Government firms up intention to invest in skills and infrastructure

The paper sets out a plan to improve living standards and economic growth by increasing productivity and driving growth. To achieve that goal, the green paper sets out ten strategic pillars to underpin a new government approach.

Prime Minister Theresa May said: ‘Our modern industrial strategy is a critical part of our plan for post-Brexit Britain. It will help to deliver a stronger economy and a fairer society – where wealth and opportunity are spread across every community in our United Kingdom, not just the most prosperous places in London and the South East.”

The pillars

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  good 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 – 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.

EEF chief economist Lee Hopley said: “Today is the start of a process rather than a big reveal. The pillars are familiar but that’s not necessarily a bad thing. We all recognise where our economic weaknesses lie and where government needs to direct a bit of additional energy/cash.  

“The prioritisation of cross-cutting policies to improve skills, infrastructure and innovation chime with EEF’s recommendations that government deploy its marginal pound to deliver a more skilled workforce, more reliable infrastructure, better support for growing businesses and a lower cost of doing business. The pillars focusing on horizontal measures should also speak to businesses of all sizes and across all sectors.”

Simon Lloyd, a partner in the National Logistics & Industrial Agency, at Cushman & Wakefield, added: “Through the publication of its industrial strategy green paper, we have seen the Government reaffirm its commitment to delivery of long term infrastructure projects, such as HS2, whilst also committing to plans to expand digital infrastructure. Pushing the UK to the forefront of innovation through technologies such as 5G is an extremely laudable aim, but the Government must follow up with proper deliver, whilst also thinking strategically about other critical planning crunch points.

“There is also a continued focus on the importance of training and skills in terms of delivery. While these are clearly important, overall we would like to see less high level political rhetoric from Government and more detail which businesses can properly plan against.

“For example, what does addressing regional imbalances actually mean in practice? Businesses invest in an area that makes commercial sense for them, with availability of trained labour and access to customers and suppliers a priority.”

You can download the Green Paper here