The previous weblog
simply outlined the major issues addressed by the White Paper for
Industry Strategy. Itself part of the outcome of the findings from
The Industrial Strategy Commision.
The Commission's
leading participant's comprised of few people: respected Economists
and Public Policy Advisors, orientated around Manchester and
Sheffield Universities, with one foot in the past (regards the Coal
Board) and the notional 'future' (regards Nano-technology).
The academic centres
and original candidates obviously chosen to illustrate the
metamorphosis from old industry to new industry; and to support the
notion of the regional transition toward the Northern Powerhouse as a
prime element of the eventual Industrial Strategy.
The Commission itself
then, seemingly created to fulfil the ideological need to be seen to
re-invent and re-energise swathes of the 'long forgotten' North and
elsewhere. As such it was obviously a politically generated totem, to
provide new hope for large sections of 'down-trodden' and
'water-treading' society.
Its Key Recommendations
were:
1. Universal Basic
Infrastructure – for all citizens
2. Health and Social
Care – well-being a focus
3. Place Matters –
“something for everywhere, not everything for everywhere”
4. Further and Faster
Devolution – decentralisation to empower local regions and cities
5. Innovation Policy –
utilising the state's purchasing power to boost innivation
6. New Institutions –
a Treasury led, new institutional framework
7. Monitoring and
Measuring Success – via the Office for Strategic Economic
Management
8. New Methods of
Appraisal – overhaul of large project decision-making process
So as to meet the
strategic goals...
A. Ensure Adequate
Investment in Infrastructure
B. Decarbonise the
Energy Economy
C. Develop a
Sustainable Health and Social Care System
D. Unlock Long-Term
Investment
E. Support High Value
Industries and Build Export Capacity
F. Enable Growth in All
Parts of the UK
These recommendations
and goals are of course derived from the utopian idealism of a better
and more socio-economically stable nation with greater local identity
to motivate participants.
This the very necessary
political message of the era, so it should be no surprise that the
Commission was sited in the North and that its efforts were born largely from the considerations of Political-Economics and
Social Public Policy generalists. Who (though experts in their
respective fields, given prominent positions as advisors to various
Boards) were themselves appointed to formulate what was effectively a
predetermined formulaic message.
But it is (and will be)
of course, thanks to the contribution of Commerce, Industry (small,
medium and large), the insightful sections of Academia and other
realistically informed economic stakeholders, upon which the basic
framework of the ultimate Strategy rests.
They must formulate the detailed superstructure upon the underpinnings of national
regional challenges and global macro socio-economic trends.
Thus, to utilise the
parallel metaphor of the Construction sector, the Commission provided the
broad brush strokes of the Architect's loose 'concept rendering', and
the Strategy Council will seemingly operate as the Concept
Engineers.
But it will be Industry
Leaders (British and Foreign) who will have to actually undertake the
vast majority of the work. Euphemistically acting as the : Structural
Engineers, Site Surveyors, Quantity Surveyors, Groundworks, Scaffold Erectors, Brick-layers, Carpenters, Plumbers,
Electricians, Second-Fix, Last-Fix and Snagging Inspectors
On to the White Paper
itself....
To delve deeper, the
following summarises the content of the White Paper's accompanying
presentation.
Firstly, to repeat....
The Grand Challenges
encompass -
- Artificial Intelligence and Data Economy
- Clean Growth
- Aging Society
- Future of Mobility
These themes operate
both as individual forces at the micro-level (such the competition to
create advanced electronics and software amongst rivals, or at the
research level to make the leap from binary digital to
'neural-networks' to even the realms of the cyber-organic) , as a
consequence of the human motivation for driving theoretical and
part-proven innovation, yet also more presciently when the themes converged with new era innovative solutions derived
from new exploratory solutions that provide various answers to
mutually coalesced trends, from 2 to 4 of the Gran Challenges
identified.
That November 2017
presentation states that...
….“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, researchers and civil
society....breaking down the conventional barriers within and
between business sectors and academic disciplines. This is what the
Grand Challenges will achieve”.
The White Paper cites
Germany's 'Industrie 4.0' as a good example of government assiting
industry, while in the USA (the well known) DARPA Competitions have
spurred innovation such as the internet and smart phones.
[NB The history of
innovation if often blurred, since typically (as with Marconi and
Baird per Television) simultaneous but separate similar research-work
will likely be underway in various laboratories. But more likely, the
very nature of syndicated research, by academia, government and
industry, will – with god national research policy – seek to
connect the various aspects of an 'innovation chain' – that
illustrated the innovative origins to come from multiple sources.
The Internet itself has
been variously stated as deriving from Tim Berners-Lee at when at
CERN, UK Universities, the US Military (fort then 3C Comms) and
various US Universities. Thus we see that world changing innovation
rarely stems from a single source].
