address challenges such as productivity, innovation or investment, the green paper says little about the desired outcomes and how to measure them.

5- What deal?

One thing is for sure, there is no new money for sectors – at least for now. But there will be some sort of government intervention. And the green paper lists as many different ways of public intervention for specific industries such as dealing with regulatory issues, promoting new technologies or reducing barriers to export.

 

Yet in a world of limited funding, it remains unclear how many resources – human and/or financial – will be devoted to sector deals and what kind of intervention the government is aiming to achieve.

  

Tell us your view - Are you in a sector where you are facing sector-specific barriers and challenges? How could a sector deal address these challenges?
You can tell us what you think by email: research@eef.org.uk or on Twitter: @EEF_Economists

 

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