Given the challenges the UK’s society and economy now faces, the industrial strategy is a rather small, faltering step, according to Professor Ewart Keep

The industrial strategy, launched on a day when the UK media was obsessing about the engagement of the man fifth in line to the throne, did not appear trailing clouds of glory. In the event, this was probably just as well.

Since the financial crisis of 2008, a vaguely defined “industrial strategy” has been back in fashion at a rhetorical if not a practical level and, following New Labour and the Coalition government’s efforts, the current Conservative administration has been putting its own particular, minimalistic stamp on this policy area.

In presentational terms, this new strategy is a retro affair: style substitutes for substance, recalling the glossy productions of Tony Blair’s days. Content-wise, much of it turns out to be very familiar indeed. In the recent past we had “eight great technologies”; now we have “four grand challenges” – AI and data, clean power, transport (mystifying labelled “mobility”), and the ageing society.

The sums of money to back up the good intentions are vanishingly small

A lot of space is devoted to R&D and innovation. We now aspire to become the world’s most innovative economy, but as long as we cling to the outdated “science and science only” model of innovation, our chances are exceedingly slender. Workplace or employee innovation in process and product remain entirely absent in official thinking, which puts us a long way behind many of our competitors, who many years ago realised that incremental improvements were at least as important as the next big breakthrough.

The skills and employment section is an odd mixture of analysis and policy. The strategy is at pains to endlessly repeat how enviable our flexible labour market is, but while we have been very successful at creating a lot of jobs, many of them are low-wage, low-productivity openings propped up by the tax credit system and a crackdown on benefits. How socially and economically sustainable much of this employment will be in the long run is a moot point. It is certainly hard to imagine many Scandinavian workers, or even employers, wanting to copy our model.

The skills measures are an utterly predictable blast from the past: more STEM, extra money for maths teaching, apprenticeship and T-levels, a small sum for some pilot work on FE staff development, another run at adult skills and retraining.

It is also deeply disappointing to see the hoary trope of average wage premiums to degrees still being trotted out, long after longitudinal educational outcomes data showed how utterly misleading this average figure is (25 per cent of all graduates earn less than £20,000 a decade after graduating).

As ever, what is missing is what matters

One warning sign is that, with the exception of the maths teaching policy, the sums of money available to back up these good intentions are often vanishingly small. Radical departures from the traditional policy menu are absent, and the implicit start and finish point is the supply side, with the happy assumption that demand for skill and its effective utilisation in the workplace can be left to market forces and luck.

As ever, what is missing is what matters. The earlier green paper on industrial strategy was mainly focused on 10 per cent of the manufacturing workforce, or one per cent of the overall UK workforce. The latest version of the industrial strategy is only a little broader. The only chink of light is the promise that a review of productivity and growth in SMEs will be undertaken.

The first four emerging sector deals confirmed in the Industrial Strategy cover AI, construction, automotive and the life sciences, but more are expected to follow. In some sectors at least, these may form the template for more joined-up thinking and action on job quality, inclusive growth, productivity, skills and new forms of innovation.   

Given the challenges the UK now faces, the industrial strategy represents a small and rather faltering step. At some point, rather more radical thinking may need to be entertained.

Professor Ewart Keep is director of SKOPE at Oxford University