The UK's competitive
advantages are seen by the White Paper as:
- Cyber-Security
- Machine Learning
- Micro-Electronics
Design
- Composite Compound
Chip Technology
- Biotechnologies and
Life Sciences
Thus, once again to
reiterate historic experiences...
...“Simultaneously,
new strengths must be built in emerging sectors, by deploying
partnerships between Business, Scientists, Investors, Educators and
Policy Makers”.
“These
Partnerships must be nation-wide, in accordance with (successful
achievement of) Devolution”.
“For each Grand
Challenge leading figures from induetry and academia will act as
Expert Advisors, led by a Business Champion, operating in tandem with
Ministers, to raise the profile of the specific Challenge. How to
make the most of a global opportunity, like buoying nascient markets
with supply-side initiatives to boost initial low-level demand, and
ensuring innovations can 'diffuse' and 'scale-up' “.
As regards each Grand
Challenge, the following provides greate insight into the ambitions
and levels of funding :
Artificial
Intelligence:
Boosting of STEM
subjects, Ethics, Linguistics, Datasets, Microchips, Microcomputers,
Robotics and the Internet of Things.
(Since 2010 the CAGR
of AI has been 57%, from £0.2bn to nearly £2.0 by 2016).
Aims: to make the UK a
Global AI Centre, 'Next Generation of Services', 'Early Diagnostics
and Precision Medicine', Regulaton to foster AI via ideas generation
'Sandbox' schemes.'
The Alan Turing Centre
will become the National Research Centre for AI with Fellowships.
£45m for PhDs and
related disciplines.
Industry funded
Masters programmes, starting with 200 places.
Cross-Discipinary
learning for professionals to apply AI in their fields.
The AI Council to
perform a leadership role, reporting to new AI Gov't Office.
Promotion of
greater Diversity in the AI labour force
6 Priority business
sectors: Cyber-Security, Life Sciences, Construction, Manufacturing,
Energy, Agriculture
The 'Digital Catapult'
provides various assistance packages for Start-Ups, SMEs and large
Corporations.
The 'Global
Entrepreneur' programme to attract foreign ventures into the UK for
HQs
New Centre for Data
Ethics and Innovation – world's 1st AI advisory body.
£406m for Skills
Development in Education and Industry, with New National Centre for
Computing Education.
National Re-Training
Scheme to reskill and upskill.
Clean Growth:
(In tandem with
published Clean Growth Strategy)
Low Carbon
Technologies and Efficiency of Resources.(perhaps x4 nominal GDP
growth)
New Industries created
and Existing Industries transformed.
Paris Agreement of
2015 seeks to Revolutionise: Power, Transport, Heating, Cooling,
Industrial Processes and Agriculture.
Public and Private
Financing, (individually and cooperatively).
(Since 2011 Global
Green Bond issuances risen from $3bn to $125bn in 2017)
Clean-Tech
primarily directed to Autos, Aero and Construction sectors.
New Markets: eg Smart
Energy Systems, 'Bio-Economy' (renewable bio-based resources from
land and sea to produce food, materials and energy).
Cities – cleaner
air, Rural – regenerated natural capital
Electric Vehicle
Manufacturing, Off-Shore Wind Power, Smart Energy Systems,
Sustainable Construction, Precision Agriculture, Green Finance.
Partnership ideology
between Industry, Academia, Government and Civil Society
Support Schemes to
assist the upfront costs of Innovation development, roll-out and
scale-up
(regulation, taxes,
investment to promote new market growth) and so Commercialise
International
initiatives (eg Mission Innovation)
To make Clean-Tech the
more cost effective alternative to High-Carbon Trad-Tech.
Future Mobility:
UK as World Leader in
Shaping Next Gen Mobility
Profound Changes in
Mobility Models for People, Goods and Services
Innovation in
Engineering, Technologies and Business Models
Major Investments in
Electrification, Automation and Network Efficiency of Road Vehicles
and Rail Networks.
Autonomous Aerial and
Marine Transport
'On Demand'
Ride-Hailing Services, Ride-Sharing, 'Mobility as a Service'...new
perspectives
Potential to Transform
Public Transport
Road and Rail
De-Congestion and Improved Traffic Flow, De-Pollution and Efficiency
(Electric Cars (all
but basic hybrids) sales risen from 1,000 in 2010 to 38,000 by 2016)
Government aim of
testing fully self-driving cars on UK roads by 2021
New Flexible
Regulatory Framework to Encourage Transport Innovation
Changes to Codes of
Practice for Automatic Vehicle Testing
Law Commission
projects to create Regulatory Frameworks for Automated Vehicles
£400m Charging
Infrastructure Investment Fund (£200 of which by Gov't)
£100m Plug-In Car
Grant (NB since retracted)
£40m (to be matched
by Industry) for Charging Tech, On-Street and Wireless
Government to lead
with 25% of Central Gov't cars Ultra-Low Emmisions by 2022.
