UK industrial strategy

The UK government’s ‘Industrial Strategy’ for making the UK more competitive and the economy better-balanced essentially involves increasing R&D investment and workers’ skills

It considers five areas for productivity improvement – Ideas, People, Infrastructure, Places and Business environment – and recognises four grand challenges:

  • Artificial intelligence and machine learning
  • Clean growth
  • Future mobility
  • Ageing society

In particular, UK Prime Minister Theresa May has since confirmed her commitment to raise R&D spending to 2.4 % of our national income – an increase of £22 bn over the next 12 years when it increased by just £6.6bn over the last 12 – her aim is to help the UK become “the ideas factory of the future”

So is the strategy working?
The biggest challenges for smaller (SME) manufacturers are poor cash flow, high energy costs, reduced margins, competition from Asia, lack of skills and an ageing workforce i.e. most not listed in the grand strategy
So what help is on offer to these vitally important SMEs?
  • The HVMC – High Value Manufacturing Catapult:
    • The HVMC is a network of seven centres who work with industries, large and small, to prove and de-risk technologies that can be adopted in their own factories to improve productivity and quality
    • It’s funded through the BEIS – Business, Energy and Industrial Strategy Department – and Innovate UK – the national innovation agency
    • It’s tasked with engaging SMEs and measuring the impact of the Catapult on improving SME competitiveness
  • The ‘Made Smarter’ programme, led by Siemens CEO  Jürgen Maier:
    • The programme facilitates the adoption of digital manufacturing technologies such as robotics and automation, augmented and virtual reality, artificial intelligence and machine learning
    • The aim is to unlock big improvements in productivity
    • The approach is to link with existing growth hubs
    • However, some say that while it may eliminate duplication, its success will depend on getting people in post who understand industrial digitalisation and the challenges of change-averse business cultures
  • And, only recently, an independent council has been set up to oversee the delivery of the ‘Industrial Strategy’, headed by Andy Haldane, chief economist at the Bank of England:
    • Haldane is not a manufacturer but qualifies, apparently, because he’s ‘familiar with monitoring government performance on key economic indicators’
    • The council will scrutinise R&D spend, seek to keep the UK economy on track and assess whether the strategy’s aims are being delivered
So the UK might be said to have a productivity plan, albeit one which addresses a mere 15% of its total economy i.e. the manufacturing sector alone

Expert advisers are in place, universities are being encouraged to join in, professional monitors are watching key indicators, billions have been allocated

What could possibly go wrong?

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