Industrial Strategy - Building a Britain fit for the future

Nov 27, 2017 | Publisher: Techcelerate Ventures | Category: Business & Jobs |  | Collection: Strategy | Views: 6 | Likes: 1

Industrial Strategy Building a Britain fit for the future Industrial Strategy White Paper 2 Contents Foreword from the Prime Minister 04 Foreword from the Secretary of State 06 Introduction 08 Grand Challenges 30 Ideas 56 People 92 Infrastructure 126 Business Environment 162 Places 214 Conclusion: Britain and the world 240 Industrial Strategy White Paper 4 Foreword from the Prime Minister Over the last seven years, we have made huge progress in restoring our public finances and rescuing our economy from the brink of bankruptcy. Thanks to the sacrifices of the British people, the deficit is now down two-thirds since 2010, the unemployment rate is at its lowest in over 40 years and we have had 19 continuous quarters of economic growth. We should take enormous pride in these achievements and the difference they are making for many families and businesses in our country. But at the same time, we must also recognise there are some communities which have struggled to keep pace with changes in the global economy and as a result not fully shared in the prosperity that growth has delivered. For me it is not enough to see growth in the national economy if your local economy is shrinking. It is not ambitious enough to have record jobs growth, unless those jobs are secure and delivering real growth in wages. And we are not fulfilling Britain’s potential if, despite having scientists and universities renowned the world over, we cannot turn their ideas into the products and services on which the industries of the future will be built. That is why one of my first actions as Prime Minister was to begin the development of a modern Industrial Strategy that would help businesses to create high quality, well paid jobs right across the country. This document is a vital step in delivering that vision. More than just a set of announcements, it heralds a new approach to how government and business can work together to shape a stronger, fairer economy. At its heart it epitomises my belief in a strong and strategic state that intervenes decisively wherever it can make a difference. It is rooted in the conviction that a successful free- market economy must be built on firm foundations: the skills of its workers, the quality of the infrastructure, and a fair and predictable business environment. And where these are missing it takes energy and partnership between government and the private sector to address the problems. 5 That is exactly what this Industrial Strategy aims to do. It will help young people develop the skills they need to do the high-paid, high-skilled jobs of the future. It backs our country for the long- term: creating the conditions where successful businesses can emerge and grow, and helping them to invest in the future of our nation. And it identifies the industries that are of strategic value to our economy and works to create a partnership between government and industry to nurture them. In doing so, it will help propel Britain to global leadership of the industries of the future - from artificial intelligence and big data to clean energy and self-driving vehicles. Two centuries ago it was our industrial revolution which led the world. Thirty years ago, it was our bold, pro-market reforms which set an example for others to follow. Today, our ambition is just as high. As we leave the European Union and forge a new path for ourselves, so we will build a Britain fit for the future and fulfil the mission that I set on my first day as Prime Minister: to make our United Kingdom a country that truly works for everyone. The Prime Minister 6 Industrial Strategy White Paper Foreword from the Secretary of State We are at one of the most important, exciting and challenging times in the history of global enterprise. Powered by new technologies, the way we live our lives as workers, citizens and consumers is being transformed across the world. Britain is extraordinarily well-placed to benefit from this new industrial revolution. We are an open enterprising economy, built on invention, innovation and competition. Our universities and research institutions are among the best in the world. We have a deserved reputation for being a dependable and confident place to do business, with high standards, respected institutions, and the reliable rule of law. We have achieved near historic levels of employment. We are a crossing point for the world because of our geographic position, the English language, our strong ties, our openness to ideas and our vibrant culture. We have many industries - from financial services to advanced manufacturing, from the life sciences to the creative industries – which are world leading. To benefit from the opportunities before us, we need to prepare to seize them. This would be needed at any time, and Britain’s decision to leave the European Union makes it even more important. More decisions about our economic future will be in our own hands, and it is vital that we take them. In our Industrial Strategy we set out how we will build on our strengths, extend them into the future and capitalise on the opportunities before us. A serious strategy must also address the weaknesses that keep us from achieving our full potential. For all the excellence of our world- beating companies, the high calibre of our workforce and the prosperity of many areas, we have businesses, people and places whose level of productivity is well below what can be achieved. By improving productivity while keeping employment high, we can earn more – raising living standards, providing funds to support our public services and improving the quality of life for all our citizens. So this Industrial Strategy deliberately strengthens the five foundations of productivity: ideas, people, infrastructure, business environment and places. As well as setting a path to improved productivity, our Industrial Strategy sets out four areas where Britain can lead the global technological revolution. These four Grand Challenges – in artificial intelligence and big data; clean growth; the future of mobility; and meeting the needs of an ageing society – have been identified on the advice of the our leading scientists and technologists. They will be supported by investment from the Industrial Strategy Challenge Fund and matched by commercial investment. Our Industrial Strategy will inform decisions now, and in the future. Other countries have benefited from establishing policies and institutions which endure. That is our aim. Through the consultation on our Green Paper, over 2,000 organisations from all parts of the United Kingdom have helped shape this strategy. That partnership with innovators, inventors, job creators, local leaders, the devolved administrations, workers and consumers will continue as we work together to make our country fit for the future. 