Following Greg Clark’s speech yesterday at the IOD, a few thoughts on creating a forward-looking Industrial Strategy fit for a digital age:
I have seen the future and Britain is not part of it.’ (George Osborne, 2006, Silicon Valley)
Ten years after George Osborne made this observation during a trip to Silicon Valley, there can be little doubt about Britain’s emergence as a dominant force of technology-driven innovation.
Since 2006, UK tech companies have collectively raised almost $10 billion, and we’ve seen homegrown startups scale to a global level, such as CityMapper and TransferWise.
Across all traditional industries and sectors — agriculture, aerospace, health and science, to name a few — we are witnessing the rapid expansion of digital technologies to boost productivity, improve lives and address some of the country’s most pressing socio-economic challenges.
What’s more, there now exist millions of people who work in new cross-sector tech-driven jobs that didn’t exist in 2006. From app developers to Uber drivers — and where taxpayers’ money was once used to bail out ailing banks, the government now invests in new FinTech partnerships with Singapore and Korea, and cutting edge innovations such as driverless cars.
But ten years on, we once again face a new future we won’t be part of — the EU — but also, an unknown future where artificial intelligence, robotics, advanced life sciences, cybersecurity and big data will dominate.
So once again, we need to look ahead to the next ten years and challenge ourselves. Are we — our governments, organisations communities, and as individuals — best equipped for our new global future?
It’s here that the new Industrial Strategy will play a critical role, against a backdrop of a data-driven global economy, and it was great to hear Greg Clark, the new Secretary of State at BEIS, support our nation of entrepreneurs yesterday and the importance of startups. But one area that wasn’t touched on was the importance of digital innovation to ‘upgrade our country.’
The very name — an Industrial Strategy — summons an image of a time bygone — where government propped up ‘national champions,’ with a heavy reliance on strategic sectors — but whereas iron and steel were the raw materials of our industrial age, data is the raw material of the information age, and is shaping our societies and economies in a dramatic fashion.
To take one example; ninety percent of the world’s digital data has been generated over the last two years, with industrial firms embedding sensors into their products to better manage their supply chains and logistics. The result is that the Industrial Strategy of today means something very different to the past with the proliferation of the information age.
But while we must remain vigilant and plan ahead for the challenges caused by the pace, scale and breadth of technological change, it would be a mistake to view the old versus the new, as two competing forces. But instead, the traditional and the non-traditional require strategic integration as part of a forward-looking Industrial Strategy.
Germany’s Industrie 4.0 was created specifically to deal with the fusion of the online world and the world of industrial production, to establish Germany as a lead market of advanced manufacturing solutions — backed heavily by private investment, including Deutsche Telekom, SAP and Siemens. Angela Merkel describes this approach as a race ‘not yet won’, but again, rather than a race (that will not be won) — perhaps instead of winners vs. losers, our new Industrial Strategy focuses on identifying our best teams of industrial and technical talent across the UK, with a specific High-Tech Strategy 2026. This could focus specifically on industries (traditional and emerging) with the highest-level of local expertise and potential for fast-growth, supported by the appropriate growth-driving innovations of the tech sector. For example, the role of the big data market as a source of revitalisation for our industrial regions. Big data analytics is estimated to contribute an average of £40 billion per year to the UK economy from 2015 to 2020 (a cumulative value of £241 billion between 2015 and 2020).The total data equity benefits come from efficiency savings of £220 billion, followed by £12 billion from innovation and £8 billion from business creation.
But also, an approach that identifies and actions where government, national and local, needs to step back and allow new innovations to thrive, unburdened by regulation and bureaucracy.
A good example is Manchester; a city that historically owes much of its wealth to the textile industry and is now home to a buoyant fashion sector. Digital technology has been instrumental in creating new players, as retailers move online and capitalise on the opportunities of e-commerce. A keystone initiative is the Sharp Project, a 200,000 square foot production space for digital entrepreneurs, which takes it name from the long-departed Sharp electronics factory. Across the UK, there exists untapped potential to both build on similar legacies of the past, but also identify and invest in the industries of the future. For example, the Newcastle accelerator Ignite is currently looking at creating an industrial style programme, working with engineers to embed tech in their local businesses. How far could we replicate this approach across sectors and the UK, to support startups, cross-sector collaboration and local growth, but also, integrate with the skills strategy to identify how best to equip a future workforce.
While we have made progress with our digital skills agenda and many excellent initiatives exist across the country, we still require a national strategy for supporting digital skills. One area of Coadec’s policy focus is the potential to introduce a digital element to the existing National Citizen Service to encourage digital enterprise. Or new regional centres of learning that pool the necessary digital equipment and training for young people to learn, rather than the onus on individual schools. Young people are often far ahead of their teachers in digital learning — do we need to think a bit more imaginatively about how best we upskill young people?
We also need to consider our approach to lifelong learning for people who require digital training, or want to set up their own web-based business. It’s here that the private sector has a greater role to play, by providing in-work digital learning, (or access to skills training), to ensure we don’t fall any further behind on a global scale. Research shows that only 38% of UK businesses offer training, compared to 67% in India.
In short, a High-Tech Industrial Strategy that bridges the past and the future — tradition and innovation, minds and machines — to encourage new growth across the UK, and build a future we can all be proud of ten years from now.
Startup Voices: An Industrial Strategy fit for a digital age
