This is the last in a series of blogs on the UK Industrial Strategy Green Paper published recently by the UK Government. In Blog #9 we articulated how the cluster-based approach can be best executed by identifying the key strengths and weaknesses of different players and building these into an integrated approach.
This blog addresses questions 30, 31 and 32 posed in the Green Paper:
30. How can the Industrial Strategy Council best support the UK government to deliver and monitor the Industrial Strategy?
31. How should the Industrial Strategy Council interact with key non-government institutions and organisations?
32. How can the UK government improve the interface between the Industrial Strategy Council and government, business, local leaders and trade unions?
The decision to constitute a new Industrial Strategy Council marks a welcome return to acknowledging the critical role for government in shaping national industrial strategy - over the past 14 years there have only been brief periods where the government was interested in formal dialogues with UK Industry.
However, this commitment to a new industrial dialogue comes with a set of challenges which need to be tackled. These challenges can be summarised as follows:
- Confusion over the definition of ‘industries’, markets, and technologies, as we have already discussed in Blogs #3, 4 and 5, resulting in a difficulty in identifying the key market spaces of national interest and associated stakeholders.
- The shape of the UK Industrial landscape, which is characterised (unlike Germany with its many Mittelstand companies) by lots of quite small companies (typically SMEs employing less than 50 people) plus a small number of big players, which are largely controlled by MNCs with very broad interests.
- A poor record in translating new ideas into new products/services and companies (we discuss this Chasm II gap in Blog #6). Despite a very strong science and technology base in several areas we still struggle to develop the capacity to compete globally (resulting in some cases in the loss of critical national assets, mainly to the US market).
We welcome the show of commitment from the government through naming a chair for the council, although we note that this individual runs the UK subsidiary of a major global multinational corporation. As more appointees are decided we hope to see them reflect a more representative sample of the UK’s industrial base.
We believe that the new UK Industrial Strategy Council can play a critical role in tackling the growth agenda. The way that the Council is set up and operates, however, requires much greater clarity than currently outlined, so that it does more than provide a discussion forum for key players from the major industrial players (many of whom are centred outside the UK).
In particular, we need clarity in 3 key areas:
- The Purpose and Role of the Council:
- We believe a critical purpose of the Council is to create and promote an integrated narrative about the importance of UK Industrial Strategy for the Growth Agenda, not merely serve as a discussion forum for interested parties
- The role of the Council, therefore, is to engage actively with all sizes of companies across the key market spaces, which we discussed in Blog #3
- The Council also needs to facilitate the right balance between UK-centric players and international companies with very strong influence on value chains in the key market spaces
- Clear definition of the Key Voices and Stakeholders who need to be at the table. The Council needs to represent the voices of different stakeholders, particularly the following:
- Small, medium and large companies (currently the voices of the first two categories can only be seen in token appointments to some committees)
- Research Institutions, who can contribute to the growth agenda – this probably means joined-up thinking for DBT with DSIT and GO-Science
- Investors: it is critical that there is real clarity in the council about their priorities, for example when trying to balance short-term job creation (or securing existing jobs) vs the creation of new companies and industries
- Voices from devolved administrations, who will be critical in understanding how growth is actually delivered in terms of new companies and jobs
- Voices from the key Trade Unions, which have been shut out of this debate for too long, so that the structural implications for employment and jobs are tackled up front
- Clarity on the modus operandi of the Council and impact metrics, so this is not just seen as an open-ended debating chamber. This needs to be addressed as a matter of urgency, so that the potential outputs and measurement of their effectiveness is set out explicitly. We would suggest an approach based on the 12 drivers of growth defined by the Triple Chasm Model, which we discussed in Blog #2:
- Focus on the 8 key market spaces set out in Blog #4, and set up focussed discussions in each of them, where all the key players in the market space are involved. This will be easier in some market spaces (for example lifesciences & healthcare) but harder in others (for example, agri-food where the UK eco-system faces a number of issues)-but this work could be undertaken in partnership with some of the key ministries (for example, the discussions around Energy would need to involve the Department for Energy Security and Net Zero)
- Focus on the key issues around Technology Sovereignty, as discussed in Blog #4. This will need to involve DSIT, GO-Science and ministries involved in questions around, for example, energy security, cyber-security and data security -the important role of the Council here would be to bring a joined-up perspective
- Provide an integrated and coherent perspective on the issues involved in managing competition, tariffs and regulation, which we discuss in Blog #8
Key takeaway from this Blog
In summary, we strongly support the setting up of a new Industrial Council, especially if it is set up as an independent statutory body, but this needs to operate differently from past incarnations. The council needs to be developed with a clear definition of Purpose & Role, Active involvement from all the Key Voices and Stakeholders and a well-defined Modus Operandi and impact metrics.