A 21stC Industrial Strategy

23rd January 2017

Having spent fifteen years working in and around the Cambridge cluster financing new technology companies, I have seen and experienced first-hand how modern companies and clusters are developed and the way in which a modern 21stC industrial strategy for an innovation economy can play a crucial role in accelerating growth + innovation, especially in areas like bio-tech, agri-tech and cleantech – the 3 pillars of the fast growing bioeconomy in which I had my business career. 

The industrial policy modern business wants to see is unrecognisable from the discredited corporatism of the 1970s. It's an ambitious, modern, entrepreneurial vision of a rebalanced “innovation economy”: the vision outlined by the prime minister today in launching the Government’s new Industrial Strategy.

That’s why, when I came to parliament six and a half years ago, I championed the role that a truly 21stC Industrial Strategy could play, working as adviser to the then prime minister to design and launch the first ever Life Sciences Industrial Strategy in 2011 and Agri-Tech Industrial Strategy in 2013.  Working with David Willets we pioneered a modern Conservative Industrial and Innovation Strategy which I was then honoured to be appointed by the then prime minister to lead in Government as the UK’s first ever Minister for Life Sciences.

I also began writing extensively about what a broader Industrial Strategy co-ordinated across Whitehall could look like, with a strong focus on the 'people and places left behind' by globalisation, and the importance of long term infrastructure and skills investment to tackle UK productivity and competitiveness. A truly 21stC Industrial Strategy, I argued, could help us build a more innovative, competitive, productive, efficient, and creative global innovation economy.

By embracing a more profound vision of an “innovation economy” – with the public and private sectors embracing innovative thinking and technology – I have argued for over a decade that the UK can unlock a new cycle of inward investment and exports, and tackle the structural deficit in our public finances.  

Here are some of my key articles setting out that vision in the last parliament:

This was important before the EU referendum and Brexit.

Post Brexit it will be essential to our economic viability.

With the launch today of the Government’s new Industrial Strategy, we have the chance to continue making Britain the innovation capital of the world.

We should seize it.

PM unveils plans for a modern Industrial Strategy fit for Global Britain

  • New ‘Sector deals’ and investment in research and development will support the industries of the future where Britain has the potential to lead the world – from electric vehicles to biotech and quantum technologies.
  • PM sets out plan to drive growth across the whole country and create more high skilled, high paid jobs and opportunities as part of government’s Plan for Britain.

Prime Minister Theresa May will use her first regional Cabinet meeting this morning (23 January) to launch proposals for a modern Industrial Strategy to build on Britain’s strengths and tackle its underlying weaknesses to secure a future as a competitive, global nation.

At the heart of the Strategy green paper published today is an offer to businesses to strike new ‘Sector Deals’, driven by the interests of firms and the people they employ, to address sector-specific challenges and opportunities. As part of the deals government will be prepared to offer a range of support, including addressing regulatory barriers to innovation and growth, looking at how we can use trade and investment deals to increase exports, or supporting the creation of new institutions to provide leadership, support innovation or boost skills.

The Industrial Strategy is a vital part of the Plan for Britain set out by the Prime Minister last week. It will drive growth right across the United Kingdom, using major new investments in infrastructure and research to drive prosperity - creating more high-skilled, high paid jobs and opportunities. The green paper also sets out plans to strengthen institutions in each part of the country to support their specific strengths - whether it's building up local trade bodies, or creating new educational institutions, making it easier for business to access finance outside London or getting a stronger business voice into local government.

The Prime Minister will tell a Cabinet meeting in the North West this morning that a truly modern British Industrial Strategy must make Britain a hive of new industries which will challenge the companies and industries of today.

Prime Minister Theresa May said:

‘The modern Industrial Strategy will back Britain for the long term: creating the conditions where successful businesses can emerge and grow, and backing them to invest in the long-term future of our country.

‘It will be underpinned by a new approach to government, not just stepping back but stepping up to a new, active role that backs business and ensures more people in all corners of the country share in the benefits of its success.’

Business & Energy Secretary Greg Clark said:

“This is an important step in building a modern, dynamic industrial strategy that will improve living standards and drive economic growth across the whole country. A modern British Industrial Strategy must - build on the UK's strengths and extend excellence into the future; close the gap between the the UK's most productive companies, industries, places and people and the rest; and ensure we are one of the most competitive places in the world to start and grow a business.