Publication of a
'Transition to Zero Emissions Road Transport' Strategy.
To be World Leader in
Development, Manufacture and Use of ULEV vehicles.
The blurring of
distinction between private and public transport
A Mobility Marketplace
that Functions Differently to the Transport System of Today
Publish 'The Future of
Urban Mobility' Strategy
The National
Infrastructure Commission's Innovation Prize per AI Road-Building
West Midlands a UK
Centre of Expertise and Key Testing Location for best entries
£5m for the 5G
Testbeds and Trials, as of 2018, including maximising productivity
benefits
Support for Simulated
Environments to accelerate developments
Centre for Connected
and Autonomous Vehicles Research Competition
Ageing Society :
“We will harness
innovation to help meet the needs of an ageing society”
Longer lifespans and
reduced birth rates across the Developed world
Baby-Boomer generation
reaching retirement
This prospect requires
people to plan their lives differently
Older peoples will
create new demands for tech, products and services,
eg new care tech,
new housing models and innovative retirement financial instruments
Government's
obligation to help older people lead independent, fulfilled lives,
contributing
UK population aged 65
+ : 1976 14%, 2046 25%
Innovative age related
products and services assist Uk productivity and wellbeing
These solutions
offered to a growing global marketplace
Without action, an
aged society is a rediced labour force and so a poorly productive
one.
“If we succeed, we
will have an economy that works for everyone”
Increased support of
Smart Home-Tech, 'Wearables', other Health-Tech
British businesses
having redesigned jobs and workplaces to align to older needs
Workers will have more
flexibility to balance work, caring and life.
Younger generations
able to plan life-long careers with confidence
Japan - at the
forefront of the Ageing Challenge.
Britain - NHS
datasets, Design Institutes, AI Research, Life Sciences, Fininancial
Services
4 Priority Areas
identified:
- General Support :
'Healthy Ageing' project, New Markets, Foreign Markets,
- Sector Support :
Business Champion to adapt business for older and all worker types
- Health Data : NHS
data can help create new tools to diagnose and treat illness earlier
Regional
Innovation Hubs to use data for research purposes, regulated by
National Data
Guardian
Health and Social Care
Devolved, but Tech opportunities can be taken
'Data to Early
Diagnostics and Precision Medicine' programmes
- Care Provider
Support : to alter business models and new models of care, and use of
the
Growth Hub Network
The Five 'Foundations'
to meet the abovementioned Challenges are, once again and expanded:
- Ideas
- People
- Infrastructure
- Business Environment
- Places
Ideas :
Ambition “to be the
world's most innovative economy”
Past examples of Jet
Engine, Bagless Vacuum Cleaner, World Wide Web etc
[herein questionable
examples :
Jet Engine - technology led by the Germans
Bagless
Vacuum - tech transfer from industry processing
WWW –
various sources.
Perhaps, citing more
convincing examples would engage more people, since STEM enthusiasts
themselves (as 'born researchers') can easily investigate each's
origins].
However, to continue
UK is home to 4 of the
top 10 Universities in the world.
Must ensure New
Discoveries are translated into applications in Industry / Commerce
Need for greater
investment by Private sector and Government.
The biggest increase
in Public Investment in history
Key Policies :
Research Expenditure of 2.4% of GDP by 2027, Increase Research Tax
Credit to 12%, Invest £725m in Industrial Strategy Fund
Innovation is about
New Ideas in Technologies, Products and Services
From Radical
Transformation or Incremental Improvements, from In-House Incumbent
or New Insurgent Business, a major Scientific Advancement or
Technology Transfer
Ideas = Productivity
Gain = Higher Earnings Power
The UK Research Base
(field weighted) shows a marginal shift away from Business,
Humanities and Social Sciences....marginally toward....Engineering,
Physical Sciences, Environmetal Sciences, Biological Sciences and
Clinical Sciences.
“Over half UK firms
Innovatng” in Business Practice, Organisational Methods, Marketing,
Processes, New Products.
23% above EU average
performance
Product Leaders: Life
Sciences, Aero, Auto, Technology, Energy, Creative Industries.
Service Leaders : Law,
Accounting, Financial Services, Insurance, Architecture
The UK attracts
foreign talent (into Universities and into Professional fields)
Four Key Challenges
the Industrial Strategy will address:
- Level of Public and Private Investment: 1.7% vs 2.9% USA, 2.8% Germany(this even so [likely because] a Services dominated economy). Innovation most seen in a small number of big firms in Autos, Pharma, Technology; 75% of Investment by 400 firms. SME's perform worse than EU counterparts. New Research strengths within EM countries. Public spending stimulates the Private by 140%.
