THIS is a hugely important moment for the United Kingdom – a moment when we must prepare a new strategy to earn a prosperous living in the years ahead. Leaving the European Union allows, and requires, Britain to make long-term decisions about our economic future.
We will, of course, be ambitious in the upcoming negotiations and will secure the best possible access for firms to trade with, and operate in, the European market. While the terms of trade with other economies are important, so is the competitiveness of our economy. That is why the Government is committed to a modern industrial strategy.
We start from a position of considerable strength. We are the fifth biggest economy in the world, despite having the 22nd highest population. We have achieved higher levels of employment than ever before – 2.7 million more than in 2010. We have businesses, research institutions and cultural achievements at the very forefront of global excellence. For all those reasons, we attract investment and talented individuals from around the world, but there are challenges.
The first is to build on those strengths and extend excellence into the future. British excellence in key technologies, professions, research disciplines and institutions provides us with crucial competitive advantages, but we cannot take them for granted. If other countries invest more in research and development, we cannot expect to keep, let alone extend, our technological lead in key sectors.
Our competitors are upgrading infrastructure networks and reforming systems of governance, and we, too, must strive for improvement. In industrial sectors, from automotive and aerospace to financial and professional services and the creative industries, the UK has a global reputation, but the competition for new investment is fierce and unending. The conditions that have allowed UK investment destinations to succeed include the availability of supportive research programmes, relevant skills in local labour markets and capable supply chains. If our success is to continue, those foundations must be maintained and strengthened.
The second challenge is to ensure that every place meets its potential. For all the global excellence of the UK’s best companies, industries and places, we have too many that lie too far behind the leaders. That is why, on average, workers in France, Germany and the United States produce about as much in four days as UK workers do in five. It is also why, despite having the most prosperous local economy in northern Europe – in central London – we also have 12 of the 20 poorest among our closest neighbours. We must address those long “tails” of under-performance.
The third challenge is to make the UK one of the most competitive places in the world to start or grow a business. A fatal flaw of 1970s-style industrial strategies was their dominant focus on existing industries and the companies within them. Too often, they became strategies of incumbency. Our industrial strategy must be about creating the right conditions for new and growing enterprise to thrive.
In order to meet those challenges, we have identified 10 pillars around which the strategy is structured: that is, 10 areas of action to drive growth right across the economy and in every part of the country. They are to invest in science, research and innovation; to develop our skills further; to upgrade our infrastructure; to support businesses and help them to start and grow; to improve public procurement; to encourage trade and investment; to deliver affordable energy and clean growth; to cultivate world-leading sectors; to drive growth across all parts of the country; and to create the right institutions to bring together sectors and places.
We have given the go-ahead for major upgrades to our infrastructure, such as Hinkley Point C, Heathrow and HS2, and, in the Autumn Statement, for the biggest increase in research and development spending since 1979.
We are launching a range of further measures – an overhaul of technical education includes £170m of capital funding to set up new institutes of technology to deliver education in science, technology, engineering and mathematical subjects.
Our aim is to establish an industrial strategy for the long-term — to provide a policy framework against which major public and private sector investment decisions can be made with confidence.
Greg Clark is the Business Secretary who launched the Government’s Industrial Strategy in Parliament. This is an edited version.