Plans to make Britain the world’s most innovative nation by 2030 have been outlined today in the government’s Industrial Strategy white paper.
The whitepaper’s Five Foundations address ways in which productivity will be improved, whilst Four Grand challenges identify global trends and the opportunities they represent.
The white paper’s Five foundations for improved productivity are concentrated on ideas, people, infrastructure, business environment and places. Much of the detail – including investing in digital, maths and technical education, supporting electric vehicles and boosting digital infrastructure – was announced in the Budget on November 23, 2017. Also included in the chancellor’s Budget were the support structures for each foundation, including increasing the rate of R&D tax credit to 12 per cent.
The white paper also confirms that government will go ahead with a series of Sector Deals, with construction, life sciences, automotive and AI the first to benefit from these long-term partnerships with government, backed by private sector co-investment.
Ahead of the signing of the Life Sciences Sector Deal, the government today confirmed that life sciences company MSD is set to make a major investment into the UK economy with the opening of a new UK life sciences discovery research facility in London. The new UK Discovery Centre is expected to create 150 new research roles and accommodate approximately 800 additional staff.
“Our life sciences sector is one of the UK’s fastest developing industries, with a turnover in excess of £64bn, employing 233,000 across the UK,” said business secretary Greg Clark. “MSD’s commitment today, and the wider Sector Deal investment we have secured, proves the process outlined in the Industrial Strategy can give companies the confidence and direction they need to invest in the UK.”
According to the government, the Four Grand Challenges – centred on artificial intelligence, clean growth, ageing society and future mobility – represent an open invitation to business, academia and civil society to work with the government in developing new technologies that help the UK exploit these global opportunities.
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.
Stephen Martin, director general of the Institute of Directors, said: “It is particularly welcome to see how the government has acknowledged the calls from industry to take a more broad-based approach to addressing questions around skills, infrastructure and research to support our future economy. We hope this will continue as these plans are taken forward.”
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 make recommendations to government on how it measures success.
Five foundations
The white paper’s Five foundations for improved productivity are concentrated on ideas, people, infrastructure, business environment and places.
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:
- raising the total of R&D investment to 2.4 per cent of GDP by 2027
- increasing the rate of R&D tax credit to 12 per cent and raising R&D investment
- invest £725m in new Industrial Strategy Challenge Fund programmes to capture the value of innovation
People
- establish a technical education system that rivals the best in the world to stand alongside our world-class higher education system
- invest an additional £406m in maths, digital and technical education, helping to address the shortage of science, technology, engineering and maths (STEM) skills
- create a new National Retraining Scheme that supports people to re-skill, beginning with a £64m investment for digital and construction training
Infrastructure
- increase the National Productivity Investment Fund to £31bn, supporting investments in transport, housing and digital infrastructure
- support electric vehicles through £400m charging infrastructure investment and an extra £100m to extend the plug-in car grant
- boost our digital infrastructure with over £1bn of public investment, including £176m for 5G and £200m for local areas to encourage roll out of full-fibre networks
- launch and roll-out Sector Deals – partnerships between government and industry aiming to increase sector productivity; the first Sector Deals are in life sciences, construction, artificial intelligence and the automotive sector
- drive over £20bn of investment in innovative and high potential businesses, including through establishing a new £2.5bn Investment Fund, incubated in the British Business Bank
- launch a review of the actions that could be most effective in improving productivity and growth of small and medium-sized businesses, including how to address what has been called the ‘long tail’ of lower productivity firms
Places
- agree local industrial strategies that build on local strengths and deliver on economic opportunities
- create a new transforming cities fund that will provide £1.7bn for intra-city transport; this will fund projects that drive productivity by improving connections within city regions
- provide £42m to pilot a Teacher Development Premium; this will test the impact of a £1,000 budget for high-quality professional development for teachers working in areas that have fallen behind
Four Grand Challenges:
- artificial intelligence – to put the UK at the forefront of the artificial intelligence and data revolution
- clean growth – to maximise the advantages for UK industry from the global shift to clean growth
- ageing society – to harness the power of innovation to help meet the needs of an ageing society
- future of mobility – to become a world leader in the way people, goods and services move
Source: Department of Business, Energy & Industrial Strategy
Reaction round-up
“Today’s publication of the government’s Industrial Strategy white paper represents an important step towards positioning the UK as an outward-looking leading trading nation, and a top destination for inward investment and international talent. Engineering is a vital part of this country’s economy, contributing over 20 per cent of gross value added and accounting for half our exports so engineering will be absolutely critical to delivering the outcomes sought by the industrial strategy. Now is the time to ramp up investment, particularly in digital skills, to ready the workforce for the next technological age, and the engineering community stands ready to support this process.”
Prof Dame Ann Dowling OM DBE FREng FRS, president of the Royal Academy of Engineering
“Government has clearly listened to industry in developing this strategy. Focusing on outcomes, and articulating the plan around the UK’s core strengths, its people, businesses and ideas to address the structural issues the country faces, especially in terms of infrastructure and skills is the right approach.”
Paul Tremble, executive director, Strategic Growth at WSP
“If the government wants the UK to be a global centre for R&D, it should stop tinkering and make more meaningful adjustments.
