UK Industrial Strategy: 10 key points

Posted on 23 Jan 2017 by The Manufacturer

The UK government is set for a “new approach” to support and promote British manufacturing, according to Prime Minister Theresa May.

Speaking at the launch of a Green Paper – a consultative document outlining the government’s Industrial Strategy thinking, the Prime Minister heralded a “new, active role that backs business” in order to create “the conditions where successful businesses can emerge and grow, and backing them to invest in the long-term future.”

The Green Paper coincides with the announcement of a £556m cash boost for the ‘Northern Powerhouse’ – an addition to the £2.9bn of investment in the region already announced.

The government’s proposed Industrial Strategy lists “10 strategic pillars”:

  1. Investing in science, research and innovation

We must become a more innovative economy and do more to commercialise our world-leading science base to drive growth across the UK.

  1. Developing skills

We must help people and businesses to thrive by ensuring everyone has the basic skills needed in a modern economy; building a new system of technical education to benefit the half of young people who do not go to university; boosting STEM (science, technology, engineering and maths) skills, digital skills and numeracy; and by raising skill levels in lagging areas.

  1. Upgrading infrastructure

We must upgrade our standards of performance on digital, energy, transport, water and flood defence infrastructure, and better align central government infrastructure investment with local growth priorities.

  1. Supporting businesses to start and grow

We must ensure that businesses across the UK can access the finance and management skills they need to grow; and we must create the right conditions for companies to invest for the long term.

  1. Improving procurement

We must use strategic government procurement to drive innovation and enable the development of UK supply chains;

  1. Encouraging trade and inward investment policy

Government policy can help boost productivity and growth across our economy, including by increasing competition and helping to bring new ways of doing things to the UK.

  1. Delivering affordable energy and clean growth

We need to keep costs down for businesses, and secure the economic benefits of the transition to a low-carbon economy.

  1. Cultivating world-leading sectors

We must build on our areas of competitive advantage, and help new sectors to flourish, in many cases challenging existing institutions and incumbents;

  1. Driving growth across the whole country

We will create a framework to build on the particular strengths of different places and address factors that hold places back – whether it is investing in key infrastructure projects to encourage growth, increasing skill levels, or backing local innovation strengths.

  1. Creating the right institutions to bring together sectors and places

We will consider the best structures to support people, industries and places. In some places and sectors there may be missing institutions which we could create, or existing ones we could strengthen, be they local civic or educational institutions, trade associations or financial networks.

BEIS - Secretary of State for Business, Energy and Industrial Strategy, Greg Clark.
Secretary of State for Business, Energy and Industrial Strategy, Greg Clark.

Business & Energy Secretary Greg Clark added that the green paper also sets out technologies where Britain has strengths in research and development which could be supported through the government’s new Industrial Strategy Challenge Fund.

These included smart energy technologies, robotics and artificial intelligence, and 5G mobile network technology. The government says this fund is part of £4.7bn of additional R&D funding announced by the Prime Minister in November, a bigger increase than in any parliament since 1979.

The approach outlined today builds on what exists already in sectors like automotive and aerospace – with individual firms taking the initiative to organise their sectors, backed by institutions or organisations which enable vital partnership on R&D throughout the supply chain.

Siemens UK CEO, Juergen Maier commented: “The launch of the Industrial Strategy green paper marks the start of an important journey for British industry. We need a robust Industrial Strategy to prepare our economy for the challenges and opportunities of the digital revolution in manufacturing and other sectors.

“The Industrial Digitalisation review will identify the impacts of digitalisation across UK industrial sectors and how government working in partnership with industry can maximise the opportunities from driving digitalisation. We aim to make proposals later this year for an Industrial Digitalisation Sector Deal. I am delighted to lead this important piece of work on behalf of industry which aims to benefit as many people and businesses across the UK as possible.”

Dame Ann Dowling DBE FREng FRS, President of the Royal Academy of Engineering.
Dame Ann Dowling DBE FREng FRS, President of the Royal Academy of Engineering.

President of the Royal Academy of Engineering, Professor Dame Ann Dowling commented: “I welcome the government’s consultation on a new industrial strategy published today. It provides an opportunity for UK industry, local areas and universities to join together with government to make the UK a great place to found or grow a business. The plans proposed have real potential to benefit the whole country, not just the South East of England. Properly implemented and resourced, they will provide a major opportunity to reinvigorate the UK’s position as a global leader in the innovative engineering and manufacturing that form the backbone of our economy and account for some 50% of our exports by value.

“The strategy will also help to accelerate the growth of emerging engineering technologies and scientific advances that originate from the world-class research and development undertaken in our universities. Advances in areas such as robotics and artificial intelligence, energy technologies, manufacturing processes and materials, and healthcare are set to impact on both society and the economy in the years to come. But we will only be able to make the most of these opportunities if there is also investment in the skills that employers need.  The government’s industrial strategy will be critical in delivering that step change in our skills base.

“The renewed focus and investment in infrastructure and digital connectivity is a vital part of implementing a truly effective industrial strategy, and I welcome the emphasis on this in today’s green paper. Better transport links and communication will enable businesses and their supply chains to be more competitive and have the added advantage of being beneficial to local communities. I am pleased to see that a cross-government approach is being taken to industrial strategy, bringing together the various levers the government has – from procurement to education – in support of growing our economy.”

Crop - Carolyn Fairbairn, Director General, CBI
Carolyn Fairbairn, director general, CBI.

CBI director-general, Carolyn Fairbairn said: “A modern Industrial Strategy will be a landmark opportunity to build a successful, modern economy as the foundation for a prosperous, fairer and more inclusive society. It must help fix the country’s productivity problems and remove the regional inequalities that have dogged our country for generations, having a positive impact on living standards, wages and the future opportunities of many people.

“The CBI has long-called for a new Industrial Strategy and it’s welcome to see the Government creating an opportunity for all sectors to get involved. Our members across every region and nation of the UK will have a fundamental role to play to help shape the thinking and – most importantly – deliver the impact we all want to see.”

CEO of Tharsus Engineering, Brian Palmer said: “The government’s commitment to support the growth of the UK’s robotics and automation sector through its Industrial Strategy is very welcome. Robotics and automation has the capacity to drive significant increases in the UK’s productivity, and help some very present social challenges such as caring for our ageing population.

“Much like the internet has, robotics will yield a revolutionary change in how we work and live. It has applications in every commercial sector and section of society, and offers a great opportunity for the UK. The UK has first-class research universities and a leading high-value manufacturing sector. By supporting the development of the UK robotics industry, and the transition of research into commercially viable products, the UK can be a leading force in what will become a $100bn global market within the next few years.”