7 Rt Hon Greg Clark MP Secretary of State for Business, Energy and Industrial Strategy Industrial Strategy White Paper 8 Introduction 9 Nam quiaeperibus eictur adic te proratam, aut dicium quo quam aceaqui blatemo luptaepudam. Ide inte pererum arum nihitat as inctate nim harum et duciis ad ut ariberibust, sequunt od eium quibus, tentus et unt ommolor ecaero ipsam. Tem veligenis ullorer rorition enis eum quiae posam, sin ratquissima volecer sperumquam que erum Industrial Strategy White Paper Overview: We will create an economy that boosts productivity and earning power throughout the UK Our five foundations align to our vision for a transformed economy 5 foundations of productivity Ideas the world’s most innovative economy People good jobs and greater earning power for all Infrastructure a major upgrade to the UK’s infrastructure Business environment the best place to start and grow a business Places prosperous communities across the UK We will set Grand Challenges to put the United Kingdom at the forefront of the industries of the future: AI & Data Economy We will put the UK at the forefront of the artificial intelligence and data revolution Clean Growth We will maximise the advantages for UK industry from the global shift to clean growth Future of Mobility We will become a world leader in the way people, goods and services move Ageing Society We will harness the power of innovation to help meet the needs of an ageing society 10 11 Key policies include: Ideas ` ` Raise total research and development (R&D) investment to 2.4 per cent of GDP by 2027 ` ` Increase the rate of R&D tax credit to 12 per cent ` ` Invest £725m in new Industrial Strategy Challenge Fund programmes to capture the value of innovation People ` ` Establish a technical education system that rivals the best in the world to stand alongside our world-class higher education system ` ` Invest an additional £406m in maths, digital and technical education, helping to address the shortage of science, technology, engineering and maths (STEM) skills ` ` Create a new National Retraining Scheme that supports people to re-skill, beginning with a £64m investment for digital and construction training Infrastructure ` ` Increase the National Productivity Investment Fund to £31bn, supporting investments in transport, housing and digital infrastructure ` ` Support electric vehicles through £400m charging infrastructure investment and an extra £100m to extend the plug-in car grant ` ` Boost our digital infrastructure with over £1bn of public investment, including £176m for 5G and £200m for local areas to encourage roll out of full-fibre networks Business Environment ` ` Launch and roll-out Sector Deals – partnerships between government and industry aiming to increase sector productivity. The first Sector Deals are in life sciences, construction, artificial intelligence and the automotive sector ` ` Drive over £20bn of investment in innovative and high potential businesses, including through establishing a new £2.5bn Investment Fund, incubated in the British Business Bank ` ` Launch a review of the actions that could be most effective in improving the productivity and growth of small and medium-sized businesses, including how to address what has been called the ‘long tail’ of lower productivity firms Places ` ` Agree Local Industrial Strategies that build on local strengths and deliver on economic opportunities ` ` Create a new Transforming Cities fund that will provide £1.7bn for intra-city transport. This will fund projects that drive productivity by improving connections within city regions P̀rovide £42m to pilot a Teacher Development Premium. This will test the impact of a £1000 budget for high-quality professional development for teachers working in areas that have fallen behind ` We will ensure our Industrial Strategy will endure by creating an independent Industrial Strategy Council that will assess our progress and make recommendations to the government. Industrial Strategy White Paper 12 The challenge for the future The United Kingdom is a successful, competitive, open economy. We have many strengths on which we can build, and some weaknesses we need to address. As we leave the European Union we need to raise our game at home and on the world stage. This can be done if we seize the opportunities of the years ahead – and it is essential if the British people are to enjoy prosperous lives with fulfilling work and high quality public services. At the same time, the world is changing in fundamental ways. Technological innovations are transforming how we live and work. The proportion of older people in our society is growing. The way we generate and use energy is changing rapidly. The Industrial Strategy sets out how we are building a Britain fit for the future – how we will help businesses create better, higher-paying jobs in every part of the United Kingdom with investment in the skills, industries and infrastructure of the future. It ensures that our country and its citizens can embrace and benefit from the opportunity of technological change. Technological innovations are transforming how we live and work 13 Our vision is for: ` ` the world’s most innovative economy ` ` good jobs and greater earning power for all ` ` a major upgrade to the UK’s