News | Monday, 5th November 2018
How to create a more effective industrial strategy to transform the UK economy
Economic experts argue that a more radical industrial strategy can create an economy that works for everyone
In November 2017, the UK government published its industrial strategy white paper, setting out a long-term plan to boost the productivity and earning power of people throughout the country.
With Britain’s exit from the European Union now less than six months away, a new book published by Manchester Metropolitan University - with the support of the British Academy - argues that there is an urgent need for a more radical and expansive industrial strategy agenda with the aim of transforming all aspects of the UK economy.
In the book, “What We Really Mean When We Talk About Industrial Strategy”, Dr Craig Berry from Manchester Metropolitan’s Future Economies Research Centre, brings together a range of expert authors to set out the most effective ways of creating a new and effective industrial strategy.
1. Larger firms must take the greatest responsibility for the productivity slowdown
Identified as the source of the UK’s ‘productivity puzzle’, it is suggested that larger firms - rather than small firms which are seen to be inefficient – have the greatest responsibility for the productivity slowdown. In a connection to corporate governance practices, experts argue that these firms must take a lead in revitalising the UK’s productivity.
2. More must be done to prepare the UK workforce for new forms of employment
Addressing the difficult balance between nurturing the current trend of technological innovation and sustaining employment, it is suggested that holding back the tide of automation is probably futile and would do further damage the UK economy. Instead, much more must be done to prepare the UK workforce for new forms of employment in the digital age.
3. A greater focus must be given to the importance of low-value or foundational industries
Many of the experts that have contributed to the new book suggest that the majority of the UK’s economic problems are located in industries traditionally viewed as “less glamorous”, such as retail, hospitality and those dependent on public expenditure.
4. A decentralisation of economic powers and resources is necessary in supporting local economic development
When looking at the prospects of local industrial strategy, experts argue that the British state can be seen as structurally biased against supporting local economic development. Therefore, while the move to city-led industrial policy may be a step in the right direction, a decentralisation of economic powers and resources is necessary.
5. Industrial strategy should focus far more on female-dominated industries
When examining the gendered nature of the UK’s economic problems, industrial strategy should focus far more on female-dominated industries. Dr Craig Berry argues that a chronic gender pay gap indicates the UK’s failure to capitalise on the economy’s inherent strengths.
Speaking about the book and the findings of his research, Dr Berry said: “Two and a half years on from the Brexit vote and a year on from the industrial strategy white paper, we are still waiting for the economy that works for everyone promised by the Prime Minister.
“A radical and comprehensive industrial strategy encompassing new powers for local government, along with a long-term commitment to strategically significant industries, attention to the foundational activities that make growth possible and a new approach to corporate governance, is very much part of the solution to this dilemma. But we are not there yet.”
The book is the first publication from Manchester Metropolitan’s Future Economies Research Centre, which is home to world-leading scholarly research directly shaping and leading policy and business change regionally, nationally and globally.
Dr Berry added: “Addressing some of the most important and pressing policy debates is a central aim of our work at Manchester Metropolitan. While the authors of this new book cannot be assumed to agree with every aspect of the industrial strategy agenda, they all agree that the timidity in the government’s approach across various areas of policy is holding back the UK economy.”