All but abandoned due to widespread fear of state intervention, industrial strategy has made a resurgence under the new Labour government. For all but a brief period under Theresa May’s leadership, since the 1980s, we’ve questioned whether we need industrial strategy at all, rather than what the strategy should be. But after years of erratic industrial policy, it’s pleasing to see Labour place it at the heart of their plan for growth.
Labour are not simply harking back to the postwar period, suggesting subsidies and nationalisation for strategic British industry. Instead, they’ve taken on a ‘mission-oriented’ approach that seeks to tackle grand societal challenges by mobilising resources and fostering innovation across various sectors. At its heart is an ambition to move away from targeting specific industries, instead deciding broad missions that drive systemic change.
The missions that the government will set out on are to deliver clean power by 2030, harness data for public use, care for the future, and build a resilient economy. The first of these provides a measurable path to address a policy challenge whilst simultaneous exploiting a market opportunity. It implies a clear scope for the cross-sectoral collaboration required to address the complex challenge. If achieved, it can provide significant public value. This is a far cry from ‘picking winners’ strategy of yesteryear.
Unfortunately, the remaining goals fall some way short. None of them are expressed in terms which accurately portray the policy challenge they presumably seek to address. Their vague nature leaves the evaluation of their success completely down to interpretation. This has a major effect on the implementation of these missions. Solidified targets and objectives act as a beacon for stakeholders. They provide assurance that they are on the right track, ensuring actors in different sectors and even government departments work towards the same goal.
Collaboration on a unified goal is another area in which a departure from previous industrial strategies is sorely needed. Delivering clean power by 2030 requires coordination between the Treasury, the Department for Environment, Food and Rural Affairs, the Department for Energy Security and Net Zero, the Department for Science Innovation and Technology, among others. Actors from the renewable energy, construction, automotive, and financial services industries will need to share ideas with government and provide their unique perspectives on how to achieve the mission. New ‘mission delivery boards’ should go some way to establishing this way of working, but they must facilitate a bottom-up process that allows ideas to be generated by those with on the ground experience.
Industrial strategy by definition should outlast the electoral cycle. This creates issues when new governments, and even new party leaders, take office, deciding to lurch in completely different directions. The decision to re-establish the Industrial Strategy Council, providing it with statutory status is especially welcome. In the same way that the Office for Budget Responsibility scrutinises and can legitimise fiscal policy decisions, a statutory Industrial Strategy Council can help to anchor industrial strategy and potentially contributing to cross party agreement.
True success in industrial strategy lies in collaboration across sectors and political boundaries. The government has made pleasing steps towards fostering this collaboration, but there is more to be done. Achieving the necessary cross-party support will be crucial to ensure the UK’s industrial strategy remains effective over a long time horizon. Only through unified efforts can we build a resilient, innovative economy equipped to adapt to an everchanging world.