The UK government has launched its long-awaited industrial strategy, with businesses welcoming support through trade investment, skills training and lower energy prices.
Published on Monday (23 June), the 10-year plan is intended to increase business investment and drive growth in the UK economy.
At its launch, Jonathan Reynolds, business and trade secretary, said the strategy would “ensure the UK is the best country to invest and do business”.
The strategy comes shortly after the recent spending review, where Rachel Reeves committed £39bn for affordable homes and £15bn for transport improvements across the North and Midlands, as well as an £86bn boost for science and tech R&D, £14.2bn to build Sizewell C, and £2.5bn for small modular reactors.
The 160-page strategy white paper sets out how the government plans to invest in eight key sectors (IS-8) that it judges to have the highest potential for economic growth.
The IS-8 comprise advanced manufacturing; the creative industries; life sciences; clean energy; defence; digital and technology businesses (including artificial intelligence and quantum computing); financial services such as banking and insurance; and professional services such as accounting and the legal profession.
These sectors represent about 32% of UK GDP. Each IS-8 has its own bespoke ‘sector plan’, setting out a vision of the sector’s transformation by 2035.
These eight sectors will receive the bulk of government industrial support, whether that be through cheaper energy prices, trade support or skills training.
In a vote of confidence, since the strategy’s launch, Amazon has confirmed it will invest £40bn over the next three years in the UK, including building four new fulfilment centres, creating over 4,000 jobs across the sites.
Many heads of industry have welcomed what is deemed government making good on its commitment to set out a long-term vision for industry.
Make UK, the leading manufacturers’ organisation, said that the launch demonstrated that government had listened to industry and was committed to tackling major structural problems that have held back growth.
Stephen Phipson, CEO of Make UK, said: “Make UK has led the campaign for a new industrial strategy for many years, highlighting the three major challenges that were diminishing our competitiveness, hampering growth and frustrating productivity gains: a skills crisis, crippling energy costs and an inability to access capital for new British innovators.
“The strategy sets out comprehensive and well-funded plans to address all three of these structural failings. Clearly there is much to do as we move towards implementation but, this will send a message across the country and around the world that Britain is back in business.”
Sam Gould, director of policy and external affairs at the Institution of Civil Engineers, agrees that “the government has listened to industry needs and carefully considered how various strategies should link together, and how the country must plan for future needs.
“Clear strategic direction and more certainty for investors will help create the right environment for successful delivery.”
Sir John Lazar, president of the Royal Academy of Engineering, also welcomed an industrial strategy that was “a big step in the right direction”.
He added that “the devil will be in the detail of delivery” to confirm if the ambition set out in the strategy “tangibly changes the fortunes of the engineering businesses that drive employment and growth across the country”.
Yselkla Farmer, chief executive of BEAMA, a trade association representing manufacturers of electrical products, sees the strategy as a pathway to the UK “seizing a once-in-a-generation global opportunity to become the low carbon technology workshop of the world”.
Farmer deemed the decision to reduce electricity costs for the IS-8 sectors as an “incredibly welcome step” but says that now attention needs to be turned to the “bespoke package of regulatory, financial and policy measures needed to forge the most attractive investment climate possible”.
Mark Gray, UK & Ireland country manager at Universal Robots, hoped this would “finally be the strategy that delivers” and put manufacturing “firmly back on the national agenda”.
Beatrice Barleon, head of policy and public affairs at EngineeringUK, welcomed what she called an “ambitious” plan and hoped it would boost “employers’ confidence in investing in skills”.
As many in industry point out, if manufacturing is to thrive there needs to be a future-ready workforce. As such, the £1.5bn package in skills and workforce development that has been placed at the heart of the strategy has been welcomed.
Ann Watson, CEO of Enginuity, the former Sector Skills Council, said: “Government has clearly listened to businesses: alongside energy costs, skills gaps are recognised as a key barrier that must be removed to unlock growth.
“The cash injection to support engineering skills is welcome, as is the new sectoral upskilling and reskilling programme, which intends to facilitate the development of tailored training courses specifically to meet SME training needs.”
Paul Tremble, chief strategy officer at WSP UK & Ireland and Africa, said that the skills package, together with cutting green levies to ease energy costs, sends the message that this is a strategy that “backs business, empowers workers, and builds a high-value, future-ready economy where good jobs and sustainable growth are shared across the UK”.
However, there were others who thought that the government could have gone further on skills.
Oana Jinga, CCO and co-founder of UK robotics and logistics firm Dexory, said: “As next steps, I’d like to see the government set out a clear, long-term plan for developing advanced manufacturing skills nationwide, launch targeted initiatives to inspire young people into high-tech industry careers, and make it easier for businesses to recruit the specialist talent they need to grow.”
David Grailey, managing director, MTC Training, at the Manufacturing Technology Centre, warns that skills training must focus on meeting emerging needs required for rapidly evolving industries such as offshore renewables.
Grailey said: “For example, we predict that 70,000 skilled workers will be needed over the next three years to manufacture and install wind turbines to help meet the government’s net zero targets.
“Without forward planning, we risk building potential without the people to power it. Get it right, and the UK won’t just keep up – it’ll lead the global race for innovation, growth and industrial transformation.”
