- Business Secretary launches flagship Industrial Strategy for the United Kingdom today with a plan to boost the economy, build on the country’s strengths and embrace the opportunities of technological change
- Industrial Strategy Challenge Fund will invest a further £725 million in next generation technologies
- To ensure UK businesses equipped for future opportunities, Industrial Strategy confirms first ‘Sector Deals’ – construction, artificial intelligence (AI) and life sciences – to help sectors grow
- The Strategy also sets out four ‘Grand Challenges’, which will align the UK economy with global trends, informing Government and industry collaboration in the years ahead
The Business Secretary Greg Clark has launched the Government’s ambitious Industrial Strategy (Monday 27 November), setting out a long-term vision for how Britain can build on its economic strengths, address its productivity performance, embrace technological change and support businesses and workers.
With the aim of making the UK the world’s most innovative nation by 2030, the Government has committed to investing a further £725 million over the next three years in the Industrial Strategy Challenge Fund (ISCF) to respond to some of the greatest global challenges and opportunities faced by the UK. This will include £102 million into developing world-leading local smart energy systems that deliver cheaper and cleaner energy across power, heating and transport, while creating high value jobs and export capabilities. The fund will also invest £170 million to transform our construction sector and help create affordable places to live and work that are safer, healthier and use less energy.
The Government has previously committed £1 billion to the first wave of Industrial Strategy Challenge Fund projects, including £246 million in next generation battery technology and £86 million investment in robotics hubs across the UK.
Last week the Prime Minister announced the largest increase investment in research and development (R&D) since the 1980s, rising from 1.7 per cent to 2.4 per cent of GDP by 2027. This could mean around £80bn of additional investment in advanced technology in the next decade, helping to transform whole sectors, create new industries, and support innovation across the country.
The White Paper also confirms Government will be pressing ahead with a series of Sector Deals, with construction, life sciences and AI the first to benefit from these new strategic and long-term partnerships with Government, backed by private sector co-investment. Work will continue with other sectors on transformative sector deals.
Each Sector Deal sets out a clear plan for how co-investment by Government and industry will help each sector realise its potential, while adding billions of pounds in value to the UK economy.
Prime Minister Theresa May said:
“Our modern Industrial Strategy will shape a stronger and fairer economy for decades to come. It will help create the conditions where successful businesses can emerge and grow, and support these businesses in seizing the big opportunities of our time, such as Artificial Intelligence and big data, whilst also making sure our young people have the skills to take on the high-paid, high-skilled jobs this creates.
“As we leave the European Union and forge a new path for ourselves, we need to focus on building a better future for our country and all the people who live in it. With the Budget last week, and our Industrial Strategy in the years ahead, we will build a Britain fit for the future.”
In the Strategy, the Government has identified four Grand Challenges; global trends that will shape our rapidly changing future and which the UK must embrace to ensure we harness all the opportunities they bring. The four are:
- Artificial Intelligence – we will put the UK at the forefront of the artificial intelligence and data revolution
- Clean Growth – we will maximise the advantages for UK industry from the global shift to clean growth
- Ageing Society – we will harness the power of innovation to help meet the needs of an ageing society
- Future of Mobility – we will become a world leader in the way people, goods and services move
Each Grand Challenge represents an open invitation to business, academia and civil society to work and engage with the Government to innovate, develop new technologies and ensure the UK seizes these global opportunities.
Business Secretary Greg Clark said:
“The way we earn and live our lives as workers, citizens and consumers is being transformed by new technologies. The UK is well-placed to benefit from this new industrial revolution and we start from a position of significant strength. We have a thriving research and science base and are home to a wide range of innovative sectors, from advanced manufacturing and life sciences, to fintech and creative industries.
“The Industrial Strategy is an unashamedly ambitious vision for the future of our country, laying out how we tackle our productivity challenge, earn our way in future and improve living standards across the country.”
The White Paper follows extensive engagement by Government with industry, academia and business bodies who submitted almost 2,000 responses to the Green Paper consultation earlier in 2017.
