Process leaders on industrial strategy: good but not sufficient

Following the recent Budget announcements, business secretary Greg Clark [pictured] outlined the main details of the plan, which aims to boost the UK’s international competitiveness and productivity.

Key points include raising investment in research and development from the current level of 1.7% of GDP to 2.4%, a substantial £400 million-plus boost to STEM skills funding and the creation of an independent Industrial Strategy Council to monitor the success of the strategy.

The R&D commitment comes after the Chancellor’s recent announcement that tax credits for research and development would be increased to 12% – a decision met with approval but far below the 15% lobbied for in some quarters.

UK productivity is currently below the OECD average for leading developed economies including Germany, France, the USA and Italy. It is also 20% lower than during the period preceding the last financial crash.

Other commitments such the multimillion pound investment in artificial intelligence (AI) have been criticised as far too small to enable the country to improve its global position.

For a full outline of the industrial strategy see here.

EEF chief executive Terry Scuoler remarked that the white paper acts provided a foundation for a partnership where Government and business could ensure “consistency in policy thinking and implementation to ensure the UK is world leader” in new technologies.

Responses from industry leaders were broadly positive with criticism focused on the need to increase investment levels and more precise goals:

Dr Colin Brown, director of engineering, Institution of Mechanical Engineers (IMechE):

“While it is welcome that Government is providing £406 million to help address the shortage of science, technology, engineering and maths (STEM) skills, it is vital that this funding is made in the right places.

“Currently few schools are integrating engineering into their teaching and the wider school culture, which is leading to students developing a vague and incoherent understanding of the profession, its career opportunities and what it does for society.

“It has never been more important to think seriously about how we frame engineering in mainstream school education rather than simply relying on serendipity and volunteerism to inspire the next generation.”

Mike Hughes, zone president UK & Ireland at Schneider Electric:

“We can maximise the value extracted from resources through better energy management, but to tackle issues such as capacity, productivity and welfare, amongst others, the central acceptance and further integration of automation is crucial.

“Automation can provide the necessary education, upskilling and productivity the UK needs. The understanding of its necessity and harmonisation of cobotics needs to be recognised before the UK can claim it can do more for national infrastructure renewal through clean energy technologies.”

John Hicks, director and head of government & public, AECOM:

“Perhaps one of the biggest challenges that this strategy throws up is that of procuring for value. The opportunity to realise whole life value in procurement rather than just capital cost is huge, and if successful this could have a significant and welcomed impact on the industry and UK’s productivity.”

Lord Hutton, chairman, Nuclear Industry Association and co-chair, Nuclear Industry Council:

“The government’s industrial strategy recognises both that low carbon, secure and reliable nuclear power is a vital part of our energy mix and the wider economic contribution the nuclear industry can continue to make across the UK.

“Industry has made significant progress with government towards agreeing a sector deal which will maximise those opportunities and help improve productivity, foster innovation and reduce cost.”

Terry Scuoler, EEF chief executive:

“The introduction of a new industrial strategy is key to supporting efforts to improve productivity and invest in not just current industries, but those of the future which are set to radically change the ways in which people live and work.

“And by introducing independent scrutiny of the progress of these plans, the government is signalling that there will be a strong focus on measuring delivery which boardrooms will recognise and welcome.

Energy company SSE:

“We look for an approach that strikes a balance between maintaining controls on cost for consumers, investing in people and developing a smarter energy system while continuing the UK’s progress in decarbonising its electricity and heat supply.

“The White Paper’s focus on developing new infrastructure and ambitious sector deals for offshore wind, attracting green finance, charging points for electric vehicles and 5G connectivity across the UK suggests further opportunities.”