The Industrial Strategy identifies five foundations for strengthening productivity, aligned to the Government’s vision for a transformed economy:
- Ideas – the world’s most innovative economy
- People – good jobs and greater earning power for all
- Infrastructure – a major upgrade to the UK’s infrastructure
- Business environment – the best place to start and grow a business
- Places – prosperous communities across the UK
Earlier this month, Greg Clark, Secretary of State for Business, Energy and Industrial Strategy stated that significant progress has already been made a year after the publication of the Industrial Strategy.
The secretary of State further commented “over the past year there have been important achievements across the five foundations of productivity set out in the strategy. We now have record levels of public investment in research and development, matched by sustained growth in private sector spending. We have the fastest wage growth in nearly a decade and a record number of people are now in work. We have had major upgrades to our infrastructure, with the fastest growth in infrastructure spending in the G7 and big decisions taken for the nation such as the expansion of Heathrow. We are delivering the biggest shakeup to technical education and retraining in a generation to make sure we have the skills we need.”
So, what do these achievements look like to date and what are the Government’s next steps in order to continue working towards the overarching vision of building a Britain fit for the future?
1. Ideas – becoming the world’s most innovative economy
The UK is already delivering record increases in public sector research and development, with a target to reach 2.4% of GDP across the whole economy by 2027. In addition, 602 new research and development projects have been supported by government funding and £110 million will be spent to support international collaboration in science and research.
By 2030 the Government wants the UK to be the most innovative country in the world and home to the most dynamic businesses at the cutting edge of new technologies and processes.
2. People – generating good jobs and greater earning power for all
The Government has put people at the heart of the Industrial Strategy to ensure that everyone can improve their skills throughout their lives, increasing their earning power and opportunities for better jobs. To support this, the Government is already leading the biggest transformation to technical education in a generation. As part of this, there has already been a 25% increase in A-level computer science entries since 2017 and over 47,000 people have started higher-level apprenticeships.
Longer-term goals include the introduction of the new T-levels (technical education equivalent to A-levels) from September 2020, backed by an additional £500 million per year once fully rolled out, along with the development of a National Retraining Scheme and a further £100 million investment announced in the 2018 Budget to ensure it is underway by the end of the current Parliament.
3. Infrastructure – delivering a major upgrade to the UK’s infrastructure
The country’s economic geography will be transformed through Industrial Strategy investment, from full-fibre broadband, 5G networks and smart technologies such as autonomous vehicles, to high-speed rail connecting people to jobs and opportunities.
The Government has already initiated the highest growth in infrastructure spending out of the world’s seven most industrialised countries, with further achievements including 650,000 new homes created through the Housing Infrastructure Fund and 200 trains fitted with the latest digital signalling technology.
4. Business environment – becoming the best place to start and grow a business
Over the past year, the Government has put in place all the building blocks to be able to deliver a £20 billion action plan in support of innovative high-growth potential businesses, with key achievements including 375,000 businesses supported by Growth Hubs in local areas across England and 78,000 SMEs supported by the British Business Bank.
By 2027, the Government propose to invest £20 billion into high-growth potential businesses and aim to increase total UK exports from 30% of GDP (as of June 2018) to 35%.
5. Places – developing prosperous communities throughout the UK
The Government is developing Local Industrial Strategies, which will set out priorities to drive growth locally.
Next steps as part of the Industrial Strategy include the rollout of Skills Advisory Panels across England to better coordinate skills provisions for over 16s. In addition, the Government will work to drive clusters of business across the country to innovate or adopt new technologies through the Strength in Places Fund.
By early 2020, the Government will agree Local Industrial Strategies for all places in England.
Industrial Strategy: the story so far…
- £45bn already committed across the UK through the Industrial Strategy
- 78,000 smaller UK businesses boosted by the British Business Bank
- 5% increase in private sector expenditure on research and development
- 76,000 new jobs created by foreign direct investment
- £7bn record increase in public spend on research and development
- #1 fastest growing infrastructure investment of the 7 largest advanced economies in the world