Summary

This paper argues for an industrial strategy for the UK that aims to achieve prosperity, social justice and ecological sustainability. Government must get national policy right – delivering certainty for investors in sustainable industries and ensuring that the ‘rules of the game’ deliver decent, well-paid jobs across the UK. But it would be wrong to conceive, as is often the case, of industrial strategy as starting and ending in Whitehall. In reality the diverse needs and different strengths of areas and regions in the UK compels a bottom-up and empowering approach. Industrial strategy must be, therefore:

  • place-based, with people in control of local developments;
  • built on the different strengths and assets that already exist in each locality;
  • making sure that marginalised areas and communities are not held back.

We briefly review the rationale for an industrial strategy and for the goals set out above.  We consider, again briefly, what kind of strategy is likely to achieve these goals.  We then set out proposals for shaping an effective industrial strategy which puts people and places first.

Overview of recommendations

1. Set overarching goals: Prosperity, equality and sustainability.

Success should be measured not just through conventional indicators such as gross value added (GVA), but also by assessing the impact on jobs, wellbeing and long-term sustainable development.

2. Begin industrial strategy from the needs and assets of local places.

Industrial strategy must be “place-based”, tailoring approaches to local needs and sectors of the economy that matter most to people and that deliver the most local value, rather than imposing specialisation choices from the top. Focus must be given to sustainable job creation in all regions, for workers with all levels of skill.

3. Strengthen local decision-making institutions.

Bodies that can have the remit and power to champion the diversity of local needs and interests are essential. There should be regional or local bodies capable of planning and coordination, but which are driven by the expressed priorities of local people and by participation from democratically elected local politicians, employers, trade unions and representatives from the third sector.

4. Tailor skills investment to the local needs of the whole economy.

Greater devolution to local government or other local institutions of investment and planning of education and training will help to make the most of local knowledge about an area’s particular requirements – not just in ‘high-tech’ sectors. Local skills strategies should be developed through the genuine and active participation not only of education institutions, employers, and local government, but of unions, workforces and young people as well.

5. Create new national and local banks specifically to finance place-based development.

A National Development Bank would be a tried and tested solution to regional development and should be prioritised. Local banks, thriving in other parts of Europe and the US, would be another approach.

6. Support SMEs to collaborate and win public contracts.

Institutions that help SMEs collaborate on shared services should be encouraged and subsidised by central government. Public procurement should favour regional SMEs when tendering for goods and services.