It was perhaps inevitable that Theresa May’s flagship policy, the Industrial Strategy, would flounder in the aftermath of Brexit, COVID, and the handover of authority to Boris Johnson.
But the swiftness with which it was scuttled surprised even those monitoring its activities from the bridge, like the members of the Industrial Strategy Council who were putting the finishing touches to their second and soon-to-be final Annual Report, even as the vessel was holed below the waterline.
The good news is that few industrialists went down with the ship. Despite its name, the Industrial Strategy Council was led not by a captain of industry but by a central banker and crewed by an assortment of professors, supermarket magnates and social media royalty. What is distressing, however, is that a strategy designed to “make the UK the world’s most innovative economy” should sink without trace just four years after it left harbour to the sound of popping corks.
Policy consistency has never been a strong point in UK politics: but for one Conservative government to ditch the flagship policy of its predecessor seems perverse. Ironically, the Industrial Strategy Council’s final broadcast to passengers identified longevity of policy – along with scale and policy coordination – as the essential ingredients of a successful strategy. It pointedly noted that: “Based on extensive cross-country and historical experience these are necessary conditions for any sustained improvement in productivity, pay and prosperity. Yet, too often in the past, UK growth plans have failed to satisfy one or more of these principles.” It looks like history is repeating itself and the government has failed not one, but all three of these principles.
But was the ship ever really seaworthy? It was certainly well laden. At 256-pages, it was built on five economic foundations, addressed itself to four Grand Challenges along with four sector deals, promised a review of 28 separate areas of government policy and, by the time it went under, was burdened with no less than 142 different initiatives and programmes.
Rather than a pin sharp vision, with clarity of purpose and a ruthless setting of priorities, this was a Rubik’s Cube of frustrating complexity with little chance of the pieces ever lining up. That’s before you add into mix the even weightier Made Smarter Review (more pages that the Industrial Strategy), with its unlucky 13 recommendations, three strategic goals, nine ‘technical enablers’, and the plethora of bodies of it would set up. This included the Made Smarter Commission itself, the Skills Strategy and Implementation Group, a number of interim Strategy and Support Implementation Groups, a network of Digital Research Centres and distributed Digital Innovation Hubs, a Standards Development Programme and a large scale Digital Transformational Demonstrator Programme. All this backed by a ‘major national brand campaign’ to promote adoption among SMEs.
This central plank of the Industrial Strategy declared at its launch in 2017 that the faster adoption of digital technologies could have a ‘positive impact on the UK’ in the region of £445 billion over the next decade; increase manufacturing growth between1.3% and 3% each year; lead to a conservative estimate of 175,000 net gain jobs; and reduce CO2 emissions by 4.5%. Overall, the Review declared “we are confident that industrial productivity can be improved by more than 25% by 2025: four years from now.
These are big, bold and ambitious claims. But the reality is that the few if any of them will be met. So far, according to the Made Smarter brand campaign, a two-year £20 million North West Pilot, led by a former Business Link director, has funded 155 projects and ‘engaged’ with 500 small and medium sized firms to give them ‘specialist advice.’ A good effort, but not one to float all the boats.
Anyone waiting in the water for the Chancellor, Rishi Sunak, to rescue their business by re-launching the Made Smarter campaign with much fanfare and even more money, is likely to be disappointed. Indeed, the language deployed from the Conservative Party podium in Manchester suggests this is a government that is indifferent, if not hostile, to industrialists on the lookout for handouts and bailouts. As the Prime Minister famously said: “f*ck business.”
While many applauded his conference vision of the UK as a high-wage, high-skilled Singapore out-performing mainland Europe, the more perceptive commentators detected a structural flaw in the PM’s logic: how to achieve this without stoking the flames of inflation, or worse, stagflation.
UK manufacturers are already navigating stormy seas as they try to remain competitive against a backdrop of wage rises, a scarcity of skills and price increases for raw materials. The only way to do this is to significantly ramp up productivity: but that means rescuing many of the digital technologies that are at risk of going down with the scuttling of the Industrial Strategy.
Here is where the opportunity lies. Instead of taking a top down approach to industrial digitalisation, a better solution might be found working from the ground up. Instead of starting with a technology or product, and then going on to the shopfloor in search of problems for it to solve, might it not be better to first identify the productivity problems and then develop the digital solutions to fix them?
Smaller, more agile and disruptive tech companies – who combine engineering and manufacturing know-how with a talent for designing smart apps – can do more for SME machine shops and precision engineers than the monolithic, slow moving vessels that recently crashed against the rocks of political fashion. Simple, cloud based tech that is affordable and easy to adopt are already unlocking step change improvements in shop floor productivity. Identify them and roll them out.
As one family-owned hand tool maker in Yorkshire said of the Industrial Strategy’s four grand challenges: “they are grand challenges, but just a little too grand for the likes of us.” So, let’s aim first for good outcomes, and get to grand a little later. We can do that by starting with where people are coming from and not where policy makers and professors would like them to be. We can do this by listening and learning: most of these firms are survivors, with the scars to prove it. That way, we learn together and, instead of launching a Titanic, we inspire a flotilla of SMEs whose mission is to rescue a besieged economy with productivity boosting innovations.