- Ability to Commercialise : historically seen than UK ideas can founder or are quickly purchased by MNCs (eg MRI scanner, Lithium-Ion Battery, Monoclonal Anti-bodies, Genetic Sequencing. “the D aspect of R and D needs boosting”. Much UK innovation is in Software and Branding. Uk is good at low-cost innovation and flexible start-ups, but poor at the long-haul process regards Technology. In general, UK businesses favour quick routes to market, rather than long development times. And selling businesses rather than growing them.
- Growing Research and Innovation : need to maximise University, Public Project and Leading Business innovation activities. Bolster these strengths and the Local Eco-Systems that support Innovation and Sustained Growth.
(Britain sits 20th
in the world for % of GDP R and D Expenditure)
Science and
Innovation Audits (led by a consortia of business, universities and
local enterprise partnerships) reveal distinct local and regional
strengths, and opportunities for inter-regional collaboration. But
also recognise Barriers against building Eco- Systems by attracting
Investment and Talent.
4. Remain as a
Global Collaborator : 17% FDI and >50% activity in Foreign MNCs
Grow International
Connections to be part of Foreign Innovation Stories.
“By 2030 to be the
most innovative country in the world”.
Vision for a
Knowledge Led Economy
'Innovation Clusters'
around Universities (Research / Business / Entrepreneurship),
driven by STEM
subjects academic enhancement.
To jump-start,
£12.5bn Public Expenditure for 2021/22 (£9.5bn in 2016/17)
New Innovation
Roadmap focused on Key Sectors and Technologies and Clusters,
aswell as Access to
Finance, Altered Regulatory Frameworks, Intellectual Property
£725m (as 2nd
wave) of the ISC programmes
£300m (over 3 years)
in world class talent
Create better
relations between Research and Investment, just 50 businesses
responsible for 40% of private sector investment globally.
(Attracting +5% from this top 50 would add +/- 30% to R and D
funding.
Operate with UKRI to
develop a Strategic Priorities Fund per a 'Common Fund'
This to identitify
multi-disciplinary and inter-disciplinary Research topics
Also to provide +20%
budget rise for 2019/2020.
'Quality Research'
also highlighted via Research England at university level
Innovate UK to also
be better assisted to help business collaborate, with piloting of:
- £50m innovation
loans
- Investment
Accelerator for private equity 'seed-funding' alongside grant
funding
British Business Bank
to have new Investment Fund, for access to Venture Capital so as to
'scale-up' the nascient business.
Grant competitions
run in 2017/18 worth £150m in assisted funding.
Agile Regulation to
promote innovation yet protect the citizenry via Digital Charter
Improved Public
Procurement as important source of finance to innovative firms...
...so as to not
dilute equity and so endorses others to invest.
The USA's Small
Business Innovation Research programme seen as guide...
- the GovTech
Catalyst Fund >£20m/3 years to gain more efficient public
services
- the 'nquiringminds'
case study (per dataset exchange in Belfast)
The new Umbrella
organisation of UK Research and Innovation better integrates:
- 7 Research
Councils
- Innovate UK
- Higher Education
Funding Council (for England)
The Industry
Challenge Fund – Wave 1 assisted:
- Batteries to
design, develop, produce Electric Vehicles and Remewable Energy
- AI and Robotic
Systems for Extreme Environments (space / nuclear)
- Satellites
- Medicines
manufacture
Wave 2 assists:
- Eco-Construction
and Low-Impact Use
- Renewable Energy
and Smart Systems
- Global Food and
Clean Water Production
- Audio-Visual
Immersive Technologies
- Next Gen Services
(across various disciplines)
- Early Diagnosis and
Precision Medicine
- Healthy Ageing
UK Research and
Innovation to create:
- New Knowledge
Exchange Framework across Universities....alongside
- (Research
Excellence Framework)
- (Teaching
Excellence and Student Outcomes Framework)
The 5 Foundations
Demonstrate that :
Under the heading of
'Ideas', obviously Research and Development investment was the prime
issue, with a sought total economic input of 2.7% of GDP by 2027.
With also £725m put
into the Industrial Strategy Challenge Fund.
Under 'People', the
creation of a Technical Education system that mimics the best of UK
Higher Education; so as to redress the much declined capabilities in
the STEM subjects.
With £406m invested,
and a retraining scheme focused on IT and Construction.
Under 'Infrastructure',
an increase in the 'National Productivity Investment Fund' to £31bn,
regards Transport, Housing, Digital Infrastructure.
To support Electric
Vehicles with £400m in Charging Infrastructure and £100m additional
to the Plug-In Car Grant.
£1bn public investment
in infrastructure including 5G and £200m for local Full-Fibre
Networks.
The 'Business
Environment' improved with 'Sector Deals' as partnerships between
government and industry to improve sector productivity.
Initially in Life
Sciences, Construction, Artificial Intelligence and the Automotive
Sector.
Over £20bn of
Investment in Innovation and high potential businesses via an initial
£2.5bn Investment Fund incubated within the British Business Bank.
