Making Sense of the Government’s New Industrial Strategy
This week saw the release of the UK Government’s updated Industrial Strategy. The highly anticipated document sets the tone for how policy will support industry over the coming decade. Building on Invest 2035, a Green Paper published last October, the strategy marks a clear intent to help to grow UK industry, ultimately aiming to ‘make the UK the best country to invest in anywhere in the world’.
We have taken a look through the strategy and highlighted the key points worth paying attention to.
The IS-8
The strategy has pinpointed eight key sectors, referred to as the IS-8, that hold the greatest potential for driving economic growth. These sectors are: advanced manufacturing, the creative industries, life sciences, clean energy, defence, digital and technology (encompassing artificial intelligence and quantum computing), financial services, and professional services like accounting and research.
These areas will receive the bulk of government support, with the goal of creating potential opportunities for UK OEMs, suppliers, systems integrators, and services providers. Sectors such as retail, food and drink, and agriculture have been left out of the Industrial Strategy but will see some of their supply chain included under the umbrella of advanced manufacturing and digital and technology.
Skills and Regional Strengths
Skills shortages are directly addressed, with a commitment to expand technical training and better match industrial need with local capability. The Government has committed to investing more than £100 million over three years to support engineering skills in England. This aims to increase the pipeline of skills through further and higher education and apprenticeships.
There’s also a strong focus on knowledge and resource sharing through clusters, Catapults, and partnerships.
If your business’s function is anchored in regional manufacturing or you are looking to upskill your workforce, then this could be the time to engage with local development bodies and funding initiatives such as The MTC and The West Midlands RAS Cluster.
Cutting down costs
For a number of years now, the UK has suffered from energy bills that are amongst the highest in the world and in a move that could benefit more than 7,000 businesses, the government has promised to cut electricity costs by up to 25% from 2027 for members of electricity-intensive manufacturing supply chains.
Amid recent economic strain and a quickly changing global business landscape, energy cost reforms was one of the most asked for part of the strategy and it is likely that many businesses will continue to push for more.
Robotics and automation
Whilst not defined as a standalone sector like the IS-8, robotics is recognised as one of the key technology drivers that will increase productivity, scale up, and build resilience of UK businesses. Alongside this, clear intent to support SMEs is outlined through the extension of the Made Smarter programme.
For real action to be taken, more clarity and planning will be needed to practically deliver this support. We recently spoke to thought leaders on how this could look: watch here
Our key takeaways
This strategy doesn’t promise overnight change, but after 4 years of having no official strategy in place it is a welcome recognition of the importance of UK industry.
Businesses operating across manufacturing, life sciences, defence technology, energy and advanced technologies can expect localised investment, guidance for the adoption of new technology and a potential narrowing of the skills gap.
Upcoming specific sector plans and the defence strategy that is yet to be published will likely help to fill in the gaps as to how we can achieve the ambitious goal of making the UK a leading industrial economic force.