infrastructure ` ` the best place to start and grow a business ` ` prosperous communities across the UK To achieve this, we must ensure every part of our country realises its full potential. We are taking action now, including making the biggest ever increase in public investment in research and development, establishing a new fund to drive productivity by improving connections within city regions, and agreeing Sector Deals which will drive transformation in investment and productivity across the economy. This Industrial Strategy is for the long term. It provides a policy framework against which major private and public sector investment decisions can be made with confidence. It is a strategy that is being implemented with, not just for, British enterprise – with the full involvement of innovators, investors, job creators, workers and consumers in England, Scotland, Wales and Northern Ireland. It is also a strategy that recognises and respects the devolution settlements of Scotland, Wales and Northern Ireland. With many of the policies that can drive productivity being devolved, it is a strategy that necessarily brings our work together with that of the devolved administrations as we work in partnership to get the best possible outcome for every part of the UK. The strategy set out in this paper is the work of many people, businesses, local leaders and institutions. It builds on nearly 2,000 formal responses to the public consultation on our Green Paper, Building our Industrial Strategy1, from all types of organisation, sectors of the economy, groups of businesses and individuals – and many thousands of contributions through our programme of engagement throughout the UK over the last 10 months. Industrial Strategy White Paper 14 Our approach Our consultation reinforced the importance of five foundations of productivity – the essential attributes of every successful economy. These are Ideas, People, Infrastructure, Business Environment and Places. Our focus on them responds to the detailed feedback to the Green Paper. Our five foundations align to our vision for a transformed economy – a transformation that is already taking place and will accelerate over the course of the coming decades: . Our five foundations Ideas the world’s most innovative economy People good jobs and greater earning power for all Infrastructure a major upgrade to the UK’s infrastructure Business Environment the best place to start and grow a business Places prosperous communities across the UK Through this process we have also identified Grand Challenges which we will set for the UK government and wider economy. These are in response to global forces that will shape our rapidly changing future, and which the UK must embrace to ensure we harness all the opportunities they present. The Grand Challenges commit to: ` ` put the UK at the forefront of the artificial intelligence and data revolution; ` ` maximise the advantages for UK industry of the global shift to clean growth; ` ` become a world leader in shaping the future of mobility; and ` ` harness the power of innovation to help meet the needs of an ageing society. Our foundations and Grand Challenges are set out in the sections that follow. This strategy also refers to a number of policies that will be added to over time to support the foundations and drive the UK’s transformation. 15 We will: Ideas ` ` raise total research and development (R&D) investment to 2.4 per cent of GDP by 2027; ` ` increase the rate of R&D tax credit to 12 per cent; ` ` invest £725m in new Industrial Strategy Challenge Fund programmes to capture the value of innovation; People ` ` establish a technical education system that rivals the best in the world to stand alongside our world-class higher education system; ` ` invest an additional £406m in maths, digital and technical education, helping to address the shortage of science, technology, engineering and maths (STEM) skills; ` ` create a new National Retraining Scheme that supports people to re-skill, beginning with a £64m investment for digital and construction training; Infrastructure ` ` increase the National Productivity Investment Fund to £31bn, supporting investments in transport, housing and digital infrastructure; ` ` support electric vehicles through £400m charging infrastructure investment and an extra £100m to extend the plug-in car grant; ` ` boost our digital infrastructure with over £1bn of public investment, including £176m for 5G and £200m for local areas to encourage roll out of full-fibre networks; Business Environment ` ` launch and roll-out Sector Deals – partnerships between government and industry aiming to increase sector productivity. The first Sector Deals are in life sciences, construction, artificial intelligence and the automotive sector; ` ` drive over £20bn of investment in innovative and high potential businesses, including through establishing a new £2.5bn Investment Fund, incubated in the British Business Bank; ̀launch a review of the actions that could be most effective in improving the productivity and growth of small and medium-sized businesses, including how to address what has been called the ‘long tail’ of lower productivity firms; ` Industrial Strategy White Paper 16 Places ` ` agree Local Industrial Strategies that build on local strengths and deliver on economic opportunities; ` ` create a new Transforming Cities fund that will provide £1.7bn for intra-city transport. This will fund projects that drive productivity by improving connections within city regions; and ` ` provide £42m to pilot a Teacher Development Premium. This will test the impact of a £1000 budget for high-quality professional development for teachers working in areas that have fallen behind. These policies, alongside the many others set out in this document, are the first strategic actions of a long-term approach to transform our levels of productivity and our earning power as a nation, as businesses, as places, and as individuals. We are ready to be judged on our performance in implementing them. We will agree Local Industrial Strategies that identify and build on strengths across the country 17 