"We are inviting businesses and workers to contribute to this vision to help us create a high-skilled economy where every place can meet its potential."

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, including: smart energy technologies; robotics and artificial intelligence and 5G mobile network technology. This fund is part of £4.7 billion 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 research and development throughout the supply chain. In aerospace, close collaboration between government and industry including through the Aerospace Growth Partnership has been instrumental in creating one of the world’s best business environments for advanced engineering, design and manufacture - with thousands of people employed in high-skilled jobs.

Mike Cherry, National Chairman for the Federation of Small Businesses (FSB), said

“FSB has appreciated being part of the discussions with the Business Secretary since last year to help shape the Industrial Strategy. We are proud to be influencing a major government economic blueprint and particularly pleased with the push on skills, infrastructure and connectivity as important drivers of productivity and industry.

“In addition, the moves towards a place-based strategy fit well with the UK small business community. Small firms are often the anchors in our local economies – in cities, towns and villages -- right across the country. Finally, we want to continue to see an emphasis on supply chain respect, which underpins the Industrial Strategy announced today but also the Corporate Governance Green Paper.”

Adam Marshall, Director General, British Chambers of Commerce said:

“The developing Industrial Strategy represents a crucial first milestone in a renewed partnership between business and government, working together to create the conditions for future growth.

“Business communities across the UK will be pleased to see that harnessing the potential of our cities, towns and counties lies at the heart of the government's approach to Industrial Strategy. There are dynamic business communities in every corner of the UK - and it is their future success that will make our country more competitive and more prosperous. “A deliberate and steady approach that leads to long-term change is the right way to go."

Terry Scuoler, CEO of EEF, the manufacturers’ organisation, said:

“This is an important first step towards creating a comprehensive, consistent and long-term industrial strategy that will help Britain adjust to a more globally-focused, post-Brexit economy. Manufacturing has a key role to play and we look forward to working with the Government on crystallising this into a strategic framework that will work and deliver for industry.

“The end result of this process must be an industrial strategy that lives up to the promise of driving different behaviours and outcomes for the British economy. This requires the whole of Government working together to support it, with clear leadership from the Prime Minister and her whole Cabinet.”

The Government welcomes work on early sector deals, including from:

  • Sir John Bell on life sciences;
  • Richard Parry-Jones on the transition to ultra low emission vehicles; 
  • Juergen Maier on industrial digitalisation;
  • Lord Hutton on improving UK competitiveness and skills in the nuclear industry; and
  • Sir Peter Bazalgette on the creative industries.

This is not an exclusive list and the Government is prepared to work with any sector which can organise behind strong leadership to address shared challenges and opportunities. The modern industrial strategy green paper sets out a plan to improve living standards and economic growth by increasing productivity and driving growth across the whole country.

To achieve that goal, the Green Paper sets out ten strategic pillars to underpin a new government approach:

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.

2. 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.

3. 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.

4. 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.

5. Improving procurement – we must use strategic government procurement to drive innovation and enable the development of UK supply chains;

6. 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.

7. 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.

8. 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;

9. 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.

10. 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.

As part of the visit to the North West, the government is also announcing a cash boost of £556 million for the Northern Powerhouse to help create jobs, support businesses and encourage growth. Goole Intermodal Terminal linking rail, sea and road, a 21st century conference centre in Blackpool, and a new innovation fund for Manchester and Cheshire businesses are just some of the locally-chosen projects set to benefit over the next few years. These are alongside many others which improve educational attainment, create jobs, build homes or improve infrastructure.

This latest award of local growth funding is on top of £2.9 billion of Growth Deal funding already awarded to the 11 Local Enterprise Partnerships in the region – an investment which provides targeted financial support to locally-determined projects in order to unlock growth.

Big Tent Ideas Festival

Politics is undergoing a tectonic shift. That’s why this year I launched the first-ever Big Tent Ideas Festival, aiming to tackle the most difficult policy challenges we face. Bringing together over a hundred thinkers across the political spectrum, we discussed new ideas on everything from Brexit to intergenerational fairness, centred around three main themes: Politics, Society and Economy.

The Big Tent Ideas Festival is part of the new Capital Ideas Foundation, and will be setting off round the country over the next twelve months as the forum for the best new ideas in public policy. Click below and join us.

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