To review how to assist
productivity in SMEs.
Specifically the 'long
tail' of lower productivity firms.
[NB The 'long tail'
idiom is the idea of a small firm to gain sizeable profits from
selling many various niche-volume products: this focusing upon
'Niche' instead of 'Volume' or 'Differentiation'.
A good example – with
its own recent 'aero-induced long-tail' vehicle variant is McLaren
sports cars. All part of the apparent customer preferance for
non-mainstream as a way of self-identification of being different,
this at all levels of the price spectrum, from Hyper-Cars to
Hyped-Coffee]
As regards 'Places',
the desire to agree Local Industrial Strategies that utilise local
strengths and economic opportunities. Creation of a Transforming
Cities Fund via £1.7bn worth of intra-city projects, that drive
productivity with improved physical connections. And a pilot Teacher
Development scheme at a cost of £42m with £1,000 for professional
development in 'fallen behind' subjects.
Quite obviously, thus
far a broad and shallow overview.
At press release, the
accompanying slide presentation's qouted that... “We are a location
of choice for businesses at the cutting edge of innovation and
technology, attracting more overseas investment in R and D than many
other major countries, including Germany, France and China”. And
beyond, flexible labour, a competitive environment and rule of law
were cited as strong incentives for FDI. Ranked 7th
globally per the World Bank's 'Ease of Doing Business' Index.
Strengths were
recognised in Automotive, Aerospace, Food and Drink, the Creative
Sectors and elsewhere in Financial Services and Business
Services.....from Satellites to Synthetic Biology to General
Healthcare.
The 'Core Cities' of
London, Birmingham, Manchester and Glasgow cited as obvious economic
hubs, whilst vibrant local economies in areas like Milton Keynes,
Oxford and Cambridge, are seen as model towns; to be replicated if
possible. Within this regional development schema, the age old
recognition of the need to promote growth via inter-connection and
the cluster-effect; even in a notional cyber age.
National weaknesses
were also recognised by way of under-use of 'Export Potential',
itself hampered by Under-Investment in Education, Skills and Plant.
It is recognised that
too many cities outside London 'under-perform' against the national
average, and so National Productivity is poor compared to
international peers. However, the advantages of Flexible Labour
structures must be matched by Sustained Higher Productivity, so as to
promote higher wages; the key to improving living standards across
the country.
Critically, the 'Long
Tail' problem seen as crucial to resolve.
This term a euphamism
for the apparent large chasm that exists between the performance of
the Best Corporates and SME firms.
[NB though the previous
McLaren Cars example and that of revived Harris Tweed illustrate that
not always so. Though obviously far easier to reserect a famous name
that to start from scratch – hence the rebirth of Brabham and
Lister; though brands such as 'House of Hackney' (domestic interiors)
as once new start-ups are able to do so if themselves reviving
specific historical design trends]
As of 2016 Britain's
GDP per Hour Worked was behind Germany, France, the USA and (even)
Italy, only slightly above Canada (with small population) and Japan
(aged population).
To re-invigourate, one
(now presently concerning) clarion call was made at the timeof
release...
“We successfully
rebuilt our Automotive Industry by deliberately attracting investment
from abroad, most notably from Japan and most recently from India and
continental Europe”
[NB Though of course
presently in Q1 2019, we see the slow-down and possible closure of
Honda's Civic production in Swindon, Nissan's altered plans for
X-Trail production in Sunderland via 'repatriation' to Japan, BMW's
altered plans for production at Oxford to include only higher margin
Minis and likely new 1-series so as to cover costs, and JLR's
retrenchemnt of people and model programmes given parent TATA's
cautiousness (the idea of a hardly aesthetically altered even higher
priced Range Rover 'Coupe' always a bad idea and thankfully no more),
whilst Jaguar seeks to reconsider and rationalise its model-line
(combing XE and XF...presumably to create room for a smaller B-C
category car) whilst also effectively sponsoring the rebirth of
Lister as a revived UK brand.
Turbulant times for
volume UK Autos, but at last the appearance of rationalisation, given
the unjustified concept and production exuberance seen in the latter
half of past decade].
Beyond Autos, deployed
initiatives to date included the 'Advanced Manufacturing Strategies',
the 'Eight Great Technologies' and the 'Catapult Network'.
This then followed in
the footsteps of other successful economies, which through strategic
leadership were able to “coordinate and convene efforts to
develop and disseminate new technologies and industries. Individuals,
businesses and researchers are motivated by ambitious missions”.
“Governments can
make long-term investment that no single commercial of academic
player can take alone. The modern nation state is the most powerful
means we have of pooling risk”.
[NB Hereafter the
presentation talks of 'risk' and plays-up the Silicon Valley idiom of
elevating risk, even if “accepting not all will work out
successfully. An Industrial Strategy that avoids risk is no
Industrial Strategy at all.”
