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Industrial Strategy

There is an urgent need for a long term, stable strategy on innovation/industrial policy

· Industrial Policy,Industrial Strategy,Technology
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The Financial Times (9 May 23) reported that British manufacturers have called on ministers to stop “flip-flopping” and urgently draw up an industrial strategy, warning the absence of a long-term plan is holding back growth and damaging the UK’s competitiveness. The warning by trade body Make UK highlights increasing frustration across industry at the lack of government efforts to help a crucial sector of the British economy ever since the decision to drop the last industrial strategy in March 2021. To quote the FT ,“A lack of a proper, planned, industrial strategy is the UK’s Achilles heel,” said Stephen Phipson, the trade body’s chief executive, adding that the UK was the only major economy not to have one.

The R&D Society has been arguing that case for some time so at last the message is gaining momentum with industrial leaders. It reinforces how the R&D Society can act as a catalyst with business and Government to harness the real commercialisation issues facing business. Make UK’s call for a Royal Commission is however not the right approach as this will just kick the issue into the long grass. Our solution is contained in a previous R&D Society newsletter article (December 2021):

Ten years ago, Sir John Parker, an eminent industrialist and at the time President of the Royal Academy of Engineering made an important presentation at the Foundation for Science and Technology. In that presentation he said, “The UK finds itself in a challenging situation. Our economy has stalled. We have not yet established a clear path towards recovery. This despite our enormous strengths: we are a technocratic nation with world-class engineering and science capability. That is why we must commit to a modern industrial strategy: we must harness these strengths for a new industrial future.” Depressing isn’t it that these words could have been written to reflect today’s situation – it seems as though we have spent ten years going nowhere. He went on to outline five challenges that a modern industrial strategy should address – “ … clear signals for the top of government; innovation and support for new ideas; importance of large companies and need to grow new ones; stability and alignment of government policy; our skills base.” Most importantly he reflected that the CEO of a major German manufacturing company had told him that government policy in Germany isn’t the paragon it is sometimes painted to be but, it is above all else, stable. In a sense it matters less where the goalposts are as long as they are fixed for the duration of the game. By contrast, we had the original Industrial Strategy of the coalition government, abandoned by Sajid Javid, then reinstated in 2017 and then replaced by the Innovation Strategy in 2021. Now we have a further rearrangement of the deckchairs with the Prime Minister, Rishi Sunak, announcing the breakup of BEIS, linking science and innovation into a new department but separating them from the business department. This is hardly the stability that Sir John asked for. This government needs to stop reinventing the wheel, accelerate what is working, drop things which are not and form a cross party, long term, stable view on innovation/industrial strategy as a priority, else we will be saying the same criticisms in 2030.

Dr David Hughes

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