The Strategy unveiled today reflects this engagement, with a new and unique partnership between Government, academia and industry, supported by policies that are committed to making the UK economy more productive and giving it a competitive edge in the future and abroad.
The White Paper focuses on the five foundations of productivity – ideas, people, infrastructure, business environment and places – with a clear and complementary vision for each.
Each foundation is supported by a range of policies designed to provide businesses with certainty and reassurance that the UK will continue to have a competitive edge, including:
- the biggest ever increase in public research and development (R&D) investment, which will grow as a share of GDP for the next five years, and contribute to our commitment to reach 2.4 per cent of GDP invested in R&D by 2027 and 3 per cent in the longer term, placing us in the top quartile of OECD countries
- invest a further £725m in a second wave of the new Industrial Strategy Challenge Fund across the UK to respond to some of the greatest global challenges and opportunities and deliver the Grand Challenges and support sector productivity
- increasing the rate of the R&D tax credit for large firms from 11 per cent to 12 per cent and working with small and medium sized businesses to ensure they are accessing the maximum amount of support
- a new Strength in Places fund worth £115m to grow research and innovation strengths in every part of the UK
- invest an additional £406m in maths, digital and technical education, helping to boost our science, technology, engineering and maths (STEM) skills.
- a new National Retraining Scheme that supports people to re-skill and upskill, kick-started by £64m of public investment in digital and construction training.
- a major programme of reform to ensure that our technical education system can stand alongside our world-class higher education system, and rival the best in the world’
- an £8bn increase in the National Productivity Investment Fund, taking it to £31bn and extending it to 2022-23. This will support investments in transport, housing and digital infrastructure
- a strategic investment of £50 million to enable small satellite launch and sub-orbital flight from UK spaceports, as the UK Space Agency works with industry to develop new technologies, infrastructure and services, and establish the UK in the global launch market worth £10 billion over 10 years.
- support for Electric Vehicles through a £400m Charging Infrastructure Investment Fund, £100m to continue the plug-in car grant, and £40m of R&D funding to support new charging technologies for the on-street and wireless charging
- improve our digital infrastructure through £385m of investments to develop next generation full-fibre networks, trial the use of 5G, and boost mobile communications on our railways
- Sector Deals with a number of the UK’s world-leading industries, including life sciences, and construction, that set out a clear, long term plan for how Government is working with and supporting these key industries
- launch an action plan to unlock over £20bn of patient capital investment to finance growth in innovative firms over 10 years. As part of this, we will establish a new £2.5bn Investment Fund in the British Business Bank.
- agreeing Local Industrial Strategies that identify comparative advantages and deliver on economic opportunities across the country
- creating a new Transforming Cities fund that will provide £1.7bn for intra-city transport. This will fund projects and drive connectivity by improving connections between cities and towns that are in and around them
- making additional financial resources available to Local Enterprise Partnerships who demonstrate ambitious levels of reform
To ensure that the Government is held to account on its progress in meeting the ambitions set out in the Strategy, an Independent Industrial Strategy Council will be launched in 2018 to challenge Government on its targets and make recommendations.
Economic Growth Solutions, deliverer of MGP, gives its verdict on the Industrial Strategy
Dean Barnes, Regional Director of Economic Growth Solutions, comments on the launch of the Industrial Strategy:
“Economic Growth Solutions (EGS) supports the government’s long-term plan to boost the productivity and earning power of people throughout the UK and the Industrial Strategy moves us in the right direction.
It is important that we are focusing on both our existing and emerging strengths and invest in the technologies and capabilities that will generate opportunities domestically and across the world.
In the last year alone, we have worked with 1500 SME manufacturers and a large majority of them have called for more support around R&D, investment and ensuring strategic supply chains are opened up so that UK firms can take advantage.
The government’s plan to make additional financial resources available to Local Enterprise Partnerships, who demonstrate ambitious levels of reform, is also a fantastic opportunity to identify, understand and remove barriers to growth for our firms.”
The Industrial Strategy white paper can be found here.
Copyright © Economic Growth Solutions, 29th November 2017.