The Department for Business, Energy and Industrial Strategy (BEIS) launched its Industrial Strategy Green Paper in January 2017. The Government sought industry responses to the paper.
The word ‘strategy’ is arguably more important than ‘industrial’.
Rather than the ‘picking winners’ strategy of the 1970s- a flawed attempt to target specific industries- the government is seeking to form a coherent policy infrastructure capable of accelerating economic growth. The period of ‘picking winners’ holds lessons beyond its perceived failure; the relationships between the state and the markets needs to be reframed as supportive and complementary rather than co-opting.
Why is it necessary to create a new industrial strategy?
The UK economy faces testing times- BEIS is seeking to construct a model capable of navigating the turbulent periods ahead- both within negotiations and the macro-economic conditions they will impose (foreign exchange fluctuations, inflation increases, and interest rate rises, among others). This is compounded by developments within industry – disruptive technologies are expected to adjust structural employment, for example.
With inflation rising faster than wages, in both the private and public sectors, consumer confidence is in decline. It is surprising, then, that the UK is experiencing near record employment. With employment at near record highs and inflation rising, clamours for wage increases are intensifying. However, low economic growth deems this impractical. Output is not increasing at a sufficient rate to qualify wage increases.
Waning productivity, some argue, is central to remedying these circumstances.