Building on our strengths The UK is a fundamentally strong economy, with widely admired institutions and some of the world’s leading businesses and universities. We have some of the highest employment rates in Europe2. We are a location of choice for businesses at the cutting edge of innovation and technology, attracting more overseas investment in R&D than many major countries, including Germany, France and China3. Our flexible labour market, high levels of employment and competitive environment – with high standards and a dependable rule of law – make us a great place to do business. Source: United Nations Conference on Trade and Development (2017) World Investment Report 2017 Inward foreign direct investment $400 $300 $200 $100 $0 UK inward investment compared to other countries USD billions2016 2007 USAUKChinaHong KongNetherlandsSingaporeBritish Virgin IslandsBrazilAustraliaCayman IslandsIndiaRussian FederationCanadaBelgiumItaly Industrial Strategy White Paper 18 We are ranked seventh globally in the World Bank’s Ease of Doing Business Index4. Our strengths are many and diverse: from our scientific and financial prowess to the vitality of our cultural and artistic life. We have many creative and innovative businesses and we are strong in key sectors, from automotive and aerospace to food and drink and creative industries. We have millions of jobs in financial, professional and business services, which are also our country’s biggest exporters5. We are at the cutting edge of technologies such as satellites and synthetic biology. Countries are keen to invest in our education and learn from our discoveries in health care. The UK ranks in the top five in the Global Innovation Index6. We need to make the most of these strengths so that we can be at the forefront of emerging technologies and industries in the years ahead. The UK also contains some of the world’s most attractive places to live, work, invest and be entertained. London is a world-leading hub for financial services, creative industries, tech businesses and more; a global city which continues to be a magnet for international businesses and talent. In recent years the UK’s ‘Core Cities’, including Birmingham, Manchester and Glasgow7, have seen their economies transformed, while many smaller cities and towns such as Milton Keynes, Oxford and Cambridge have been hotspots for job creation. We must promote growth through fostering clusters and connectivity across cities, towns and surrounding areas. 19 Addressing our weaknesses For all these strengths, we have an urgent need to improve. In recent decades we have not made the most of our export potential, invested too little, and have not nurtured some of the skills we need. Too many of the UK’s cities outside the capital underperform against the national average. We cannot tackle our problems unless we openly acknowledge them and accept we all share the responsibility for addressing them. Our analysis and the responses to our Green Paper point to some important weaknesses in the UK economy that we are determined, unflinchingly, to correct. In particular, Britain’s productivity has long lagged behind that of our competitors8. At a time of astonishing technological advance, output per hour worked in the British economy has been weak since the financial crisis9. Source: Data based on analysis of ONS national accounts and ASHE data (courtesy of Professor Paul Gregg, the University of Bath). *Hourly earnings is defined as mean compensation per employee hour. Hourly earnings and output per hour, index: 1993=100 150 140 130 120 110 100 90 80 70 60 50 Hourly earnings Output per hour 2015 2010 2005 2000 1995 1990 1985 1980 1975 Rising wages depend on growing productivity Industrial Strategy White Paper 20 We are proud of our flexible labour market that has delivered jobs for millions and we have achieved near record employment rates10, but this must now be accompanied by the sustained higher productivity that is the essential requirement for higher wages. Unless we improve productivity while holding on to high employment, we cannot raise living standards and quality of life for all our citizens. Our relatively weak productivity performance is, to a significant degree, a problem of composition: we have some of the most productive businesses, people and places in the world but also a ‘long tail’ of underperformance. Britain’s top businesses are among the most admired in the world, but if the long tail of lower productivity persists, it will hold back UK growth, wages and living standards11. By addressing the disparities we can improve our overall productivity and earning power. Taking action now These are challenges that have been recognised by previous governments - we can learn from their successes as well as try to avoid their mistakes. We successfully rebuilt our automotive industry by deliberately attracting investment from abroad, notably from Japan and more recently from India and continental Europe. The initiatives of previous governments such as the advanced manufacturing strategies, the Eight Great Technologies, and the Catapult network have all contributed to our international reputation. These are strengths we can draw on and they present further opportunities to improve productivity and create good new jobs. The very speed of technological change and the convergence of technologies present enormous opportunities. We are a nimble economy and we can move quickly to take advantage of innovations. We also have smart consumers who reward entrepreneurs developing new products and services. We know that the earliest adopters of new technologies are able to reap the greatest rewards in terms of additional jobs and increased revenue. 