THE term ‘Industrial Strategy’ has been hailed as the foundation on which to build our future. The ‘big plan’ for the UK economy as we go it alone.
This policy promises to ‘build on Britain’s strengths and tackle its underlying weaknesses to secure a future as a competitive, global nation’.
Essentially, this strategy has three key aims: to build on our strengths and extend excellence; to close the gap between us and the rest of the world and to make the UK one of the best places in the world to start or grow a business.
All of this hinges on innovation and productivity.
One such weakness that needs to be tackled head-on is the alarming productivity gap, to which the Chancellor pledged a £500m plug through infrastructure technology and training support in his Budget.
But will it really be that easy?
The fact is that the UK is falling behind the rest of the world. In industrial terms, a typical US worker produces 30 per cent more output than his or her UK equivalent. This issue is only amplified when you get down to a local level.
Official statistics show that Sheffield, for example, is a staggering 19 per cent less productive than the UK national average. It’s vital that we close this productivity gap if we’re to become a world-leading and vibrant economy.
In simple terms, we need to turn ideas into reality to drive both individual and collaborative economic growth. ‘Reality’ can be physical widgets, clever advice, cutting-edge technology, or creative thinking.
It’s not that we’re short of ideas. Quite the contrary. In Yorkshire, and in Sheffield in particular, we’re leading the way. In fact, Sheffield has the second largest number of patents granted per person in all the core cities.
What’s missing is how we can drive forward these innovative ideas through collaboration and, importantly, turn them into commercial successes.
As a region, we’re also behind the pace nationally when it comes to the take-up of initiatives such as R&D tax credits and other growth funding. This is why we welcome the nod towards a simplification of the administrative processes for SMEs in the Budget to encourage more claims.
What many aren’t also aware of is the hundreds of millions pounds now available to help turn these game-changing ideas of tomorrow into commercial reality today.
The Industrial Strategy Challenge Fund has been set up for those projects which will fulfil the policy’s core aims and propel the UK to soaring new heights of innovation. Yet the Government doesn’t yet have the projects to back with the money that it has set aside, presenting a very real opportunity for collaboration between SMEs and our universities to create projects which could get backing.
As I said, the Sheffield City Region is a hotbed of ideas and we’re already home to some world-changing companies, who show us just what it’s possible to achieve.
Whether it’s ingeniously simple water-saving devices (Drenched); advanced telematics technology (The Floow); or new sources of clean fuel (ITM-Power), innovation is alive and well here. We’re also attracting investment from some of the world’s leading manufacturers. For Boeing to build its first factory outside of the US is a big deal in itself, for them to do it here in this city region means we must be doing something right.
So how do we leverage our existing strengths and play a lead role in the UK’s future? To make ideas a reality, we need to work on the ground to bring together businesses and the talent in universities.
This is where firms like Grant Thornton can really support the Industrial Strategy. A main aspect of our work is built around unlocking the vast shared potential in the UK economy and developing new ways to identify and drive a range of growth opportunities. We’re working across all of the UK’s core cities to do this. In the Sheffield City Region, we’re right there at the cutting edge of innovation, working with dynamic organisation of all shapes, sizes and missions every day.
By bringing together the region’s business leaders, universities and others, as part of our continued drive to create a Vibrant Sheffield, we’re together understanding what the Industrial Strategy really means and exploring the areas for collaboration. Together we can foster the right environment to turn brilliant ideas into the businesses that will drive positive and vibrant growth for the UK.
Paul Houghton is a senior partner at accountants Grant Thornton Yorkshire and a board member of Sheffield City Region Enterprise Partnership.