Theresa May launched the UK’s Industrial Strategy Green Paper and consultation in January. The purpose of this strategy is “to build on our strengths to enable all parts of the country to succeed” as “ opportunities and growth are still spread unevenly across the country”. So its focus is about growth and equality. And with the uncertainty associated with Brexit, it’s also about building the UK’s confidence and resilience.
It all seems very sensible, however, an economic strategy with a regionalised focus isn’t particularly new. So is this one different? And what is going to be critical for this strategy to be successful?
Industrial Strategy – This One’s Different
At a macro level, the Industrial Strategy is being seen as the strategy to reinvent Britain post Brexit. This therefore gives this Industrial Strategy an imperative and taps into the mood of the country – so it’s aiming at both hearts and minds.
At a conceptual level, the Industrial Strategy, even at this early stage, has a very sensible and logical framework. There are ten pillars that frame the government’s new approach, including R&D, skills, infrastructure, business, procurement, trade, energy, sectors, regional growth and institutions.
At an engagement level, the Industrial Strategy has been launched as a Green Paper – a set of proposals for discussion and consideration, and an invitation for collaboration to their development. The three month consultation period is ambitious, however, there is a buzz around the development of the strategy and already the Industrial Strategy Challenge Fund has been announced to support innovation and high-impact technologies which are “on the horizon”.
The strategy confirms the £4.7 billion extra in Research and Development announced in the Autumn statement last year, and proposals to use R&D funding to regions outside the ‘golden triangle’ (46% of research funding is spent in London, Cambridge and Oxford) e.g. the Northern Powerhouse.
Industrial Strategy – Skills, Skills, Skills
The Industrial Strategy Green Paper identifies our poor performance in technical skills as being the reason behind our persistently low levels of productivity. The skills agenda is probably the single biggest issue that needs to be addressed for the Industrial Strategy to be deemed a success when we look back in 10 years time.
The predicted push on vocational education has been confirmed through the strategy’s commitment to create a single clear framework of approved technical qualifications, and the proposed Institutes of Technology which will deliver higher level technical education in STEM subjects. These challenges are also not new; we need vocational education that has ‘parity’ with higher education.
The UK Commission for Employment and Skills (UKCES) has also projected that there will be 2 million new jobs between now and 2020 that will demand ‘higher-level’ skills than in the past, and it’s safe to assume that issues are only set to increase.
This is both a significant opportunity and responsibility for our great UK universities to step up and drive this agenda forward. Universities need to provide vocational and technology education that is appropriate and relevant for new industries as well fee paying student concerned primarily with employability. There is some movement with the recent launch of “modern” university apprenticeships e.g. the Digital and Technology Solutions Degree Apprenticeship. In addition, universities have a role to play in the development of proposed Institutes of Technology.
Industrial Strategy – Innovation (Not Again)
It’s worth noting that many of the most important companies in the world today did not even exist 25 years ago. That trend will only continue, fuelled by digital innovation and demand.
The Industrial Strategy 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.
Innovation is likely to require more regional collaboration than currently exists. This may involve creating new institutions or strengthening existing ones such as educational and innovation institutions, business networks and trade associations, or financial networks and local funds. The success will be down to the effectiveness and leadership of these collaborations.
The Northern Powerhouse is possibly the best UK example to draw upon. There are more than 20 universities in the North, including four that are ranked in the top 100 universities globally. Over a quarter of the UK’s total manufacturing output, and nearly a third of the UK’s total renewable electricity, comes from the North. However, more recently, there has been an innovation focus on a specific sector – the Financial Technology (FinTech) sector has been supported by the development of The Financial Centre for Excellence, as well as the recent appointment of FinTech Envoys.
There is a strong movement for hard and soft devolution throughout the UK. And as a regional strategy consulting firm, Whitecap has been involved with clients looking to capitalise on the growth of regional opportunities. With these recent shifts in focus away from the South East, there is likely to be an ever increasing desire for organisations to actively support their region by seeking local partners and suppliers – one example Whitecap has seen go from strength to strength is Leeds City region’s tech and digital community. Secondly, these approaches are likely to lead to large organisations considering more of a regional footprint moving forward, to engage with local small and medium sized organisations.
It’s looking like 2017 may bring more opportunities for regionally focused collaborative projects in these growing economic hotspots.