21 GDP per hour worked, 2016, index: UK=100 Germany France US Italy UK Canada Japan 40 50 60 70 80 90 100 110 120 130 140 Country UK productivity relative to other G7 countries The role of government We have learned from previous attempts at industrial strategy – what has worked, and what has not. It is important to have a clear understanding of what a government can and cannot do. We believe in the power of the competitive market - competition, open financial markets, and the profit motive are the foundations of the success of the UK. Indeed the best way to improve productivity is to increase exposure to competition. But governments have a responsibility that extends beyond promoting competition. We have to work systematically through the factors responsible for higher productivity and earning power – the five foundations of Ideas, People, Infrastructure, Business Environment and Places that are central to this White Paper. Source: ONS (2017) International Comparisons of Labour Productivity. Industrial Strategy White Paper 22 Governments in successful economies have recognised their strategic power and leadership role, allowing them to coordinate and convene efforts to develop and disseminate new technologies and industries. Individuals, businesses and researchers are motivated by ambitious missions – global and national challenges that need to be tackled by breaking down traditional barriers and finding new ways of doing things. From sequencing the human genome and tackling Aids to hosting the 2012 Olympics, we have seen successive governments identify ambitious missions that drive new endeavours. Governments can make long-term investment that no single commercial or academic player can take alone. The modern nation state is the most powerful means we have of pooling risk. We are willing to take these risks, which means accepting not all will work out successfully. An industrial strategy that avoids risk is no industrial strategy at all. We have studied previous attempts at industrial strategy, which have had successes as well as failures. One lesson is that governments cannot do this on their own, instructing and planning but never listening or consulting. So our Industrial Strategy is a partnership with businesses, workers, universities and colleges, local government and the devolved administrations where we work together to achieve our goals. From sequencing the human genome to hosting the London 2012 Olympic and Paralympic Games, we have seen successive governments identify ambitious missions that drive new endeavours 23 Grand Challenges It is not enough just to look at the economy we have. We must make preparations for the economy we need to become. We need to be acutely aware and take advantage of the world-changing trends which will shape Britain in the decades ahead. This is where the government must provide the strategic leadership set out above to support the development of new technologies and position the UK at the forefront of the industries of the future. In this Industrial Strategy we propose a number of Grand Challenges. These are developments in technology that are set to transform industries and societies around the world, and in which the UK – if we muster our forces across sectors – has the opportunity to play a leading global role. These Grand Challenges are an invitation to business, academia and civil society to work together to innovate and develop new technologies and industries in areas of strategic importance to our country. We set them out in more detail in the next chapter. Following extensive consultation during the consultation for our Green Paper, our four Grand Challenges will be: putting the UK at the forefront of the artificial intelligence and data revolution; maximising the advantages for UK industry from the global shift to clean growth; being a world leader in shaping the future of mobility; and harnessing the power of innovation to help meet the needs of an ageing society. Industrial Strategy White Paper 24 Global Britain The decision to leave the European Union was not a decision to retreat from the world. In fact we need to embrace it – to trade more not less. We must remain an open, liberal market economy. There are opportunities to be gained upon leaving the EU. The opportunity to become more protectionist is not one of them. Britain’s future has to be one of free trade with the whole world, including with the rest of Europe. The EU accounts for the largest proportion of UK trade12. The size and proximity of the EU single market and our close connections with it mean the EU will always be a major trading partner. The government believes it is overwhelmingly in our mutual interest to agree a comprehensive and ambitious UK-EU economic partnership that enables the most free and frictionless trade possible with minimal disruption to business. We should be optimistic and ambitious about what we can achieve, as we share the same beliefs in free trade, rigorous and fair competition, strong consumer rights and high standards. There will, inevitably, be uncertainty while we determine the precise nature of our future trading arrangement with Britain’s future has to be one of free trade 25 the EU. To minimise this, we are seeking to agree an implementation period, of around two years, to allow business time to adapt to the new arrangements. This will ensure that no one has to go through two sets of changes, and will allow businesses to make decisions once there is greater certainty about the final outcome. Our Industrial Strategy is designed to place us at the forefront in finding solutions to both UK and global emerging trends and challenges. As set out in our paper Preparing for Our Future Trade Policy13, we will reach out to old friends and new allies in expanding access to markets, supporting our businesses to export, and welcoming investment and collaboration from emerging and established partners from across the globe. The International Monetary Fund projects that above 80 per cent of world growth is likely to come from outside the EU in the near future14; we need to be ready for the opportunities such growth will bring. We are in discussions with a number of countries about future options, including full Free Trade Agreements. But Free Trade Agreements are not the only tools at our disposal. We aim to put in place mechanisms to improve trading relations and remove barriers affecting UK businesses, and we will work closely with the devolved administrations as we forge new and deeper trade relationships around the world. Our