Engineering and technology business leaders are voicing concerns that the government’s proposed industrial strategy will flounder without the right levels of government and private investment commitment.
The warning comes at a time when the industry awaits with anticipation major announcements about the new industrial strategy in this year’s Autumn Statement.
Of particular concern are a number of investment streams currently in place under EU arrangements, which are now in doubt following the Brexit decision this summer. These include seed funds and grants for smaller companies.
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Attendees at the policy forum, which was hosted last night by the Institution of Engineering & Technology (IET) in London, included business leaders from major UK engineering and technology firms, investors and advisers, as well as Dr Ruth McKernan CBE, chief executive of Innovate UK, and senior officials from the Department for Business, Energy & Industrial Strategy the Department for International Trade, UK Export Finance and the Intellectual Property Office.
The joint initiative by the IET and the ICAEW’s Corporate Finance Faculty has already raised important considerations for the UK government’s new industrial strategy, based on research and interviews with the founders, CEOs and CFOs of leading high-technology businesses across the country.
According to the IET, there will be a pressing need post-Brexit to boost public and private investment, filling the gap between R&D funding and the long-term finance that capital-intensive engineering businesses urgently require to scale up.
IET President, Naomi Climer explained: “There has never been a more important time to support the growth of UK engineering and technology to make us globally competitive.
“The sector is the biggest of all UK exports and it is at the heart of Britain’s international competitiveness, its R&D and innovation. We want to see it at the heart of the government’s Industrial Strategy, with the right levels of investment and a particular focus on supporting the SMEs that are so important to our success as a global innovation centre.”
Chief executive of Rolls-Royce, Warren East CBE commented: “There’s a great opportunity for the UK’s engineering sector to increase its contribution to national productivity and competitiveness. The Brits are pretty good at it.”
Questions raised in the paper included:
- Could more be done by the UK government, market participants and professional institutions to ensure a wide variety of sources of private investment – including debt and equity?
- How might the government further support innovative early-stage businesses by co-financing, therefore reducing risk to attract even more private investors?
- Could emerging advanced engineering and technology companies benefit from even better advice and information about sources of investment and about raising finance?