The UK has accepted it needs a proper industrial strategy to compete on the world stage, but it must match words with action – and crucially a plan – if it wants to succeed, writes Sharon Todd
Finally, UK politicians seem to have accepted that the country needs an industrial strategy if we are to accelerate growth, modernise the economy and become a science and technology superpower. Labour, for example, released an industrial strategy paper in September, while Jeremy Hunt has been keener to at least reference the concept than many of his recent predecessors as chancellor.
However, what has been lacking is the necessary detail about how an industrial strategy might work. This is why the business and trade select committee’s current inquiry into industrial policy is so important: it is an opportunity for business to fill in the significant blanks.
SCI (formerly the Society of Chemical Industry), which works to accelerate the commercialisation of the UK’s best ideas, has been calling for a detailed industrial science and innovation strategy for the past year. This is – to use the political vernacular – an ‘oven ready’ plan, which would make sure the UK seizes the opportunity to create 240,000 high quality jobs by the end of the decade. The three most prominent business secretaries of this century – Lord Mandelson, Sir Vince Cable and Greg Clark – have described SCI’s strategy as a “blueprint” for increasing productivity and investment.
One recommendation is the creation of an Innovation & Science Growth Council. At present, there are more than 70 scientific advisory bodies, whose voices crowd each other out and lead to confused, inconsistent policymaking. Even more concerning is the lack of business leaders on these committees.
The lack of commercial nous is why we fail to develop policies that encourage investment in the production of sophisticated products. A counterproductive tax regime and a commitment to green energy, for example, are the reasons why Astrazeneca chose the Republic of Ireland over the UK for a $360m advanced manufacturing facility. The UK has world-class research expertise but lacks the business environment to become a leading life sciences manufacturing centre.
The proposed council would comprise of chief executives from large science-based businesses and startups, enjoying a direct reporting line into the Prime Minister. This would make sure that science industrialisation is always at the heart of government thinking.
To succeed, an industrial strategy also needs targets. The council would be guided by key performance indicators to be hit by the end of the decade. We propose the following tough, but achievable, goals: 15 startup companies to scale to a value of £500m; five UK ‘unicorns’ to list on the London Stock Exchange; 10 investments of £500m or more in manufacturing. Of note is that in the five years from 2017-2021 there have been eight homegrown life sciences unicorns in the UK – that is an incredible number and shows the strength and potential of our science base. But only one has listed here – with the remaining seven listing in America.
We need to be bold and ambitious, or we will fall even further behind international rivals who have implemented industrial strategies or variations thereof. The US Inflation Reduction Act is the most obvious example, containing $500bn of tax breaks and spending for green technology and healthcare.
As SCI’s president, Paul Drechsler, is fond of saying, “the train has left the station, but there’s the smallest of chances we can still jump on the last carriage”. We are trailing behind our international rivals, as the International Monetary Fund’s recent cut to the UK’s 2025 growth forecast shows. The recent political interest in identifying a strategy for growth is that last opportunity to catch the train.
We all know that political interest can ebb and flow, and that MPs are under pressure from different places, but what is now needed is a comprehensive and consistent strategy for growth. It is, therefore, up to all of us as business leaders to impress upon the MPs on that select committee the importance of – and an immediate need for – a detailed, actionable and consistent science-based industrial strategy.