Industrial Strategy will be flexible to take account of developments in negotiations between the UK and the EU or changes in the global economy. While our Industrial Strategy will adapt, we will always be consistent in maintaining the principles of an open economy and fair competition that creates the conditions for businesses to thrive. Industrial Strategy White Paper 26 Partnership with the devolved administrations The truly generational challenges and opportunities to which our Industrial Strategy responds apply throughout the UK. In addressing these issues we recognise and respect the devolution settlement and the empowerment it has offered the people of Scotland, Wales and Northern Ireland. There are important aspects of the five foundations of Ideas, People, Infrastructure, Business Environment, and Places that are associated with policies that are devolved, and we are committed to working in partnership across all four nations to reach the best possible outcome for every part of the UK. Our Union offers a unique opportunity. The UK government and the devolved administrations can each learn from each other in areas of common interest. For example, Scotland has made great strides in energy efficiency and has one of the most effective systems for translating advances in life sciences into improved patient care. Wales’s Sêr Cymru programme is attracting leading scientific talent matched to its innovation strengths. Northern Ireland is fostering a burgeoning cybersecurity business and research community. Wales’s Sêr Cymru programme is designed to attract the highest calibre candidates to work in research groups in Welsh universities, such as Cardiff 27 Devolution has never meant that the UK government does not exist to serve the people and the economies of the devolved nations. This is exemplified in the funding we provide throughout the UK to support innovation excellence, and next generation digital infrastructure to connect urban and rural communities, and in the promotion of our national strengths as part of the GREAT campaign. We also know that it is collaboration between our governments that results in some of the most powerful actions taken within the devolved nations. The six City Deals agreed in Scotland and Wales are testament to the impact that partnerships within the devolved nations can achieve. These deals have yielded ambitious investments driven by priorities identified by communities themselves, with a £1.6bn UK government investment bringing forward more than £3bn in funding from other partners. And we remain committed to further ambitious City and Growth Deals across Wales, Northern Ireland and Scotland. The Scottish Government and the previous Northern Ireland Executive have also recently published industrial and economic strategies and the Welsh Government is to do the same in the coming weeks. These publications reflect ambitious thinking for each economy and identify priorities that align fundamentally with the five foundations of this Industrial Strategy, whether in Scotland’s focus on innovation and entrepreneurship or Northern Ireland’s emphasis on inclusive growth. In our Green Paper we committed to working with the devolved administrations as part of ministerial forums. This joint working has proven valuable, and as we implement our long-term strategy we will recommit to that partnership, seeking to tackle our shared opportunities with a focus on: addressing our shared Grand Challenges; making Sector Deals work for businesses across the UK; ensuring that our institutions collaborate for maximum impact; and working together on priorities for places. Industrial Strategy White Paper 28 A strategy for the long term, with benefits now The responses to the consultation showed us that people and business want confidence that our Industrial Strategy will endure – that it is a framework they can use for decision making and that it can be expected to last. The best way to secure this is for the strategy to command the widest possible support. We must earn this through the quality of the decisions we take and by sharing the evidence on which they are based. Yet commitment must not mean inflexibility – we need systems that adjust to new evidence and new challenges. One key to this is data. Governments must practise what they preach about the opportunities of the data revolution. That means being innovative in how we collect and analyse economic data. To support evaluation and further understanding of the economy, we aim to make the UK the best understood major economy. We will be developing a joint programme of work with the Office for National Statistics, academics and other stakeholders that will identify the gaps in our evidence base. The UK government also stands ready to work with the devolved administrations, where appropriate, to ensure the strongest possible data is held and used across the UK; in particular as we continue to transfer powers from the 29 UK to the Scottish Parliament in line with the Scotland Act 2016. We want to make more micro-level data available so people can study and understand our economy. This will enable us to improve significantly how we identify strengths and weaknesses in specific parts of the country. It will provide a shared evidence base on which we can build our Industrial Strategy. We must have the right reporting mechanisms in place to ensure we achieve our ambitions. The Economy and Industrial Strategy Cabinet Committee, chaired by the Prime Minister, will remain responsible for our strategic vision and for driving delivery across government. We will create an independent Industrial Strategy Council that will develop measures to assess and evaluate our Industrial Strategy and make recommendations to the government. The Council will have access to relevant government data and will be funded to commission specific evaluation projects as appropriate. It will be drawn from leading business men and women, investors, economists and academics from across the UK. The real test of a successful strategy is the consequences it has for the lives of our fellow citizens. That must mean more good jobs