Industrial Strategy: government and industry in partnership West Midlands Councils 19 November 2012
Dec 25, 2015
Industrial Strategy:government and industry in partnership
West Midlands Councils 19 November 2012
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Why do we need to act?
The Heseltine review
Industrial strategy activity
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In the medium/long-term, structural changes in the international economy will impact the UK
• Globalisation and rise of BRICS are changing UK’s relative position in global economy.
• Developing countries are competing higher up the value chain, threatening the UK’s traditional comparative advantage.
• The UK’s previous growth model fuelled by debt was unsustainable.
• If the UK stands still there is a danger we will be left behind.
• A stable macro business environment is key to enabling growth.
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Government spending cannot drive growth – we need to look at other sources
• Contribution to GDP from Government activity grew from 0.3% between 1990-99 to 0.7% between 1999-2008, becoming the second most important driver of growth.
• The deficit means Government spending cannot contribute to growth to the same degree.
• Business investments and exports will have a critical role in driving growth in the coming years.
• We need to reflect this change and align Government intervention strategically and systematically, using all the levers Government has to support the environment for growth
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2011 2012 2013 2014
Per
cent
age
poin
ts
Private consumption Business investment Other private investment
Government Net trade
GDP Growth Forecasts
0.9% 0.7% 2.1% 2.7%
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Why do we need to act?
The Heseltine review
Industrial strategy activity
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…..we must lay out a strategic vision for where our future industrial capabilities lie, and how to deliver them
Key messages:
– A whole of government approach
– Cabinet, No10 and ChX fully supportive
– A spectrum of support for all sectors
– Partnership strategies with key sectors
– Cross-cutting themes:
• Access to Finance
• Technology
• Procurement
• Skills
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• A light touch approach where policies are working well, or where there is less scope for Government to make a difference.
• Strategic partnerships with specific sectors that have real impact.
Businesses in the sector know who to contact if there’s a problem
- Immediate response, eg, real estate
Government takes action to facilitate a response to a specific issue
- Short-term, eg opportunities for tourism in 2012, steel, and energy intensive industries
Sustained co-ordination, dialogue and action, eg sector councils
- Medium-term, eg respond to the chemical strategy, Creative Industries Council
A strategic industry / Government partnership
- Long-term, eg Aerospace Growth Partnership, Automobiles, Life Sciences
Government sets the business environment (eg tax, IPR, skills), but no sector specific policies
Government provides sector specific regulation, support and co-ordination
Government shapes, procures and oversees
A spectrum of support for all sectors
Light touch
Strategic partnership
Action Sustainedco-ordination
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Early 2013
Aerospace
Agri-tech
Nuclear
Renewables
Oil and Gas
Automotive
InformationEconomy
Education
Construction
ProfessionalBusiness Services
Spring 2013 Summer 2013
Strategic partnerships the sector strategies
Life Sci
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Sector strategy principles• Developed for business – not concentrated on Whitehall policy levers.
• Co-created with business –industry taking a core role in shaping development and long-term delivery. Cross-government consultation and buy-in.
• Shared long term vision – where we are now, where we want to be, and how we will get there. A full SWOT analysis as well as horizon scanning.
• Private Sector Leadership – spanning development and delivery, although existing priorities and commitments need to be recognised and incorporated.
• Action oriented – with explicit and specific pledges from government and business about what will be done to deliver the strategy.
• Delivery – each document should state how the strategy is to be delivered
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Access to finance• action through a range of schemes, Enterprise Finance
Guarantee, Business Finance Partnership etc.• business bank to increase diversity and support competition.
Cross cutting themes
Procurement• greater clarity for business. Pipelines of £70bn of future
contracts across 13 sectors published in April. • developing capability assessments with industry
Skills• giving employers more direct control of vocational skills spend • Employer Ownership Pilot generated £98m private investment
for Government’s £67m. Will support nearly 11,000 new apprenticeships and 27,000 vocational courses.
Technologies• long-term plans for innovation investment.
• support emerging disruptive technologies on an ongoing basis.
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Why do we need to act?
The Heseltine review
Industrial strategy activity
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The Heseltine review
• No Stone Unturned - published 31 October
Key messages
– Localism – building on our strengths– Whitehall – a confident, strategic centre
of Government– Government and growth – catalyst,
enabler, partner– Private sector – broadening the
capacity for excellence– Education and skills – the foundation
for growth and prosperity
– 89 recommendations– Government has welcomed the report,
and indicated that it plans an initial response around Autumn Statement