A modern Industrial Strategy for a modern Britain
At the end of last year, Business Secretary, Greg Clark, launched the government’s Industrial Strategy white paper. The paper was, on the whole, well-received – and much-discussed at this year’s MIPIM. Sam Craddock, analyst, Capita Transformation, and I have put together our thoughts on this latest vision for the UK.
In the past decade, the phrase ‘industrial strategy’ has become somewhat of a buzzword and, unfortunately, not always with completely positive connotations. An ‘industrial strategy’ has become synonymous with a reactionary approach to specific economic intervention, rather than establishing how the UK can realise its full potential on the global stage. But, with growing international economic pressures, along with the challenges, uncertainties and opportunities of Brexit, there has perhaps never been a more important time to release and deliver a modern industrial strategy.
Greg Clark’s strategy is self-aware and robust, recognising the United Kingdom’s strengths while seeking to respond to its weaknesses. It acts as the basis for a long-term approach to economic development and, possibly for the first time in our post-Industrial history, seeks to establish a future-focused vision in order to reach higher rates of growth. A key success in his paper is the level of detail and analysis, offering a broad evidence-base upon which to build his strategy. On the other hand, this detail can make it more difficult to maintain an overarching narrative to form the spine of the document, diluting some of the impact that this paper needs to deliver its most crucial points. This critical document needs to command attention and be seen as urgent. Regrettably, it is hard to avoid the feeling that it is not always getting the level of engagement and attention it deserves.
This industrial strategy has emerged in a particular climate in which it has had to strike a difficult balance. There is a pressing need for a serious strategy, focused around our economic future, however it has to navigate and garner support across the new socio-political environment which underpins it. The industrial strategy deals effectively with the latter part of this equation through the focus on people, infrastructure, and places, and begins to move positively forward in other areas with the foundations in ideas and business environment. For this reason, it is difficult to call it necessarily an industrial strategy, but rather a modern, interwoven economic plan, which is more sensitive to the underlying factors that have an impact on our economic performance than iterations before it.
While there are many key points, bringing place to the forefront of the economic agenda is critical to sharing the benefits of economic growth, maximising the UK’s many strengths and, potentially, solving our productivity puzzle. Unlocking the local and connecting our regional strengths to drive national productivity through the Transforming Cities fund is an encouraging move from government. The former Chair of the BEIS Select Committee on Industrial Strategy, Iain Wright, has critically highlighted that the UK is the most highly centralised modern democracy and it is no coincidence, therefore, that we have the highest regional imbalances of any advanced economy. Acknowledging this has been part of the political agenda in the form of combined authorities and, in effect, the recognition of city regions. Enabling local places to be more connected helps to spread economic opportunity and give a push to the transfer of control over economic and social prosperity back to economic regions and sub-regions. To assist this transfer, there needs to be local industrial strategies in place; with government playing a crucial role in guiding, supporting and encouraging the development of these individual strategies that acknowledge regional differences and play to local strengths and assets.
The emphasis on Artificial Intelligence is a recognition of the growing global trend towards AI-enabled technologies. However, the critical first step is assuring Britain’s data economy through clean, open data which traverses sector-silos and enables the technology to provide tangible outcomes. AI can only be as intelligent as the data it processes, and with better data comes more focused and more efficient services. AI has significance on a national level, and highlighting the technology as one of the strategy’s Grand Challenges underpins this. AI is no respecter of place and yet through this characteristic it can be used to support the economic development of places across the UK. Quite simply, it can be deployed anywhere and, therefore, stimulate economic growth anywhere.
Enabling UK Research and Innovation (UKRI) to support innovation across the country with more funding and a broader remit is a welcome move from government, strengthening the network behind cultivating new ideas and moving to bring different streams together under one roof. However, the funding in this area is still incredibly fragmented, with a seemingly scattered distribution of competitions and grants where UKRI is at risk of becoming more of a passive facilitator rather than an active partner. We must be bold in seizing the opportunity to empower UKRI to become greater than the sum of its parts, through laying out ambitious freedoms and targets, much more akin to a Fraunhofer model which has seen great success in Germany.
Consolidating the idea of a politically- and socially-aware strategy, Greg Clark’s recognition of the impact of ageing populations is timely and correctly seeks to realise the potential the shifting demographic is likely to have, not only on our own economy, but the wider opportunity in a global market. This is an opportunity for the UK to be truly world-leading in an evolving sector, leveraging our world-class healthcare capabilities with a supportive environment for businesses to develop and grow. The Adult Social Care Green Paper, now expected to be published in 2018 by the new Department for Health and Social Care, must demonstrate continuity with this approach, not only demonstrating how we intend to care for our own ageing population, but how we enable care through developing new technologies and businesses.
It is right and proper that businesses and people seek to critique and debate the Industrial Strategy, as this article has sought to do in its own modest way. However, we must be careful not to merely criticise but rather seek to truly make this strategy work and achieve real impact. By encouraging discourse and bringing our future economic prosperity to the forefront of the public conscience we can help ensure that people, businesses, and politicians are engaged in an economic strategy that seeks to do what is best for the country. We need to acknowledge that this is the beginning of a journey, with this industrial strategy making that crucial first step, and we would encourage the Independent Industrial Strategy Council to play an active part in helping to steer the course between conflicting agendas.
It is beyond what is considered a conventional, ‘industrial’ strategy, occupying a space between the broader socio-political agenda and the overarching economic climate. The result engages with some of the core issues in British society while at the same time drawing our attention to those areas where we can already deliver value on a global scale, as highlighted by the first four sector deals and subsequent work on further deals.
With this, we see this document not necessarily as the ‘industrial strategy’, but rather as ‘Chapter I’ of a living, dynamic plan to facilitate enhanced economic growth and prosperity across the UK. Whether you agree or disagree with this analysis or with the White Paper itself, all should contribute to the debate and to shaping local ‘industrial strategies’ and an economy that equips the country to prosper for the remainder of the twenty-first century.