This is somewhat
non-sensical, since the whole point of strategy is to avoid and
reduce risk, whether upon sector by sector, business by business, or
product by product basis.
Small-scale
inevitabilities of 'risk' do occur, since a Capitalist and Mixed
Economy is obviously not a fully Planned Economy (which itself is
known to become dysfunctional).
That said, there should
be little risk in the overall Industrial Strategy if properly
conceived.
This then appears a
retraction of responsibility for such a Strategy. If commercial
industrial strategists said this, they would not be in their
professional role for long].
“We have studied
previous attempts at Industrial Strategy, which have had successes as
well as failures. One lesson is that government cannot do this on
their own, instructing and planning, but listening or consulting”.
“So our partnership is with businesses, workers, universities and
colleges, local government and the devolved administrations where we
work together to achieve our goals”
[This is the ideology
of stakeholder participation, if not the necessity of consensus
building. Buut it also conveys the likewise reducted government
responsibility for the absolute eventual success of the pronounced
Industrial Strategy].
The Grand Challenges
(as previously depicted) recognise that it is “not just enough
to look at the economy we have. We must make preparations for the
economy we need to become”. Obviously true, hence (like other
notional AM and first phase EM nations) recognition of sweeping
global trends, and so government's role in prompting participation in
those trends.
Returning to the subtle
observation at the beginning of this weblog about enthno-centrism and
the power of that to serve Britain overseas, the central mantra of
the White Paper is 'Global Britain'.
“The decision to
leave the EU was not a decision to retreat from the world....if fact
we need to embrace it”.
[ie to embrace both the
EU and RoW; hence the present political Brexit tussle in Westminster;
and so the very critical nature of the Brexit talks with Brussels. To
be avidly either a 'Brexiteer' or 'Remainer' is extremely
short-sighted.
Given personal circumstances, people can be, and are,
led to various and specific attitudinal 'isms' so as to take sides in the
'democratic process'.
But better to (as with Brazil's Foreign Policy,
be open to all possibilities. Herein, at last, Britain (as a smaller
global force) appears to be seeking to carve out a new era of
Internationalism for itself, not based upon military or currency
might of the distant (yet regurgitated) past, but upon truly
reciprocal internationalist advancement, with both the RoW (BRICs,
MINTS, CIVETS) and the EU.
A very unlikely but
possible outcome that 'to save the rest of the EU' as a combined
singular entity is that it does 'turn its back' on the UK and USA, to
forge far stronger connections to Russia, Turkey, the CIS States and
China. To bolster trade by creating a Eurasian super-continent. With
expanded connections to Brazil and S.America (via Portugal and
German/Italian efforts – as seen in Brazil during the 1950s to
1970s). This through deliberately directed German leadership that the
other smaller and reliant nations would follow.
Highly unlikely that
the EU 'turns its back' on the UK, but not impossible].
To
continue...
“Preparing for Our
Future Trade Policy” necessitates the formation of new trade
relationships – presented as 'old friends and new allies'. The IMF
posits that over 80% of new growth will be outside of the EU, and so
new relations need to be put in place.
“Our Industrial
Strategy will be flexible to take account of developments in
negotiations between the UK and EU or changes in the global
economy”....so the Industrial Strategy will adapt.
[This generates the
idea that although there are specific fore-front sectors, the details
of an actual strategy are relatively scant.
Effectively left in the
hands of the Business Strategists of each industrial sector, and its
most powerful companies. This suggests that the business leaders of
each sector might - as pseudo global syndicate members – seek to
'slice-up the world' to suit their comparitive and planned commercial
capabilities to form 'non toe-stepping' growth plans. So as to obtain
descrete markets and avoid profit sapping over-competition – which
itself relies upon buying market share and ultimately become Value
Destructive for investors as scale and inevitable internal
inefficiencies grow faster than Marginal Profits].
Furthermore, as regards
Devolution, the Paper cites that micro-level data will be made
available to each National Assembly, so that they play a role in
identifying strengths and weaknesses in specific parts of the
country. A shared evidence base upon which to build the Industrial
Strategy.
[This again infers that
to date, little actual planning regards the forefront sectors has
taken place.
This assumption
supported by the words “we must have the right reporting
mechanism in place”
The
creation of the details of the Strategy will ultimately rely upon a
'bottom-up' feed in of analsysis data, as opposed to the wholly
'top-down' approach of Industrial Planning in the past].
The Economy and
Industrial Strategy Cabinet Committee chaired by the PM remains
responsible for “driving delivery across government. An
independent Industrial Strategy Council is to develop measures to
assess and evaluate our Industrial Strategy and make
recommendations”.
