THE UK government has published its first pass at a new interventionist industrial strategy that seeks to energise the post-Brexit economy by boosting industry, developing new ones and creating growth across the whole country.
UK Prime Minister Theresa May wants to use Brexit as an opportunity to make fresh choices about how to shape the economy. Today, the government published a strategy for consultation that focuses on ten key pillars and sets out a “new, active role” for government in how it helps support industry.
Proposals include supporting sectors that come forward with their own development strategies, boosting research spending and radically overhauling technical education.
“At the heart of the Strategy green paper published today is an offer to businesses to strike new ‘sector deals’, driven by the interests of firms and the people they employ, to address sector-specific challenges and opportunities,” said May.
May’s ‘sector deals’ refer to the ‘cultivating world-leading sectors’ pillar of the strategy. Early work on a handful of such deals is already underway and include Siemens UK CEO Juergen Maier leading on industrial digitalisation and Lord Hutton on the nuclear industry. May has set an ‘open door’ challenge for businesses of any size to come to government with proposals on how to transform and upgrade their sectors.
“As part of the deals, government will be prepared to offer a range of support, including addressing regulatory barriers to innovation and growth, looking at how we can use trade and investment deals to increase exports, or supporting the creation of new institutions to provide leadership, support innovation or boost skills.”
In November, May announced an additional £2bn (US$2.5bn) a year by 2020 for R&D to help put post-Brexit Britain at the cutting edge of science and technology. A new Industrial Strategy Challenge Fund has been created to direct some of this funding into cutting edge research including biotechnology and artificial intelligence. A new commitment to the R&D pillar outlined today is that the UK’s chief scientific advisor has been tasked with reviewing the case for a new research institution to act as a focal point for battery and energy storage technology.
The strategy also includes plans for what the government describes as a “radical overhaul of technical education” needed to address its historic undervaluation in the UK. £170m will be spent creating new Institutes of Technology to provide higher technical education in STEM subjects and meet the skills needs of local employers.
“Our action will help ensure young people develop the skills they need to do the high-paid, high-skilled jobs of the future. That means boosting technical education and ensuring we extend the same opportunity and respect we give university graduates to those people who pursue technical routes,” said May.
The government has also committed to publish a comprehensive careers strategy later this year that will help improve the quality of schools careers advice.
These actions under the ‘developing skills’ pillar follow existing commitments to provide higher-quality apprenticeships and introducing an apprenticeship levy that compels companies to invest in training.
A top message throughout the strategy is the need for government to help drive growth across the whole country, and not just the most prosperous places in London and the south east. To this end the government wants to work with local areas to help identify and develop industrial and economic clusters of businesses, and local specialisms, and put in place the institutions with the right powers to help support local areas of economic strength. This may involve creating new institutions or strengthening existing ones, the government said.
Mike Cherry, National Chairman for the Federation of Small Businesses (FSB), welcomed the new ‘placed-based’ strategy. “Small firms are often the anchors in our local economies – in cities, towns and villages – right across the country.”
Other commitments outlined in the plan include commissioning a review of opportunities to reduce the cost of decarbonising power and industrial sectors and creating a long-term plan to minimise business energy costs.
“Our modern Industrial Strategy is a critical part of our plan for post-Brexit Britain,” said May. “As we leave the EU it will help us grasp the bigger prize: the chance to build that stronger, fairer Britain that stands tall in the world and is set up to succeed in the long-term. And it is a vital step towards building a country where prosperity is shared and there is genuine opportunity for all.”
Terry Scuoler CEO of EEF described the green paper as an important first step: “The end result of this process must be an industrial strategy that lives up to the promise of driving different behaviours and outcomes for the British economy. This requires the whole of government working together to support it, with clear leadership from the prime minister and her whole cabinet.
The strategy is open for all to comment until 17 April.
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