Thoughts on the government’s Industrial Strategy and what would improve the final version.
- Scope and ownership: There’s a bit of a confused approach in the document. The document is actually an investment strategy. The difference is important as apart from public sector services, it’s not the government’s Industrial Strategy, it’s UK businesses’ – the government are an interested investor.
- Clear vision: There is a sense of the type of UK that would result if the strategy was successful and also a sense of the government’s mission i.e. to be an active supporter of the business community, but..
- Clear objectives – there’s no measurable impact, no sense of how GVA may increase, productivity, jobs – the ultimate impact. Clearly in business if this fundamental information is missing, it’s difficult to impossible for a board to say whether the strategy is appropriate.
- Do you understand the market? – there is detailed analysis on supply-side economics, export assistance, access to finance, infrastructure etc. However, and the success of the Industrial Strategy is highly geared around this, there is no attention to the demand-side factors – what influences whether or not people want to grow a business? The inconvenient truth is that 30years of intervention does not pay enough attention to the motivation behind the demand. So regardless of the policies around supply, the market is limited by aspiration. That said, you need a…
- A focused strategy
At an international level it’s difficult to know why the government’s approach to supporting industry is better than those of other G20 nations (the competitors). Afterall, we are told we’re in a global race.
Also, nationally, you would expect a choice of sectors (markets) for is policies (products) plus a justification of why government intervention meets the clients’ needs better than other alternatives (competitive advantage). What we have in the document are ‘10 Pillars’ which mixes markets and products in a list which make it difficult to know which measures address which sector needs.
- Alignment – as mentioned above as this isn’t really the government’s strategy, there needs to be confidence that stakeholders can work together to deliver and that other fiscal measures are aligned (witness the NIC rate increase for self-employed). It also needs confidence that the structure to implement is fit for purpose – devolution especially in England and the Local Enterprise Partnership make that less than consistent.
In summary, I’d be tempted to say the structure of the documents needs to improve, but fundamentally it needs clear impact targets and an urgent re-balance of investment to demand-side/human factors to generate the greater ROI we all want.
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