The UK must unite behind a ‘leapfrog’ industrial strategy to win in the new technology age – not let Brexit crowd it out says the CBI.
The fourth industrial revolution is on our doorstep, and the UK is in pole position to benefit from it. With its strong eco-system of large and small firms, outstanding science base, proven innovation and unmatched talent pools, the UK can be one of the world’s winners. The prize would be reversal of the UK’s poor productivity record, rising living standards and a fairer society.
But seizing the opportunity will need a new kind of industrial strategy. The opportunities are great, but so are the challenges. As many as 35% of jobs may be displaced by automation and artificial intelligence: new ones will take their place but will require a strategic approach to retraining. It needs to be long-term, rooted in a new ’partnership of the century’ between government and business, and crucially, it needs to be a ‘leapfrog’ strategy, aimed at the UK overtaking competitors, not just catching up.
The CBI survey of over 400 firms, published this week, shows there is strong consensus amongst firms (82%) that the main pillars of our new industrial strategy need to be people, infrastructure and innovation. They say that all three need to be transformed to power a new, modern economy. Uncertainty is taking its toll, with key concerns including: uncertain economic outlook (54%) and what post-Brexit trade will look like (39%)
An effective industrial strategy can be a tonic for uncertainty, but the Government must learn from historical missteps and build cross party consensus. To support this, the CBI recommends the creation of an independent Industrial Strategy body, similar to the OBR, that could measure, advise and build confidence that this plan will last. Regional industrial strategies are a large part of the solution. Every region of the UK has special strengths that can be unlocked by devolution and tailored strategies. To ensure no part of the UK is left behind, the CBI recommends the appointment of a regional commissioner to oversee delivery, regardless of local political structures.
Carolyn Fairbairn, CBI Director-General, says:“As uncertainty continues to bite on the UK economy, there has never been a more important time for the UK to unite behind a ‘leapfrog’ industrial strategy. The aim is to enable British firms to compete and win in the new technology age. It is also urgent. Change is coming at lightning speed and the world won’t wait for Britain.
“This means we can’t afford to let Brexit distract from the long-term action that is so badly needed. What’s at stake is the UK’s future in a global economy redefined by artificial intelligence and automation. Brexit must not be allowed to crowd this out.
“Firms agree on what matters most: transforming the UK’s skills base, modernising its physical and digital infrastructure and accelerating innovation. But they also agree that catching up is not enough.
“A leapfrog industrial strategy is within reach but not easy and will require a partnership of the century between government and business. Nobody wants to have this conversation again in four years’ time, and jobs and opportunity won’t wait around.
“We look forward to the publication of the Government’s strategy and to working with them and across all parties to build an industrial strategy that can stand the test of time and improve lives across the UK.”