and better pay. We are committed to high quality jobs for all UK citizens: that is why we will be responding to and building on the recommendations of the Matthew Taylor Review to ensure that employment rights are protected and workers can benefit from new technology. By addressing these challenges we will be able to achieve the central objective of our Industrial Strategy – to improve living standards and economic growth across the country. This strategy is our long-term plan to ensure that people in all parts of the UK are able to lead fulfilling and prosperous lives, and that we can all make the most of the opportunities that lie ahead. Industrial Strategy White Paper 30 Grand Challenges 31 The fourth industrial revolution is of a scale, speed and complexity that is unprecedented Industrial Strategy White Paper 32 Grand Challenges We will set Grand Challenges to put the United Kingdom at the forefront of the industries of the future. The world is undergoing a technological revolution. Artificial intelligence (AI) will transform the way we live and work, from the way we diagnose and treat cancer to the security of online transactions. This fourth industrial revolution is of a scale, speed and complexity that is unprecedented. The first industrial revolution mechanised production using water and steam power; the second created mass production using electric power; the third automated production using electronics and information technology. This fourth revolution is characterised by a fusion of technologies that is blurring the lines between the physical, digital and biological worlds15. It will disrupt nearly every sector in every country, creating new opportunities and challenges for people, places and businesses to which we must respond. This is not the only seismic global change to which the UK needs to respond. We owe it to ourselves and future generations to lower carbon emissions and move towards cleaner growth; we are facing a fundamental demographic shift as our population ages; and we are on the cusp of a profound shift in how we move people, goods and services around our towns, cities and countryside. We need to make the most of the global market opportunities these changes present. We must also embrace the technological advances that improve productivity across many sectors, as well as the quality of our everyday lives. A truly strategic government must do more than just fix the foundations: it must also plan for a rapidly changing future, look to shape new markets and industries, and build the UK’s competitive advantage. The public and private sector must work with universities, researches and civil society to put the UK at the forefront of these revolutions, breaking down conventional barriers within and between business sectors and academic disciplines. This is what the Grand Challenges will achieve. History shows governments around the world have taken advantage of global challenges. In the 1970s, the UK government was instrumental in developing the North Sea oil and gas industry. More recently, thanks to tailored public support, the UK has built the largest off-shore wind capacity of any country16 and developed world class gene sequencing technologies. Overseas, Germany’s Industrie 4.017 is an example of a government helping prepare the country to take advantage of major trends, while in the United States the Defense Advanced Research Projects Agency (DARPA) and other 33 ‘A truly strategic government must do more than just fix the foundations: it must also plan for a rapidly changing future.’ public research institutions have played a significant role in developing the technologies behind the internet and smartphone, spurring the growth of entire new markets. Other countries are already looking to capitalise upon the fourth industrial revolution. Japan, for example, has deliberate strategies to prepare for and to embrace these transformational changes in technology. The ability to meet our Grand Challenges rests on broad capabilities. The DARPA programme has been effective because it is part of a much wider research and development (R&D) effort. Our capacity to act nimbly and effectively depends on maintaining capacities across a wide range of technologies and disciplines. We can engage now with the challenge of AI because of previous investments in high performance computing. Similarly, we can rise to the challenge of an ageing society because we have already invested in resources such as the UK Biobank, which tracks the health information of 500,000 volunteers18, and we have a lead in understanding the interaction between genes and environment. We must continue to support a broad range of key capabilities and emerging technologies. We also need to be clear where our distinctive advantages lie. We will build on our existing strengths, from cybersecurity, machine learning, microelectronics design and composite compound chip technology to biotechnologies and life sciences such as genetics and cell therapies. At the same time we must develop new strengths in emerging sectors. We must do this as a partnership between businesses, scientists, investors, educators and policy makers to take full advantage of the transformational potential of these trends to improve people’s lives, their work and the nation’s productivity. This partnership must be UK-wide, embracing our four nations. The UK government needs to work in collaboration with the governments and businesses of Scotland, Wales and Northern Ireland. Just as we committed in the Green Paper to holding ministerial forums with each devolved administration, we will work together to rise to each of the Grand Challenges. Industrial Strategy White Paper 34 What are the Grand Challenges? We have taken evidence from our Green Paper consultation, and worked with scientific leaders – the Government Office for Science, UK Research and Innovation (the Research Councils and Innovate UK), the Council for Science and Technology and the national academies – to identify four Grand Challenges. We will: ` ` put the UK at the forefront of the artificial intelligence and data revolution; ` ` maximise