UK’s strategic surplus risks confusion for business


It costs about £ 15 million on some estimates to create or reform a government department. So be thankful that Kwasi Kwarteng took a more effective approach.

Instead of changing the name of his department, he – in spirit – eliminated just one word. It can still be said that the Department of Business, Energy and Industrial Strategy (or Beis) is on the doorstep, but the ‘I’ has’ that has become the ‘Minister of Foreign Affairs” innovation ‘.

The process of rebirth that began in March with the jettisoning of the 2017 industrial strategy and the inconspicuous dissolution of the Industrial Strategy Council resulted in the UN’s innovation strategy, published this week.

This makes sense on one level. The discussion of industrial strategy has always troubled some in the Conservative government, given its associations with inefficient public ownership or the ‘picking winners’ approach in the 1970s. While innovation is good. Innovation is the future.

It is too. And the welcome recognition that the government is playing a role in encouraging and driving business innovation and harnessing it for other purposes, such as raising it, is a break from conservative orthodoxy in its own way. But there are still signs that something has been lost in the strategic reform of the United Kingdom.

Change is in itself part of the UK’s problem. The point of a successful industrial strategy is that it is a large framework that considers long-term and makes difficult decisions about what to prioritize. As with any strategy, it is meant to hold, which in this case enables businesses, universities, researchers and anyone else to make decisions and spend money in reliable confidence that the goalposts will not move.

The Treasury’s Plan for Growth, which has been designated as a replacement, has indeed shown part of the structure and language of its predecessor. But according to the analysis of the industry body Make UK, it made a significant shift from long-term planning: as you would expect from the holder of wallets, it was a collection of government growth initiatives for this parliament, rather than a lasting blueprint for the economy.

Does the latest document fill the gap? Not really. The Institute of Directors said it felt of a “series of ad hoc initiatives”. The ‘missions’ – probably very different from the ‘big challenges’ of 2017 – have not yet been decided. And the conversation about thriving blue-sky technology (AI, bioinformatics, photonics) has sat oddly alongside the here-and-now, productivity-enhancing business of management training and digital support for smaller businesses, which has already been announced.

Both areas are important. But overall, the strategy has not “hit the nail on the head of what drives businesses to engage in and invest in innovation,” said George Dibb, head of the Center for Economic Justice.

One problem, as always, is money. You do not expect a flurry before a spending review this fall. But the goal of raising annual public investment in R&D at £ 22bn, the government’s share of 2.4% of gross domestic product by 2027, is still to be supported by cold, hard cash. And the proliferation of bodies and initiatives, each of which is perhaps worthy of its own, dares a proliferation of small budgets that then can not make an impact.

For the ‘B’ in Beis, there is another issue: it has swapped one industrial strategy for what feels like countless others. Businesses that are currently facing the challenges of working through a ‘pingdemie’, has lost focus through the old sector deals, and is confronted with an ever-increasing list of 10-point plans and strategies, emerging from different parts of government and without a clear framework to tie them together.

Without coordination that can simply venture another ‘C’ word: confusion.

helen.thomas@ft.com
@helentbiz





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