The Industrial Strategy - a preview

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Next week should see the publication of the final version of the industrial strategy, some 16 months after it was first mooted, and 10 months on since the last draft - a green paper - was published.

Recap: Things we liked

  • The approach was consultative
  • The focus was on cross-cutting policy areas aimed at addressing the UK's poor productivity
  • The detail of policy in some areas was to be welcomed including on infrastructure and skills
  • And it was presented as a genuine whole of government plan with the Prime Minister taking the lead

That wasn't to say we didn't have some concerns, which we outlined in our policy digest over the summer:

  • Scant detail on what vision and success metrics looked like
  • No focus on the cost of doing business
  • In two policy areas, 'place' and 'sectors', limited guidance on how, in the former case, more areas would be able to take advantage of Devolution Deals, or, in the latter case, no detail on the what, how and when of Sector Deals

What's been happening?

The Secretary of State for BEIS has been busy since the General election announcing the winners of funding competitions from the Industrial Strategy Challenge Fund, welcoming reviews into different new technologies (such as the creative sector or industrial digitisation), announcing associated strategies (such as on Clean Growth) and engaging far and wide with the business community.

 

 

Alongside all of this activity a number of speeches have been given that shed some light on what we can expect next week. This blog looks at some of these teasers and flags how we might respond if some of them materialise.

 

1. From 10 pillars to five

The industrial strategy green paper set out 10 pillars. Following a speech over the summer the expectation is that this will be crunched down to 5 'foundations' – place, infrastructure, innovation, ideas and skills.

Clearly there are some gaps (where does access to finance or export promotion sit for example?) and the rationale behind this shift will need some explanation. This is because the pillars in the green paper were more or less the right ones having been included in practically every government report on fixing productivity across the last decade (on a more practical level our Innovation Monitor published this week outlined the major role process innovation could play in bringing manufacturers to the productivity frontier.)

 

 

2. It'll be all about productivity

Or 'boosting the earning power of people, places and companies'. Given the UK's woeful performance on this metric this is encouraging, but the metrics used will be important.

While some may argue for metrics simply as a way to beat the government up when it fails to meet them, a more grown up approach is needed - one that recognises that metrics are needed to guide future policy decisions to ensure, for example, we remain on track to deliver higher average wages, local GVA growth and increased business profitability.

 

3. Local Industrial Strategies?

Behind the scenes, LEPs, Mayors and Combined Authorities (where they exist) have been asked to put together plans for their own local industrial strategy.

How these will differ to Strategic Economic Plans or any of the 'Deals' that have been signed with local areas is anyone's guess. Even more so given that the green paper was silent on the creation of local industrial strategies (although they were mooted in the Conservative Party Manifesto for the General election).

Getting the institutional framework right is a boring but necessary precursor to devolving something as important as responsibility for elements of the industrial strategy (we think the Government should prioritise rolling out Devolution Deal structures across England). There is an argument for Mayors, larger Unitary Authorities and Combined Authorities to be involved in local industrial strategies but the case needs to be made for anyone else being involved.

 

 

4. Sector Deal Guidance

Our extensive work with a number of manufacturing sub-sectors over the summer flagged the urgent need for Sector Deal guidance. Back in August a BEIS spokesperson said "we intend to publish guidance shortly".

Flash forward to November, no guidance has yet been published while over 60 sectors of the economy are actively working on a sector deal to submit to government.

We suspect guidance will be rolled into the White Paper with the line spun that 'the green paper was only consulting on the concept of sector deals, not requesting them'. But that line would run contrary to statements made by Ministers outlining them as:

an open challenge to industry to come to Government with proposals to transform productivity, earning power and investment in their sector.

And even going as far to provide an email address on how Deals should be submitted.

 

 

5. A name change?

Some sectors complained that the term 'industrial' was too limited and rooted in the past, missing out the contribution of their sector (e.g. services).

This seems to miss the wider use of the term 'industrial' or 'industry' e.g. service industry, creative industry, financial services industry even Standard Industrial Classification – the framework for categorising all activity within the economy.

Changing the name from an industrial strategy, when everyone knows what that means, would reinforce the developing impression (as a result of the hiatus over the summer) that the industrial strategy will be more about PR than tangible delivery.

Let's see what happens next week.

Got 10 minutes to spare? Listen to our podcast on what UK manufacturers made of the Industrial Strategy green paper.

 

Author

This person has now left EEF. Please contact us on 0808 168 1874 or email us at enquiries@eef.org.uk if you have any questions.

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