Government launches strategy to boost Industrial Productivity

On 27th November Greg Clark, Secretary of State for Business, Energy & Industrial Strategy, unveiled a flagship White Paper Industrial Strategy for the UK. With long term plans to boost the economy, build on the strengths of the country and embrace technological change.

This eagerly awaited strategy lays out a road map on how the Government are building a Britain “fit for the future” and how the Government will help to nurture businesses to align to their vision of:

  • The world’s most innovative economy
  • Good jobs and greater earning power for all
  • A major upgrade to the UK’s infrastructure
  • The best place to start and grow a business
  • Prosperous communities across the UK

The Industry Strategy sets out a plan to strengthen the “five foundations” of productivity: ideas, people, infrastructure, business environment and places. (see image below)

This white paper sets out a long-term plan to boost the productivity and earning power of people throughout the UK.

Source 1:

The Five Foundations of Productivity

The White Paper report describes in detail the following facts by 5 key areas:

# 1 Ideas.

The Government will aim to raise the total research and development investment to 2.4 per cent of GDP by 2027;

They will increase the research and development tax credit to 12 per cent and;

A whopping £725m will be invested in the new Industrial Strategy Challenge Fund programmes;

#2 People.

An Introduction of a technical education system that not only stands alongside our world-class higher education system but will be at the Global forefront;

Due to the shortage of science, technology, engineering and maths (STEM) skills, the Government is planning to boost this with an additional £406m in Maths, Digital and Technical education.

The strategy plan proposes the creation of a new National Retraining Scheme that supports people to learn new skills, in areas such as Digital and Construction, with an initial £64m investment.

#3 Infrastructure.

Another priority will see a rise of the National Productivity Investment Fund to £31bn, reinforcing investments in housing and digital infrastructure and transport;

With the expected rise of electric vehicles, it will see this infrastructure supported through a £400m charging investment and an extra £100m to extend the plug-in car Grant;

Boosting of our digital infrastructure with over £1bn of public investment, including £176m for 5G and £200m for local areas to encourage full- fibre networks;

#4 Business Environment.

Government and Industry Sector partnership deals will be launched with the vision to increase productivity. The first “deals” are in life sciences, construction, artificial intelligence and the automotive sector. Hobut is keen to see what benefits will ensue and will keep you all updated with any developments;

The White Paper shows the Government will invest in innovative and high potential businesses with over £20bn, including through establishing a new £2.5bn Investment Fund;

#5 Places.

Local Industrial Strategy agreements will be formed that build on strengths and local economic opportunities;

The strategy seeks the creation of a new Transforming Cities fund that will provide £1.7bn to improve transport links between booming cities and suburban areas.

A Teacher Development Premium will be created with a £42m funding.

The Four Grand Challenges

As well as developing a path for improved productivity, it sets out four areas in which Britain can lead the Global Technology Revolution: The Four Grand Challenges

#1 Artificial Intelligence and Big Data. The world is undergoing a technical revolution (see our recent Blog) and the Government is committing to putting the UK at the forefront of the AI and Data revolution. This Industrial Revolution will hit not only hit the UK but ALL industry sectors in ALL countries and will prove a big challenge to businesses, people and places and Greg Clark goes on to say that “we must respond”.

The Artificial Intelligence sector deal means that it will secure the UK as the go-to destination for AI innovation and investment. A great start considering it is estimated to add over £232bn to the UK economy by 2030 as well as creating thousands of jobs!

Take a look at the independent review by Professor Dame Wendy Hall and Jerome Pesenti on how the AI can be grown in the UK.

In summary, the government wants the UK:

  • to remain the global centre for AI and data driven innovation;
  • to encourage the deployment of AI and data technologies by businesses to boost productivity with focus on cybersecurity, life sciences, construction, manufacturing and energy;
  • to lead the world in a safe and ethical use of AI;
  • to help people to develop the skills for the future;

#2 Clean Growth. The Government wants to encourage the development and commercial deployment of low carbon and clean technologies.

The plan outlines the following priorities:

  • To develop smart systems for cheap and clean technologies across power, heating and transport;
  • To improve the efficiency of construction techniques for safer, healthier and affordable and more efficient homes;
  • To make energy intensive industries more competitive;
  • To develop high efficiency agriculture;
  • To promote the UK as a leader for green finance

#3 The Future of Mobility. The strategy outlines the plan to become world leaders in developing transport and logistics.
Priorities include:

  • To establish a framework to support the evolution of new technologies, including driverless cars on our roads by 2021;
  • To support the transition from current motor technologies to zero emission vehicles;
  • To prepare for future models of mobility, including road infrastructure;