Since then, UK governments have directed any form of industrial strategy towards the financial sector. But with manufacturing central to the Government's plans for recovery, and with growth remaining sluggish, there are calls for a renewal of industrial intervention by the state. Last month, Vince Cable warned Prime Minister David Cameron that Britain needed to ‘pick winners’ and follow other rich countries getting behind their major industrial firms.
There are signs that Britain’s reliance on the financial sector is waivering. ‘We are now throwing away the biggest asset which is London’s great financial centre. No other country would be as bad with it than we are,’ Marc Bolland, the CEO of M&S, told MT during a discussion on the future of capitalism.
So is it time to brush off the cobwebs and bring back industrial policy? John Cridland, head of the CBI, thinks so: ‘I see a tremendous disconnect between where public policy is heading and skills the economy actually needs’, he told MT. ‘I’m sure the government thought it was doing something really spot on when announcing that vocational qualifications were weighted too high in the educational system. But businesses were never consulted. Something that was probably the right announcement lacked any reference to industrial policy.’
An industrial policy would involve the Government giving its backing to successful British firms in sectors like the car industry and aerospace. Some of Britain’s biggest corporations agree that certain industries need a boost. Olly Benzecry, MD of Accenture UK and Ireland, argues that the UK has relied ‘very heavily on the financial services to create wealth for a long time’. This meant other parts of business, like advanced manufacturing, missed out.
He says if shared values were promoted by the government, and more emphasis given to education and R&D, it might address the skills shortage. ‘Establishing what schools and companies need to do would become a much easier task. Some industrial policy would be a good idea in five or six chosen areas’, he added.
For others, though, the idea is still treated with caution. Adrian Beecroft, the veteran venture capitalist and founder of APAX, warned it shouldn’t be introduced as an afterthought. ‘I am very nervous about industrial policy being stolen for the purposes of supporting failing industries, as often happens’, he said.
Others take a more pragmatic approach - sometimes you just have to accept that Britain can’t be good at everything. ‘Some knowledge is imported from outside the UK,’ Bolland adds. ‘Why would we do it on our own when some countries in the world are already very advanced in certain skills?’
- See the April issue of MT for our round-table looking at the UK's return to growth and the future of capitalism. The full panel included M&S CEO Marc Bolland, Amanda Sourry, the Chairman of Unilever UK & Ireland, Olly Benzecry, MD of Accenture UK & Ireland, the Royal Society of the Arts CEO Matthew Taylor, CBI Director-General John Cridland, Adrian Beecroft, Chairman, Dawn Capital & the founder of Apax Partners, MT Editor Matthew Gwyther and Val Gooding, Chairman, Premier Farnell. See a full transcript here.