“The industry was looking for a rise of 4 per cent in R&D tax relief to 15 per cent. Instead, it’s stuck with a raise of 1 per cent. This might look good on paper as it’s actually a 9 per cent rise in the rate of relief overall, but this isn’t change on a scale that will supercharge the potential in our economy as many would wish.
Mark Tighe, CEO of the R&D tax specialist, Catax
“News of MSD’s and Qiagen’s planned investments in the UK is further endorsement of the fiscal and legislative measures, which are already helping to position Britain as a place to come and innovate. It is particularly positive as Brexit nears that corporates are taking up the opportunity to make strategic investments here.”
Adrian Tombling, patent attorney and head of the Life Sciences Group at Withers & Rogers
“This £50m boost from the Industrial Strategy will help the UK Space Agency continue working with the industry to develop new technologies, infrastructure and services, to establish the UK as a world leading destination for space launch.”
Graham Turnock, UK Space Agency chief executive.
I believe we’ll also have to adopt an employer/student-led enhanced learning strategy to keep up to date with the latest innovations as they appear. I’m developing this strategy for my own students but I’m happy to share – If you’re interested in this please contact me on Linkedin.
I recall the much reviled George Brown develop some sort of national plan in the 1960s. Little seemed to flow from all of the rhetoric. I suspect the same will apply here. Governments love to churn out strategies but are not, based on previous attempts, well placed to identify and support growth sectors. The mountain will rumble and as ever give forth a mouse.
The hi-tech sectors identified in the announcement today are already well subscribed. it is the more mundane areas such as retailing, logistics, some aspects of transport and the massive burden of incompetent government and large corporate organizations that need to be under forensic scrutiny.
Probably ‘pie in the sky’; haven’t we heard all this before? Remember Blue Streak missile and TSR2 fighter aircraft which we gave up on. We seem to be fairly good at inventing things, such as the Sinclair calculators, C5 cars, TV’s, radios, cars, trains, trams, I could go on for ever but making them at a profit is not our strong point. If the UK could make a go of it, a foreign company would make a bid for it as they could see a profit and the UK would sell out.
If we had proper manufacturing still available, perhaps we could still make ‘stuff’ profitably: but the shear greed of retail has put paid to so much (and a deliberate policy from the Right to discourage places where those terrible leftist-pinkos get their support) . I invite all Engineers and manufacturing /production specialists -and even trade journalists- when next shopping or whatever see the ‘parallel world of retail suppliers’ -from overseas which has reached almost epidemic and total proportions?
I am proud to work in automation at all levels, from the simplest automation in the NHS to some of the finest you can see anywhere on the planet. All here in the UK but it is in the main not UK manufactured we are , like so many of the players in this sector owned by European and Chinese groups. The real manufacturing is done elsewhere not within these shores.
Because of the many industrial sectors that our company does work in we see this repeated time and again, from software to friction welding, from simple Pneumatic Tube Systems to six axis robots and beyond and all the different systems that our customers employ that we did not supply, in the main they too are non UK companies.
We have since Harold Wilson’s economy that was to be forged in the ‘White heat of technological revolution’ to the current strategy for industry and all the political ‘noise’ in between, now we need actions not words, cash not hot air to boost short term popularity ratings.
Almost nothing that we are doing here is unique, it is happening all over the globe, I know because we are working all over the globe with those customers.
Give industry real clout, real backing or risk the consequences. Political leaders should be forming the backbone on which the bedrock of industry can rely but we suffer the political see-saw budget to budget.
Is it possible to have an industrial strategy at the same time as having Brexit?
That’s a bit like announcing your decision to play for Chelsea on the same day as you decide to feed your legs into a woodchipper.
This is a very welcome and much delayed attempt to support ‘disruptive’ technologies and innovation in general. However, is government really talking to the SME’s who need this funding urgently. I think not it has chosen as usual in its Business Council to talk to the usual members of various committees rather than stretching out to the smaller SME’s who need these new funding streams urgently and who are being held up in their development because of this. Those products who have received funding from the LEP’s where due diligence has already taken place and who cannot scale-up to change the industry they are in, due to lack of capital. If it is really to reach them it needs to be more direct rather than filtered down via various organisations and committees. The extra funding from the British Business Bank is very welcome but I have been told that you need to have sales behind you to obtain their scale-up funding which defeats the whole object of supporting SME’s in that very difficult stage of funding in a pre-launch situation. Innovation often means that you have customers waiting for your products but are unable to get the products to market due to lack of this pre-launch funding. Are we finally going to support the real disruptors and take some risk?
Are we finally going to support the real disruptors and take some risk?
Not as long as the ‘water’ in which SMEs swim is still of the incorrect temperature. [Mao!]
I have posted so often in this area, I am almost bored myself! Patent agents, banks and financial services? and the greed of the retail trade are the greatest barriers to the development of new products and projects. One cannot fault the wish of HMG of all persuasions to seek enhancement in our Industrial base. But the history of such surely shows that as long as the ‘water’ is wrong, tainted….no amount of fiddling at the margins will add one penny piece to the National cake! Is that an analogy, mixed-metaphor, or even a simile? I am but a simple Engineer: Stewart, bless usually puts me right (should that be left?)