Business secretary Greg Clark, outlines his ambitions for the government’s industrial strategy
Planning for the long-term is nothing to be embarrassed about. In any other walk of life, it is essential.
I’ve never understood why it has been considered controversial for a government to do the same.
A government that fails to look ahead and make the right long-term decisions on tax, infrastructure, research, education and skills, is one that has abdicated responsibility.
There’s already enough uncertainty in business life without governments adding to it. And yet an electoral cycle of five years; a budget and autumn statement cycle of six months; and a media cycle of 24 hours means that too often public policy is set restlessly and is an extra source of risk for business has to take into account.
So an explicit commitment to a sustainable industrial strategy is to aim for stability and predictability.
We have had enough drama in British politics over the last year
And to achieve that requires taking not a deliberately partisan approach – always edging for difference and finding something to make others disagree with – but seeking where it is possible to establish common ground.
In my view we have had enough drama in British politics over the last year – I want us to recover our reputation for stability and predictability as a business environment.
Building upon proven strengths is a cornerstone of good strategy. This country has no shortage of them.
For a start, a powerful record on science and innovation; only America has more of the world’s top universities, Nobel prizes and registered patents.
We excel at the cutting edge of industry. For instance, our motor industry has the most efficient plants in the world. A quarter of the satellites launched into orbit today are made – not in Houston or Cape Canaveral – but in Stevenage.
We need to burnish these strengths.
We must provide the research funding to keep us out in front. We must ensure that land and supporting services are available not just to major employers but also to the increasingly integrated supply chain of smaller, specialist firms.
And we must set the technical and legal standards that create long-term confidence in Britain as a place to do business.
Of course, a modern industrial strategy is as much about potential as it is about existing strength.
We must never be the protector of incumbency – but instead be constantly looking to create conditions to be open to new competitors and indeed to new industries that may not exist anywhere today but which will shape our lives in the future.
In my view any successful industrial strategy has to be local. Governments are fond of quoting national figures – of economic growth, of productivity, of employment.
For too long, government policy has treated every place as if they were identical.
But the truth is economic growth does not exist in the abstract. It happens in particular places when a business is set up, or takes on more people, or expands its production. And the places in which you do business are a big part of determining how well you can do.
Yet for too long, government policy has treated every place as if they were identical. It seems to me that helping Cornwall make the best of its future is as vital to a comprehensive national success as helping Birmingham – but what is needed in each place is different, and our strategy must reflect that.
Many of the policies and decisions that form our industrial strategy will not be about particular industries or sectors, but will be cross-cutting.
For us to succeed in the future we need to have the right infrastructure – roads, rail, broadband and mobile – that can connect businesses to their workforce.
We must make sure that vocational education – especially in engineering and technology – plays a much more prominent role in our country
We need to have a rising generation of young people who are better educated than our competitors – and their predecessors – but also better trained.
In the debate about education we must make sure that vocational education – especially in engineering and technology – plays a much more prominent role in our country than it has for many years now; and that employers have a decisive role in making sure that skills training is meeting the needs they have to fulfil their order books.
We need a tax system that clearly and reliably encourages entrepreneurship and innovation. And a modern system of corporate governance that builds widespread confidence in business.
The challenge facing us is this.
For all the excellence and entrepreneurial brilliance that I have described. For all the assets and skills and reputation we have as a nation. For all of the astonishing economic progress we’ve made in this country.
It is visibly uneven. Britain can boast the richest area in northern Europe – central London. But we also have 9 of the 10 poorest.
We have some of the most productive businesses in the world but also – compared to competitors like Germany – a disproportionate number of low productivity businesses.
We have people who are the most capable and best trained on the planet. But too many leave school or college without the education and training needed to hold down a job productive enough to support themselves and their family and to pay for a long old age.
We have new infrastructure like Crossrail about to open, but we have roads that are bottlenecked, trains overcrowded and broadband and mobile coverage that is simply unacceptable in 2016.
We have low carbon energy systems that lead the world, but also the failure of successive governments to replace the power stations reaching the end of their lives.
And we have a worldwide reputation for fair dealing, but also examples of behaviour that tarnishes the good name of business.
This is no time to lower our sights or our standards. This country will never win a race to the bottom. Looking ahead, it is clear that the only viable path is in the opposite direction.
I believe that it is time for our country to have an upgrade.
An upgrade in our infrastructure so that we have smart and modern connections – physical and electronic. An upgrade in our education and training system so that we can benefit from the skilled workforce that we need in the future. An upgrade in the development and regeneration of those of our towns and cities that have fallen behind the rest of the country. And an upgrade in our standards of corporate governance and in the relationship that government has with businesses of all shapes and sizes.
Edited extracts of a speech given by Greg Clark, Secretary of State for Business, Energy and Industrial Strategy, to the Institute of Directors annual conference 2016