The industrial strategy white paper digested

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The Autumn 2017 Budget was overshadowed by the OBR decision to downgrade growth forecasts based on the endemic productivity problems within the UK economy. The industrial strategy white paper ‘Building a Britain fit for the future’ represents a concerted, cross-government attempt to address these issues – via a focus on five foundations: ideas, people, infrastructure, business environment and places.

These five concepts serve as the organising principles of the document – rather than, say, a section on the contributions of universities, or on measures to encourage corporate research and development spending. These, and other issues, ebb and flow throughout the 255 pages. But does all this add up to a strategy, or just a “will this do?” mish-mash of new and old announcements?

Why an industrial strategy?

A government “industrial strategy” has a charming Bennite resonance – back in 1975 it was Tony Benn who put forward “A Ten-Year Industrial Strategy for Britain” in a ten-page pamphlet. Come the 1980s this style of interventionist industrial policy was terminally unfashionable as the “invisible hand” of the market was seen as paramount – the idea of the government “picking winners” felt like an affront to natural forces.

Two major financial crashes and a Brexit vote later, and taking more of an oversight of what the economy and industry is actually doing seemed much more sensible. When Theresa May changed BIS into BEIS “innovation and skills” became “industrial strategy” in the acronym. It’s a sign, if you like, of the resurgence of “big government” ideas as the centre of gravity in public policymaking shifts slowly to the left.

For me, reading through a higher education lens, we need to pay attention to the skills and R&D ends of the equation. This neatly fits both teaching and research university missions, with a side order of knowledge exchange.

Skills, training, and retraining

The Office for Students features in the industrial strategy, and it will have a major role to play, and a hands-on role at that. OfS will “address employer and student needs and expectations in the short, medium and long term – considering the skills gaps that exist today, and anticipating the demands of the future economy.” This is not a new announcement, but does remind us that however strong the language around funding following student choices may get, the HEFCE-esque role of acting as a central procurer of services on behalf of the wider economy still exists.

And we have another confirmed sighting of the “major review” into funding for level 4 and 5 education, both in the general flavour, and slanted towards technical education as in the 2017 Conservative Party Manifesto. The best expression – and the closest we’ve gotten yet to a remit – is on page 116:

The government is committed to conducting a major review of funding across tertiary education to ensure a joined-up system that works for everyone. As current and significant reforms move into implementation, this review will look at how we can ensure that the education system for those aged 18 years and over is accessible to all and is supported by a funding system that provides value for money and works for both students and taxpayers, incentivises choice and competition across the sector, and encourages the development of the skills that we need as a country.”  

In other interventions – there’s early indication that the government is working with the Royal Society and British Academy on “encouraging universities and employers to signal the value of level 3 maths qualifications” for entry to undergraduate courses. 

But the majority of the action takes place around technical education and the compulsory sector. There’s a pending consultation on the new T-levels to look out for, and the government will be working with the Institute for Apprenticeships to prioritise skills needs in particular industries. Employers will now be able to transfer 10% of their apprenticeship levy to another employer, including within their own supply chain. This will help small organisations – which don’t pay the levy – to access funding, and could also be seen as a response to the disappointing take up of places last year.

Careers education sees a further nudge towards a comprehensive careers strategy – another one to look out for – though this will be particularly focused on provision in schools and colleges. Likewise the incentives around performance measures for schools and colleges will recognise vocational routes as equally valid to the traditional A-levels.

There’s money for edtech too – £30m to support the use of artificial intelligence and innovative education technology in delivering online digital skills courses.  This will form a part of a new £64m National Retraining Scheme, focusing initially on basic skills in digital and construction training. The key organisation in this space – Jisc – has a track history in supporting such work in both HE and FE.

Research, development and data

UK Research and Innovation will play a part in the nascent “sector deals”, which sit alongside the promise of a further £725m towards the Industrial Strategy Challenge Fund. The emphasis is on using government spending to unlock money from the commercial and charitable sectors so this lowish increase needs to be seen in that perspective.

There’s movement on access to some government data for business – the example given is within the Life Sciences Sector Deal, where “digital innovation hubs” provide controlled access to medical data, in a similar way to the work of the Administrative Data Research Network and Farr Institute, for researchers at universities. The thrust of the “Data Trust” (which also crops up in the artificial intelligence sector deal) is to help businesses which need to use data to access it with appropriate safeguards. But the sector should note that this offers opportunities directly to business that had previously been restricted to universities. The nuances will need detailed perusal, but it is possible that a key advantage to involving a university in a research collaboration has been lost.

It seems that the sector deal approach includes an offer (sometimes including research funding) tailored to specific needs. For instance, a proposed Creative Sector Deal looks likely to involve AHRC funding for university/business partnerships (or “Creative Clusters”) and a national Creative Industries Policy and Evidence Centre. Similarly, the Artificial Intelligence sector will see the creation of a government Office for Artificial Intelligence, a GovTech fund and an expansion of the “Tech City UK” initiative (to become “Tech Nation”, obviously).

There is, also, a Future Sector Deal – with a particular remit to support disruptive industries. This has a regulatory rather than research focus, with a ministerial working group on future regulation and support for a new £10m regulators pioneer fund. This will also support more horizon scanning within government, so issues where existing regulation and new business models clash (Uber would be one example…) can be identified in good time.

Localism, and devolved nations

Were a national industrial strategy not enough, we’ll see the development of “local” industrial strategies led by the mayoral office for city deals and local enterprise partnerships (or devolved equivalents) elsewhere. The role of universities in growing innovation ecosystems is noted, with specific measures and needs identified by science and innovation audits. A £115m/year “Strength in Places” fund will support collaborative programmes between universities, employers and LEPs.

As the white paper puts it:

“Strong local economies around the world tend to have some key attributes. They have a good supply of skilled labour; they are well connected and have land available for homes, offices and factories; and they have rich innovation ecosystems, often built around a university. They have an attractive cultural environment“

There’s a lot of work universities can do here – but despite this, there’s no direct plans for new universities. The Institutes of Technology – another of the few aspects of the 2017 Conservative Manifesto to survive unscathed – will address higher level skills needs (there’s yet another consultation pending) alongside four flagship employer-led National colleges.

The verdict

The common critique of the green paper was that it was long and “bitty”. Similar points could be advanced against the updated version. But it feels faintly unfair to do so, the range and diversity of action required will always be difficult to present as a coherent whole – the Sector Deal and local strategies go a long way to devolving policymaking closer to where impact will be felt, and allowing for policy (and funding) to address key issues as required.

But – sensible as this sounds – it will always lead to a lack of “big” headlines that shape and promote the perception of new government thinking. Released on the day of a Royal Wedding announcement, this goes double. But perhaps that very lack of national attention – leaving the consultation to the wonks and experts, as it were – will result in a sufficiently nuanced and responsive approach to go some way to address what is fast becoming a national productivity crisis.

2 thoughts on “The industrial strategy white paper digested”

  1. Gabriel Huntley says:

    Really good summary and analysis David. Just one small point – IoTs in their current form are quite different in scope to what was envisaged in the Conservative manifesto in June: the focus appears to be on supporting HE-FE partnerships rather than creating new institutions which was the implications there

  2. grahamh says:

    The IoT prospectus which came out last week suggests more of an emphasis on “new institutions”. Thoughts?

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