Manufacturing leaders and industry trade groups are slapping backs today as years of lobbying for an industrial strategy which supports British business looks to have paid off - but will it last?
Business Secretary Vince Cable today announced details of a government strategy to build a long term strategic partnership between government and industry.
Outlining his vision at Imperial College London’s Business School, Dr Cable set out five principle pillars that he sees as being crucial to boosting growth from the private sector, especially manufacturing but also in construction and the creative industries, for the next 20-years.
It will accelerate the commercialisation of academic research and develop a more intelligent partnership between the Government and its domestic supply chain. Focusing firstly on advanced manufacturing, in the aerospace, automotive and life sciences, followed by knowledge intensive industries, Dr Cable’s plan seeks to “back winning technologies and sectors”, rather than “pick winners”.
A key objective is the establishment of a state-backed bank to make funding easier for small and medium-size enterprises (SMEs).
During the announcement Cable spoke about the ad hoc way the Government has made decisions that affect British industry. He said that the Government needed to become more business-like in its strategic decision making if it is to successfully implement this strategy, citing his experience at energy company Shell where business plans often ran beyond 10-years.
He likened the success of long term planning in business to that experienced by British athletes at the 2012 Olympic and Paralympic Games.
He also spoke of the Government’s laissez-faire approach to the economy, where so often politicians have advocated zero state intervention for fear of being accused of picking winners.
Trade bodies including the manufacturers’ organisation EEF, the Society of Motor Manufacturers and Traders and the Institution of Mechanical Engineers, have called for an industry strategy since the 1980s and the demise of companies such as British Leyland and ICI.
During this government administration attempts have been made to produce such a strategy. But the Manufacturing Framework Strategy was shelved indefinitely barely a week before its scheduled launch date in December 2010.
The Growth Review took precedence over this framework, but has failed to deliver the economic growth or confidence that it set out to achieve.
The cessation of the Industrial Framework Strategy dismayed many at the time. Manufacturing advisors such as Andrew Churchill, managing director of engineering firm JJ Churchill, and Juergen Maier, MD of Siemens UK Industry Sector, expressed their disappointment at having their input wasted.
Given this background it is unsurprising that, while today’s announcements are being welcomed by industry, questions are being asked as to why the Government has taken so long to act and how quickly this new strategy will take to gain traction.
During his speech, Cable said: “I am setting out a clear and ambitious vision, a commitment far beyond the usual political timescale that will continue to bear fruit decades later. It will give our businesses certainty, allow them to make their own plans, and know that the full weight of Government is behind them. We will work in a strategic partnership with industry, focusing our support on specific sectors. This is our commitment to growth in action.”
Terry Scuoler, chief executive of EEF, questioned the depth of some of the measures announced today and their recognition across government.
“It is clear that today’s challenge of growing and rebalancing our economy is not something one department or, a group of sectors, can meet on their own,” said Mr Scuoler. “We need a clear vision for our economy and a strategy to deliver it not only within the Department for Business but, across government, to get behind every company that is looking to invest, export and grow.”
John Cridland, CBI director-general, hailed the strategy as a “valuable first step”. He said: “The UK is a world leader in many sectors and if we are to secure significant growth in the decades to come, the Government must enable them to capitalise on their competitive advantages and stay ahead of international rivals.”