[That Council, formed
as of 01.11.2018, comprised of representatives from :
- The Bank of England
- National
Infrastructure Commission
- Public Policy think
tank
- Local Enterprise
Partnership
- Private Equity
- Alternative Asset
Management
- the CBI,
- the TUC
- Universities
(specialist in Sociological disciplines)
- the RSA. (Royal
Society for the Arts)
…....and companies
in:
- Finance
- Retail
- Engineering
- Advertising
- e-Commerce
Interestingly rather
than being wholly responsble for the formation and implementation of
Strategy, its role is that of recommending 'Success Measures' for
Implementation.
And 'Commenting on
Delivery of those Success Measures and their Contribution to the UK
Economy.
As stated....How to
Improve the Measurement of Success, the Better Use of Data Across
Government, the Effectiveness of Programme Evaluation, Publishing
Reports about Assessing Progress on Implementation Against Success
Measures and Ways to Improve Measurement and Evaluation.
The Industrial Strategy
Council then appears centred around Improvement and Success Rate
Reporting Procedures, convening 3 times a year to do so.
[NB Thus, from a
Private Equity perspective – the most sophisticated of Strategy
Analysts given the focus on ROI - beyond contributing to general
discussions regards hi-potential sectors, and getting a 'heads-up'
'on-paper' about what will be the better assisted new and incumbent
commercial sectors, Rupert Harrison of BlackRock will likely be
either seeking to steer the Commitee's activities to the more
investment productive sectors, and or, 'tearing his hair out' at the
apparent bureacracy involved.
Not quite the hands on
detailed Strategy Policy Formulation that Blackrock would hope for,
but at least part of the seemingly heavily beauracratic data
reporting mechanism that is meant to eventually steer such detailed
policy formulation.
This appears to not
bode well for any aspirant visionary UK industrialists in the grand
yesteryear Georgian and Victorian meld. But appears instead, the
conduit mechanism ultimately steered by reciprocal Production and
Research related FDI of increasingly wealthy EM Multi-National
corporations, to both serve as the Services Export Base of the UK
through its Research and Development activities, and utilising the UK
as itself an export market for increasingly 'Globally Converged'
products and services.
Nothing at all wrong in
this expectation – inherent to the Global Econony - but if that be
so, it should be far more clearly stated to highlight the critical
importance of EM nations to the UK economy.
The near bombastic
nature of some Brexiteers – seemingly seeking to regain yesteryear
colonial glories – is wholly misplaced. The tables of inherent
global power have obvioulsy turned, and so the prime message is that
of Internation Reciprocity, the antithesis of jingoistic bombast].
In Summary -
The Green and White
Papers sought the input of many (over 2000 organisations), and has
inevitably recognised the most obvious socio-economic trends; and so
seeks to leverage the country's 'Innovative Capital' in the form of
Money, Technology and Minds to do so; to create a new and evolved
'Industry 4.0' template.
But inevitably, from an
industrial practioners perspective (especially amongst SMEs), the
presentation of the White paper falls short. High on repeated
rhetoric, yet meagre on more supportive statistics and meaningful
examples of past innovation. (As shown some of the examples given are
disputable as having even originated in the UK).
The White Paper does
however – very importantly - highlight the historic 'British
Disease'.
Whereby the innovation
process itself was scuppered from long-term success for the nation,
given the manner in which innovative solutions would be sold-off soon
after incubation and proof of theory. The process of innovation
itself packaged by The City and Wall Street, so as to become a
marketable commodity. Innovation originators quickly morphing from
life-long scientists into highly tactically minded, personal
profit-hunting, business people. With either a lump sum upon
incubator company exit, or thereafter retained as a notional board
member or 'consultant'.
The presentation then
does highlight the financially motivated early-phase market reality
of UK innovation, long before any such innovation itself is marketed
to the B2B or B2C arenas under the auspices of a much larger (often
foreign) corporate entity that can more quickly scale-up and
trickle-down the innovation across its own product sector and
geographical market.
Ultimately, the White
Paper presentation was/is little more than recognition of obvious
global themes, illustrating the application of expanded bureaucracy –
possibly acting as the actual arbiter of innovation application and
so ultimately an individual company's success. Thus different in name
and process but ultimately akin to the Brazilian government model
using its own web-site as the Industry 4.0 funnel.
If so, this then – as
effective 'cherry-picker' - the very opposite of a nurturing but
pragmatic national innovation template. One that seeks to encompass
innovation routes on the merits of product and service betterment;
based upon the priniciples of objective rationality, the impact of
feasible technological advancement and true feasible market
opportunity.
There is – as ever –
a danger that ironically the bureaucrats responsible for running the
Industrial Strategy create internal operating mechanisms akin to a
bureaucratic junket in itself.
{NB this especially
ironic given the anti-EU Brussels 'gravy train' sentiment)
Heavy on trendy
initiative names, rationalised flow-chart processes (such as
eponymous 'evaluation') and check-box procedures.
