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Industrial Strategy Commission sets “compelling” structure – but we urgently need to see the detail

 

Anyone would have thought that the government has something else on its mind – what could be more important than the new Industrial Strategy?

Certainly, back in January this appeared to be a priority area – Prime Minister Theresa May used her first regional cabinet meeting on 23rd January to launch proposals for a modern Industrial Strategy which would “build on Britain’s strengths and tackle its underlying weaknesses to secure a future as a competitive, global nation”. This Green Paper closed for consultation at the end of April. The Institute of Economic Development consulted widely on this paper and set forward a comprehensive response.

May’s speech at this week’s CBI conference, in which she pledged that the government’s Industrial Strategy White Paper will offer a new approach that can deliver “economic and social progress for everyone in society”, is somewhat reassuring. But what will actually come out in the paper, due later this month, remains unclear.

Certainly a glance today at the Industrial Strategy website is not particularly illuminating. The government has added 17 additional links to this area of the website since the consultation closed and many of these are speeches or news releases. It has published four papers of substance (Clean Growth Strategy; Made Smarter Review; Industrial Clusters in England; and Growing the Artificial Intelligence Industry in the UK) and these are certainly worth a review:

The fourth of these reports may be considered a little niche as one of the four major contributions to the Industrial Strategy – but not as niche as another of the 17 posts which is ‘Making viral vectors for advanced therapies: apply for funding’. In fact, the ‘apply for funding’ highlights one area where the Industrial Strategy is really offering a warmed-up version of something that went before – the Innovate UK technology funding programme has been rebadged ‘Industrial Strategy Challenge Fund’.

At present, therefore, one cannot help but think that a strategic view is somewhat missing. There still has to be a concern that the Industrial Strategy isn’t going to be specifically stated – but rather it becomes the branding wrapper for all that the Department of BEIS and its predecessor departments undertook anyway.

One group that has been giving this some serious attention is the Industrial Strategy Commission. This group of seven ‘commissioners’ have managed to set aside time from their day jobs since April to develop a 106-page document which sets out their view of a strategic approach (www.http://industrialstrategycommission.org.uk).

This document does provide a strategic view – something that has been missing in the documents released so far by government – and offers much, but in the view of the Institute, the area in which it is most helpful is in the consideration given to structure and approach.

Those of us who have worked in economic development for a period of time cannot help but feel a sense of initiative fatigue. Big picture ideas that create little whilst private industry have carried on and created a modern economy almost despite the role of government. Even the department for Industrial Strategy has had four different incarnations in a decade.

The Industrial Strategy Commission has therefore made three recommendations that we find compelling:

  • Further and faster devolution: The UK’s centralisation is extreme; most places perform below average. Further and faster devolution to towns, cities and regions is essential.
  • New institutions: A new powerful Industrial Strategy division should be established in the Treasury to ensure the new strategy is driven from the centre and embedded across government.
  • Monitoring and measuring success: a new independent expert body is proposed – the Office for Strategic Economic Management – to monitor and measure the long-term success of the new strategy.

Given the track record of the UK in terms of Industrial Strategy it is difficult to argue against any of these principal recommendations and we wholeheartedly endorse the findings. We also believe that they tie in with the urgent requirement to make economic development a statutorily recognised function in Local Authorities, LEPs and the new structures created.

The Government may have other pressing matters to deal with – but the ‘detail’ on the Industrial Strategy is urgently required as the UK moves towards going it alone in the world.

Nigel Wilcock, Executive Director, Institute of Economic Development

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