Strategy that endures: delivering a modern UK industrial strategy for the long term
Sir Alex Chisholm, UK Chair
| EDF
If strategising was the key to industrial success, the UK would be the number one industrial nation in the world.
The latest modern industrial strategy follows a string of similar documents over the past 15 years from across the political spectrum – Peter Mandelson, Vince Cable, Greg Clark, all had a go. I was involved with the industrial strategy of 2017 as Permanent Secretary of then Department for Business, Energy and Industrial Strategy.
So what’s come of them? Following a successful launch have they simply run out of energy or faced distractions from ‘events’? Have they not had enough money behind them? And what gives us reason to think things will be different this time?
Learning from the past, there are four ingredients when it comes to deploying a successful industrial strategy:
- You need a strategy that is well-evidenced and based on robust analysis.
- You need a whole of government effort.
- You need solutions to identified problems.
- Finally, you need a strategy that is built to last – not only in respect of anticipating future developments but also ensuring institutional durability.
So how does the Government’s newly unveiled Modern Industrial Strategy measure up against these success factors?
Sound judgment starts with sound evidence
On the first criterion, it seems to me and in my discussions with business leaders that the new Industrial Strategy performs very well. The Strategy is searching, well-evidenced and clear – particularly about the challenges of attracting private capital, the need for investment in skills, excess energy costs and issues on planning.
The Government carried out a robust consultation, helping to build a credible evidence base and to anticipate challenges and opportunities ahead of time.
United effort and prioritisation
It’s been positive to see real backing for DBT’s Industrial Strategy ‘show and tell’. The fact that it came just after the Spending Review, with strong financial commitments – not only in terms of capital spending, but also in respect of operating costs for departments and public bodies – is a fillip to the Strategy.
When you hear the Chancellor and Business Secretary talking about the Strategy, they do as one, with a clear focus on the importance of industrial regeneration, jobs and growth. Similarly, for anyone who attended the IEA’s Summit on the Future of Energy Security in April and heard the Prime Minister speak, you couldn’t miss the passion he feels for the role of high-quality industrial jobs as part of the clean power mission.
Other departments have also got behind the Strategy. For example, the planning reforms brought forward by the MHCLG are ambitious, and they’ve moved through the gears quickly.
All of this is early days of course but represents a promising start.
Strategy that solves, not just states
Another crucial ingredient for success is ensuring you have real solutions to the identified challenges. The Clean Energy Industries Sector Plan, published alongside, is a strong example here, paying proper attention to what it takes to develop strong supply chains and how that relates to skills as well as foreign direct investment.
The Industrial Strategy, coupled with the Clean Energy Industries Sector Plan, provides clarity on the UK’s direction of travel for clean energy investment. The focus on long-term investment, energy security and clean growth is welcome, and as Chair of EDF, I was pleased to see a number of the technologies that EDF is operating, developing or deploying included among the six ‘frontier Clean Energy Industries’ identified as having the greatest growth potential – such as nuclear fission, wind and heat pumps.
The fact that Government is acting to address the issue of high energy costs for energy intensive industries – which has long been a gap in the UK’s competitiveness story – is encouraging, even though details on the funding of this remain unclear. At EDF, as the largest electricity supplier to British businesses, we’re proud to be playing our part in reducing customers’ costs and helping them to use energy more efficiently.
Withstanding the test of time and institutions
The final and critical factor for industrial strategy is its ability to anticipate future economic developments and establishing institutional arrangements that can stand the test of time.
Clearly, viewed from today it is difficult to assess whether the Industrial Strategy will prove a success in this respect. But one area that does seem to offer considerable promise, and is likely to be a no brainer to bet big, is the digital economy. Seeking to position the UK as the destination to invest and innovate is both exciting and economically sound. At EDF we’re pleased to be contributing to the Government’s AI Energy Council, looking at how delivering clean power, and driving forward the UK’s AI ambitions, can fuel economic growth. I’m also on the board of BT Group, who are investing £15 billion in fibre connections for homes and businesses across the country – the foundation for the digital economy.
Similarly, the focus that has been given to security within the Industrial Strategy, including defence and energy security, is promising – and given the recent turn of events, these issues are unlikely to be going away anytime soon.
The Strategy has also taken into consideration the need for institutional durability. We’ve seen plans for a proliferation of new governance structures: the creation of a permanent Industrial Strategy Council on statutory footing, cross-departmental and cross-agency delivery boards, new Minister-led, mission-focussed taskforces across government and industry, as well as plans to recruit “industry champions” to support sector plan delivery. This approach is not cost free, but it does – importantly – provide institutional durability whatever changes lie ahead.
The question for Government and business three years from now will be whether we have been able to see measured improvement in the priority areas identified within the strategy – capital investment, skills development, improvement in planning timeframes and so on – as well as towards the delivery of sector plans.
To conclude with a quote from a famous energy luminary, Thomas Edison: “Vision without execution is hallucination.” The Industrial Strategy is done – the key focus now is all about execution. And success in execution depends on businesses stepping up to support the Strategy. At EDF we will be doing just that.
