By balancing certainty and stability with the continual evolution and invention required to embrace the industries of the future, business stands ready to be a proactive partner to Government, but can only do so if the Government is willing to maintain networks that can facilitate this support.
The Challenge
Ahead of the release of the Government’s Industrial Strategy White Paper, there is an increasing level of interest from industry as to what will be announced. This is for good reason - first impressions count, and how the Strategy is received on day one will be critical for creating the confidence needed to make the Strategy work. After all, the 2017 Industrial Strategy and subsequent 2021 Plan for Growth are considered to have failed to deliver largely due to a lack of direction and buy in from necessary stakeholders, both inside and outside the Government.
However, no Industrial Strategy will ever operate in conditions entirely of the Government’s own choosing. Past British industrial strategies, such as the National Plan in 1965 and the Dash for Growth in 1972-3, both found themselves overtaken by world events that made them impracticable.
This record suggests the UK has so far been unable to create an industrial strategy that meets not just the moment for which it is published, but evolves to meet the needs of a changing world to retain necessary private sector confidence. This cannot mean change in response to every event, but instead requires the Government to understand what events require change and how that change can best maintain the goals of the Strategy. It is this challenge that the Government must address throughout the Strategy's lifespan.
An industrial strategy in uncertain times
The Government must accept that the Industrial Strategy will be forced to change due to circumstances outside of its control. This may be for external political reasons, such as the uncertain future of global trade, or because of advances in technology that expand what is possible for the Industrial Strategy to achieve. This reality has already been recognised by bodies such as the Business and Trade Select Committee, who have had to change their questions at oral evidence sessions to focus on the effects US tariffs will have on the British economy.
As time goes on, the potential for events to fundamentally change the context the Industrial Strategy is operating in only increases, compounding the need for the Industrial Strategy to evolve. This may involve abandoning previously successful schemes that have outlived their usefulness, or making emergency adjustments to proposed courses of action, or even altering the goals of the Strategy to better fit the new reality.
Given the Industrial Strategy will undoubtedly rely on crowding in private capital, it will need to maintain a fine balance between providing the necessary certainty and stability, to allow businesses to plan and make investments, and remaining adaptable and responsive enough to ensure continued relevance and confidence in the Industrial Strategy model. Without this relevance and confidence, it will cease to be a trusted indicator of Government intent and therefore a usable guide for the investment decisions of private enterprise.
How though can the Government build this flexibility into the Industrial Strategy?
The tech sector will be critical to managing inevitable change
In a time of global instability, techUK’s ability to help the Government manage change, especially by ensuring the Industrial Strategy remains as up-to-date and relevant as possible, ensures we can play our part in maintaining the stability of confidence in the Industrial Strategy necessary for encouraging private investment in the UK. To do this, techUK can offer the Government a partnership with the tech sector that will ensure the Industrial Strategy retains as much confidence and utility as possible over the course of its life.
techUK devoted a significant part of its Industrial Strategy response to examining how an Industrial Strategy could change while retaining the confidence of businesses necessary for its success. At the core of our suggestions was the need for trade associations and the private sector to be involved in policy formulation, testing and delivery alongside the Government, to ensure these policies are achievable and best align with both the Government’s goals and the goals of the private sector.
As a result of our broad membership, techUK can swiftly provide expert advice to the Government to aid in decision making. Our work on the collapse of Silicon Valley Bank, where we provided emergency advice as an incredibly fast-paced situation unfolded, is indicative of this ability to be an agile and knowledgeable partner for the Government during a crisis. By maintaining this relationship, the Government can ensure threats to the Industrial Strategy’s credibility are swiftly addressed in partnership with business.
Similarly, techUK’s pre-existing networks and view of the entire digital economy means we can help the Government identify and prepare for future technological developments by providing horizon scanning insights into future technological capability. Our information networks can help the Government anticipate necessary changes in policy before they reach a crisis point to ensure that the Industrial Strategy can best adapt to the changing nature of what is possible: technologically, politically and economically.
The real utility of these channels of communication is that we can provide not just information to the Government, but a partnership which ensures the Government can identify and manage any necessary changes to the Industrial Strategy while maintaining the full confidence of the tech sector. As the Strategy wishes to encourage investment and a productive partnership with the private sector, tapping into these animal spirits is just as important as creating a sound structure for the delivery of the Industrial Strategy. By helping the Government build and display this confidence, the Industrial Strategy and, by proxy, the UK will be a more attractive destination for investors, both domestic and international.
Conclusion
The Industrial Strategy cannot succeed if it remains static and unchanging in an increasingly volatile world, no matter how well-constructed it is on day one. To retain the necessary confidence of the private sector to facilitate investment in the UK, the Strategy will need to evolve to meet emerging challenges and to address sudden changes in the business environment.
Trade associations, particularly techUK, can help the Industrial Strategy retain its utility over the course of its life by ensuring that the Strategy evolves in a way that retains the greatest possible business confidence.
To fully realise the potential of this partnership, the Government must commit to building and utilising networks of consultation, with inbuilt operational capacity, with trade associations to ensure they can deliver advice and support to the Government whenever necessary.
You can click here to read our original Industrial Strategy response.