Forget Brexit, the government must get cracking on Britain’s industrial strategy

Given the breakneck speed at which news on UK politics has been moving in December, it’s understandable that the first anniversary of the launch of the government’s industrial strategy went largely unnoticed.

But in the face of uncertainty over Britain’s international future, it is all the more important that the government makes progress on delivering its aspirational and “modern” strategy for UK industry, a long-term plan to create growth and jobs in a post-Brexit economy based on investment in innovation.

The big announcement of 2018 centred on a new “sector deal” for aerospace, one of six such deals stuck with the UK’s sectors over the last year.

This is to be welcomed, but alongside recognising such well-established industries, it is vital to identify the emerging sectors which, with the right nurturing, will become our strengths in the future – the ones that are disparate and characterised by smaller businesses, with less capacity to lobby the government with their wish-list of support.

Here, we hope to see the government draw on the work that Nesta and others have been pioneering looking at new ways of “seeing” the economy, using new analytics techniques and online data, to map the size and scope of growing sectors.

In particularly, this includes the immersive economy – we estimate that there are 1,000 immersive specialist companies in the UK employing around 4,500 people.

We didn’t get much more information this year about the government’s plan to reach the stated target of 2.4 per cent investment in R&D by 2027 (currently the UK languishes at 1.7 per cent of GDP, in the bottom half of G7 countries).

This is an ambitious target, and Britain will not meet it by public investment alone: a key part of any plan must be how to incentivise businesses to invest more in R&D activity.

Equally, the type of R&D investment is as important as the quantity of it.

Here, the government’s newly created set of “grand challenges” and missions are designed to provide direction to the UK’s public and private investment in R&D.

They range from using artificial intelligence to transform the prevention, early diagnosis and treatment of chronic diseases by 2030, to putting the UK at the forefront of the design and manufacturing of zero-emission vehicles, with all new cars and vans to be zero-emission by 2040.

This is a promising approach to delivering greater value for society from R&D, but it will take an organised, cross-government effort to deliver successfully, and we’re yet to see a comprehensive plan.

And what of supporting growth across the country? Well, in 2019 we should hopefully see the first local industrial strategies emerge, where cities and regions set out their priorities for public investment in their areas. Fingers crossed.

What’s missing? Like all good plans, it needs a set of metrics to make it more concrete and to help evaluate its success. A year on, the government has published a series of sensible next steps, but we’re still lacking a timeline and a sense of how to measure progress towards the aspirational objectives of “building a Britain fit for the future”.

There’s no doubt that moving beyond the rhetoric of an industrial strategy in 2019 will require some tough decisions on high-level priorities for public spending, especially as the Brexit saga drags on.

But at its heart, this is about creating and shaping the UK’s economy for future generations, which we all have a stake in.

Whatever happens in 2019, the government should use this opportunity for a visible and inclusive debate that engages with a wider public audience on the purpose of public spending on research and innovation.