Industrial strategies have a bad name in the UK and deservedly so.
Repeated attempts at government intervention to stimulate industrial sectors led to a string of failures from Blue Streak to INMOS and reached their peak with British Leyland in the 1970s; a company where people who had no interest in making anything other than tea were herded together in huge factories and forced to make cars that nobody wanted and which fell to bits or corroded on the way from the forecourt to your driveway.
Margaret Thatcher did away with state intervention and it has taken a couple of generations of politicians before anyone dared breathe the taboo words industrial strategy.
But just because something is a failure at one point in history doesn’t mean that it is forever a bad idea. The Soviet Five Year Plans resulted in mass starvation and Lada cars, but the Chinese Five Year Plans have lifted hundreds of millions of people out of poverty and set China on the way to becoming the words largest economy.
So, it was with some curiosity that I attended a recent Bessemer Society meeting in London on Industrial Strategy.
While not explicitly mentioned, there has been a kind of industrial strategy in the UK for over a decade as the Technology Strategy Board, now Innovate UK, held funding competitions with the aim of stimulating certain sectors where it was felt that a bit of government cash would help nudge companies in the right direction. Since 2007, Innovate UK has invested £1.8 billion in innovation, which has been more than matched by the private sector. This investment has returned between £11.5 billion and £13.1 billion to the economy. They have supported innovation in 7,600 organisations, creating around 55,000 new jobs.
A recent study on the economic impact of these grants suggests that they have made a substantial positive impact in both survival rates and growth of the firms awarded grants.
A further stimulus has come from the creation of Catapult Centres to accelerate the commercialisation of specific sectors from graphene to compound semiconductors.
But that is very different from the Government actually setting out an industrial strategy.
My main concern with these grand plans is that they quite often end up attempting to deliver solutions to current problems in a decades time, by which time some pressing problems will have been solved and others emerged. The current Industrial Strategy includes the rather predictable old standby, ‘Clean Growth’ which needs nor deserves no explanation. The clunkily titled ‘growing the Artificial Intelligence and data driven economy’ is also self-explanatory, although perhaps “meeting the challenges of the 4th Industrial Revolution” would be marginally snappier.
Mobility covers autonomous vehicles, overlapping with clean growth in its desire to reduce ‘carbon emissions and other pollutants’ (a gold star for whoever managed to steer the document away from focussing solely on CO2 emissions). Most intriguing is the Ageing Population challenge, which seems to provide an opportunity to harness UK innovation and entrepreneurship to provide solutions to a global problem. I’ve already looked at opportunities in this space with wearable technologies, AI and sensors.
Our speaker for the evening., Alexandra Jones who was responsible for the Industrial Strategy policy, filled me with more confidence than most civil servants when trying to predict the future. It is no small task to take a contentious area such as Industrial Strategy and get both approval and buy in from a range of government departments who all have their own divergent agenda’s. While I’d like to see more of an attempt to marry the strategy with the predicted needs of the UK economy in 2030, it is an impressive start.
However, while a plan formulated by China’s National Reform and Development Commission, the body responsible for economic planning, is almost guaranteed to be fully executed, the uncertain political climate in the UK means that all of the excellent work put into the UK strategy so far could be undone by a change of Prime Minister or Government.
But overall it is a good start, and the challenge now, as ever, will be for the strategy to stick around long enough to be executed.