the advantages for UK industry from the global shift to clean growth; ` ` become a world leader in shaping the future of mobility; and ̀harness the power of innovation to help meet the needs of an ageing society. ` We must not expect that every individual action will bring guaranteed or immediate success. Through inviting competing proposals and ideas, the government will identify, support and fund a range of promising projects. We must not let a fear of failure make us unimaginative or risk averse. The government must be willing to back a broad portfolio of risky initiatives rather than be constrained by the possibility of individual failures. To respond to the Grand Challenges, business, academia, civil society and We will build on our strengths, including in cybersecurity machine learning, microelectronics design and composite compound chip technology 35 ‘Business, academia, civil society and the government must engage together, bringing their expertise and entrepreneurial spirit, to drive us all towards success.’ the government must work together, bringing their expertise and entrepreneurial spirit, to drive us all towards success. By setting out strategic visions and a positive role for government we hope to attract the engagement of some of the brightest minds from across the private and public sectors. For each Grand Challenge, we will ask leading figures from industry and academia to act as expert advisors, led by a ‘Business Champion’. Working alongside ministers, these figures will be responsible for engaging a diverse range of industry voices and raising the profile of the challenge. They will advise on how to make the most of the global opportunity it presents and review how we can work together to respond to it – such as improving supply and increasing demand in nascent markets, and ensuring that innovations can diffuse and scale. We will look to appoint Business Champions and external advisers in early 2018. We will ensure that the government makes the most of all its policy levers to achieve success. Levers include regulations, funding and Sector Deals. We will also direct the government’s convening power, promote exports and inward investments, and build consumer trust in new technologies. Where appropriate, teams will develop ‘missions’ to tackle the Grand Challenges. They involve tackling specific problems, such as reducing carbon emissions by a given percentage over a specific year period19, using well defined and concrete goals to allow progress to be monitored and assessed, and the option to change course when appropriate. Progress on each Grand Challenge will be regularly reviewed to ensure that policies are having the desired impact, we are focusing on the correct issues, and we are aware of any changes in the UK’s advantage over other countries. In the next section we set out some early priorities for each of the four Grand Challenges. These will be developed in more detail with the Grand Challenge teams over the coming months including setting missions where appropriate. Industrial Strategy White Paper 36 Growing the AI & Data-Driven Economy We will put the UK at the forefront of the AI and data revolution. Artificial intelligence and machine learning are general purpose technologies already starting to transform the global economy. They can be seen as new industries in their own right, but they are also transforming business models across many sectors as they deploy vast datasets to identify better ways of doing complex tasks – from helping doctors diagnose medical conditions more effectively to allowing people to communicate across the globe using instantaneous speech recognition and translation software. Embedding AI across the UK will create thousands of good quality jobs and drive economic growth. A recent study found digital technologies including AI created a net total of 80,000 new jobs annually across a population similar to the UK20. By one estimate, AI could add £232bn to the UK economy by 203021. We start from a position of strength. The UK is already a world leader in AI, with the building blocks to make significant advances. We have some of the best research institutions in the world and SecondHands is a research project led by Ocado Technology that aims to design a collaborative robot that can offer help to maintenance technicians working in Ocado’s highly automated grocery warehouses 37 globally-recognised capability in AI-related disciplines, including maths, computer science, ethics and linguistics. We have substantial datasets in public institutions where AI can be explored safely and securely. We have great strengths in the underpinning technologies, from ARM’s microchips to the microcomputers of Raspberry Pi. UK innovators push boundaries in robotics and the internet of things. These strengths are the result of academic excellence, research ingenuity, smart business decisions, and investment by previous governments of different political persuasions. As with previous revolutionary technologies, these changes cannot be resisted and it would be irresponsible to fail to prepare. Meeting our Grand Challenge means maximising the opportunities created by AI and advanced data technologies, and responding to the potential impacts on society. It is a call for businesses, research institutions and the government to work together throughout the UK to invest in these technologies, encourage their adoption and set standards in secure, trusted use of data. The AI and data-driven economy Artificial intelligence: technologies with th

Over the last seven years, we have made huge progress in restoring our public finances and rescuing our economy from the brink of bankruptcy. Thanks to the sacrifices of the British people, the deficit is now down two-thirds since 2010, the unemployment rate is at its lowest in over 40 years and we have had 19 continuous quarters of economic growth.

About Techcelerate Ventures

Tech Investment and Growth Advisory for Series A in the UK, operating in £150k to £5m investment market, working with #SaaS #FinTech #HealthTech #MarketPlaces and #PropTech companies.

×

Modal Header

Modal body