Artificial intelligence, automotive innovation and life sciences have new investment ‘sector deals’, the government’s new industrial strategy confirmed this week. The long-awaited strategy aims to improve UK productivity, with digital infrastructure and skills playing a key role. Julian Blake reports.
Technology will play a pivotal role in boosting the UK’s flagging productivity, the government’s long-awaited new industrial strategy says this week, setting out four ‘grand challenges’ that the UK needs to embrace to ensure it makes the most of the opportunities they bring.
The strategy, unveiled on Monday by business secretary Greg Clark, sets out “a long-term vision for how Britain can build on its economic strengths, address its productivity performance, embrace technological change and boost the earning power of people across the UK.”
It is the first time since the 1970s that a UK government has put such emphasis on industrial strategy. It sees more investment in digital skills and infrastructure as key to boosting UK productivity, along with rebalancing inequalities between the south east and the rest of the country.
The strategy takes the form of a white paper, making its content firm government proposals. Real money attached to the strategy includes an extra £725m for the industrial strategy challenge fund, to support “programmes to capture the value of innovation”, and make the UK “the world’s most innovative nation by 2030”.
Clark confirmed that artificial intelligence, automotive and life sciences will be three of the first four to benefit from ISCF ‘sector deals’ to help them grow and equip businesses for future opportunities (construction being the fourth). Full details are expected by Christmas, though up to £210m of the new money will “improve early diagnosis of illnesses and develop precision medicine for patients”.
The government had already committed £1bn to the ISCF, with £246m for next-generation battery technology and £86m funding for new robotics hubs UK wide.
The strategy sees the four grand challenges as artificial intelligence, clean growth, an ageing society and the future of mobility. Each challenge “represents an open invitation to business, academia and civil society to work and engage with the government to innovate, develop new technologies and ensure the UK seizes these global opportunities.”
Alongside the challenges, the white paper focuses on what it sees as five foundations of productivity – ideas, people, infrastructure, business environment and places. Each foundation is supported by policies and budget commitments “designed to provide businesses with certainty and reassurance that the UK will continue to have a competitive edge”.
Money commitments include an extra £406m for maths, digital and technical education; £400m charging infrastructure investment and £100m to extend the plug-in car grant. £1bn in infrastructure investment will include £176m for 5G and £200m to encourage the roll-out of full-fibre networks in local areas.
R&D overall is set to rise from 1.7% to 2.4% of GDP by 2027. The government said this could mean £80bn in extra investment in advanced technology in the next decade.
An independent commission will monitor progress on delivery of the strategy, the government added.
Announcing the strategy, Clark said: “The way we earn and live our lives as workers, citizens and consumers is being transformed by new technologies. The UK is well-placed to benefit from this new industrial revolution and we start from a position of significant strength. We have a thriving research and science base and are home to a wide range of innovative sectors, from advanced manufacturing and life sciences, to fintech and creative industries.”
Business and policy analysts gave the strategy a mixed response. The Institute of Directors said there were “many miles left” to make it sustainable, and the CBI said the strategy was the start and not the end of the race.