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Industrial Strategy | What's inside

Digital railway

A roadmap for boosting the UK’s productivity has been set out in the government’s Industrial Strategy, while the construction industry has agreed one of the first sector deals.

The strategy, published yesterday in the form of a White Paper, sets out how the government will increase the nation’s poor productivity by investing in skills, infrastructure and future technologies. It builds on ideas set out in a Green Paper in January.

Last week the Office for Budget Responsibility downgraded Britain’s growth forecasts for each year until 2022.

Four major challenges are identified which the UK must confront to stay ahead in the coming years, comprising artificial intelligence, clean growth, the future of mobility and an ageing population.

The Industrial Strategy includes a £725M investment boost to the Industrial Strategy Challenge Fund over three years, which the Department for Business, Energy, and Industrial Strategy (BEIS) hopes will help the UK become “the world’s most innovative nation by 2030”. It is in addition to the £1bn investment announced earlier this year.

Meanwhile the construction sector deal was announced after £170M of construction funding was revealed in last week’s budget. Sector deals, which combine government and private sector investment, have also been reached with the artificial intelligence, automotive and life sciences industries.

Through the Construction Leadership Council (CLC), the government and the construction industry have agreed a deal to improve productivity in the sector, which is worth £138bn to the economy each year. More details on the deal will be released shortly.

A watchdog called the Independent Industrial Strategy Council will be set up in 2018 to monitor the government’s progress on meeting goals set out in the strategy.

“The way we earn and live our lives as workers, citizens and consumers is being transformed by new technologies. The UK is well-placed to benefit from this new industrial revolution and we start from a position of significant strength,” said energy secretary Greg Clark.

“The Industrial Strategy is an unashamedly ambitious vision for the future of our country, laying out how we tackle our productivity challenge, earn our way in the future, and improve living standards across the country.”

In last week’s budget it was announced that research and development (R&D) will rise from 1.7% to 2.4% of GDP by 2027, while the rate of R&D tax credit is being pushed up to 12% in a bid to encourage research in cutting-edge technologies.

A £400M electric vehicle charging infrastructure fund and a National Productivity Investment Fund boost from £23bn to £31bn up to 2022/23 were also included in the budget.

Embracing the opportunities associated with technological change is a major part of the strategy. A Future of Urban Mobility strategy paper will be published in the next 12 months, while a government strategy is forthcoming on transitioning to zero emission roads.

Elsewhere in transport, a new “transforming cities” fund will offer £1.7bn for intercity transport, while a rebalancing toolkit will be used to help spread transport projects to less productive parts of the country. To help support innovation and modern construction practices, the Transforming Infrastructure Performance programme and Transport Infrastructure Efficiency Strategy were announced.

Digital infrastructure will receive a £1bn boost with £176M for 5G rollout and a forthcoming digital charter on ethical and effective use of data.

On clean growth, although the government will still use oil and gas reserves a shale environmental regulator is being considered. A vision to push businesses to increase their enegry efficiency by 20% by 2030 will be consulted on in 2018, and an £18M programme to reuse heat from industrial processes is being consulted on now.

Despite positioning the UK as a world leader on low carbon technology, there was no mention of the Swansea Bay Tidal Lagoon project. In January the Hendry review urged the government to back the tidal energy scheme.

Four Grand Challenges

  1. Putting the UK at the forefront of artificial intelligence development.
  2. Making the UK a leader in clean growth
  3. Meeting challenges associated with future mobility such as electric and autonomous vehicles
  4. Issues around the UK’s ageing population.

Five foundations for the Industrial Strategy

  1. Ideas to create the world’s most innovative economy
  2. People: creating good jobs and better earning power for UK residents
  3. Infrastructure: carrying out a major upgrade to the UK’s infrastructure
  4. Business Environment: making the UK the best place to start and grow a business
  5. Places: ensuring there are prosperous communities across the UK.




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