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Building our industrial strategy?

08 May 2017

Naomi Weir sets out some of CaSE’s industrial strategy priorities from our submission to BEIS’s ‘Building our Industrial Strategy’ consultation

On Sunday, it was two years since the UK last went to the polls in a General Election. Since then, we’ve had two Prime Ministers and two Business Secretaries with very different approaches to industrial strategy.  First the phrase ‘industrial strategy’ was akin to JK Rowling’s famous villain, he-who-must-not-be-named. Then, the new Prime Minister announced a new Department with industrial strategy in its name.

The BIS/BEIS Select Committee were off the mark fastest announcing a pre-emptive inquiry on industrial strategy, to which CaSE responded to feed in the initial views of our members and Sarah Main gave evidence. Prior to the publication of the green paper, we said that the renewed focus on industrial strategy was very welcome and the plea was for the strategy to be long-term, ambitious, with buy-in across Government and for it to be a strategy that builds on the UK’s competitive advantage in science and innovation.

CaSE’s submission to the Government’s consultation on the green paper, Building our industrial strategy, followed a period of dialogue with our members, including industry, academia, charities, and further and higher education. The green paper encompasses a very broad range of policy areas and so the industrial strategy has the potential to have a major impact across science and engineering. But so far, it seems that the challenge of shepherding a broad collection of policies and priorities from across disparate bits of Government (and indeed areas of devolved responsibility) into a coherent plan, with the necessary buy-in to be delivered, is yet to be mastered.

This was picked up in the BEIS Committee’s report which found that the Government’s green paper, “similar to the Productivity Plan in 2015, consists of a long list of policy interventions but lacks the framework for future decision-making which should be the core of a long-term strategy. The report also points to early signs that the Government is failing to pursue a co-ordinated approach to industrial strategy across Whitehall…”.

In our submission, there is first a focus on making the strategy a strategy; with a clear vision, intended outcomes and robust ways of monitoring and evaluating if we’re going in the right direction as we go along. Some of the measures we propose are:

  • Public and private R&D spending to reach 3% of GDP by 2025, with separate targets for public investment and private investment and intermediate milestones for 2020
  • A target for inward investment in R&D
  • A target for productivity growth within each sector with a sector deal
  • A target for the percentage of public procurement from SMEs and start-ups
  • A target for the number of apprenticeships that will be at level 4 and above, perhaps with a focus on science, technology and engineering
  • Clear timelines and sustainability targets on any physical infrastructure commitments
  • A target for increasing international student numbers, for instance to maintain a certain percentage of market share

Previous industrial strategies have fallen short, in part because responsibility sat only with the government’s business department of the day, and that department did not have appropriate authority or agency to ensure other departments’ activities were pushing in the same direction, hampering effectiveness. Some of the targets or measurements of this industrial strategy may be at a Government level, but each of its different aspects will need to be owned by specific departments or teams to drive accountability. This must be overseen at Cabinet level to ensure this is truly a cross-government industrial strategy.

One member nicely summed up views I heard from many by saying that this needed to be the industrial strategy. There is more than enough instability and uncertainty already. Certainly review in light of evaluation and changing external circumstances, but create a strategy and stick with it.

In our submission, we haven’t attempted to cover each of the 10 pillars set out in the green paper. Areas that we have focused on include developing skills, investing in science, research and innovation, driving growth across the whole country, encouraging trade and inward investment, and improving procurement. Do have a read of our full submission.

CaSE was far from alone in taking the opportunity to inform the development of Theresa May’s Government’s industrial strategy; we hear the consultation received thousands rather than hundreds of responses. But the deadline was only days before the election was announced and purdah commenced, so it is unlikely much analysis was done before then. However, we are in the position where having an industrial strategy is supported by the major parties – albeit their versions of an industrial strategy would take on different forms. So, it is highly likely that we will be building an industrial strategy later this year, in one form or another.  But for now, along with everyone else, BEIS await June 8th to see what happens next…