Thus running the risk
of putting process over knowledge and pragmatic insights, since,
unless truly insightful experts regards each commercial sector,
likely to acquiesce to the various stakeholder's 'inputs' which drive
the hard choices of Strategy and Innovation.
[NB eg Previously
investment-auto-motives mentioned the apparent dichotemy between
Renewables and New Nuclear as regards the reality of real world
Climate and Environment impact. This just one of the types of
pragmatic choices and multi-option mixes, that must be made.
That is regards the
available technology choices of the 'here and now', so forecasting
and 'backing' various suites of Innovation becomes even more
theorectical, and so demands greater understanding and foresight. Not
to blindly select a technology or route, because it is the flavour of
the day, or positioned in the public's consciousness].
And so the possibly of
being unable to truly pragmatically assess the viability for eventual
success - when providing grants and loans – is a very real concern.
Hence the voices of
Industry and Investment should be given greater weighting over the
oft idealism of Academia, Quango or Public Stakeholders.
Industry and Investors
have 'skin in the game'.
Typically, objective
critical analaysis often arrives later down the Investment Road, when
private financing and private equity get on board.
But even then such
interests may only be short to medium term – themselves
understandably in the business of maturing and securing an exit - so
repeating the well recognised 'short-sighted' problems of the past.
That British Disease, of early exits and lost opportunities to
capitalise, will not magically dissappear, and the temptation may
grow even larger as the exit prices grow thanks to the endemic growth
of EM economied themslves. EM corporations will have biger an bigger
revenues and budgets by which to buy-in innovations.
And with ever greater
foreign corporate interests on an increasingly EM inclined world,
the PE firms et al will be sure to set out their own strategies to
market each of their small but 'rising star' portfolio companies.
There is no perfect
solution when creating a framework to boost national innovation,
since so much is about the capability to innovate itself – where
science meets creativity.
That sits within the
minds of innovators themselves, not in stakeholder meetings, process
charts, the tick-box bureacratic mentality, or the unrealistic
over-optimism of such middle-ranking state employees who believe the
rhetoric, yet have never been part of a creative industrial or
commercial process itself.
The White Paper is only
a broad ambition....much needs to be done to achieve that ambition.
Post Script...
It must be remembered
that Jaguar's XJ-based 'Limo-Green' project was itself assisted by
government funding; as had two decades earlier Rover Group's
development mule, a ,Petrol-Electric Hybrid Metro.
But it was the initial
'electric exploration' of Toyota with Prius, dependent upon Toyota's
nationalistic will to reduce reliance on imported petroleum
and the Kyoto Summit, that truly started Hybrid and EV innovation.
And whilst the Japanese government provided some finance, it was the
strength of the corporate balance sheet that paid the way for Prius.
Thereafter it was PSA's
and Renault's small volume series vans and cars that set the ball
rolling in Europe; PSA itself an Alliance partner with Toyota on the
small C1 / Aygo city car; itself ripe for eventual electrification.
Then Silicon Valley's
Private Equity and Wall Street's deep-pocketed 'front-runner' funding
of Tesla Motors.
With only really then –
once the threat of billions of dollars in backing and Tesla's success
on the stock-market, that prompted the remaining major auto-players
to react to changing trends with their own e-centric sub-branded
model variants.
Jaguar Land Rover's own
real-world Hybrid and All-Electric technical strategy – though
connected to 'Limo Green' and the C-X75 concept, was to become fully
realised in production cars such as initial E-Pace, and now
publicised I-Pace, came from the coupled drivers of TATA Motor's
backing, increasingly successful roll-out of conventional products
providing the income, and critically, the competitive challenge set
by others and the need to shift from pollutive diesels and into far
cleaner engines and powertrains.
But it was Germany's BMW that scaled-up production of a carbon-fibre body production process toward the lower end of mid-volume, that really shook-up the industry from a technical perspective. More efficient electric motors and improving 'rare earth' battery packs has been mated to steel and aluminium structures; but it was Germany's excellence in chemicals and materials science and production manufacturing that made perhaps the biggest leap in the 21st century. Added to that was the use of recycled materials (various wood and paper pulp) to provide additional eco-credentials. Much reduced mass and higher ecological content - together with the real-world necessity for small capacity ICE based 'range extenders - put BMW in the driving seat of 21st century cars, and it is the template that all will inevitably eventually follow.
But it was Germany's BMW that scaled-up production of a carbon-fibre body production process toward the lower end of mid-volume, that really shook-up the industry from a technical perspective. More efficient electric motors and improving 'rare earth' battery packs has been mated to steel and aluminium structures; but it was Germany's excellence in chemicals and materials science and production manufacturing that made perhaps the biggest leap in the 21st century. Added to that was the use of recycled materials (various wood and paper pulp) to provide additional eco-credentials. Much reduced mass and higher ecological content - together with the real-world necessity for small capacity ICE based 'range extenders - put BMW in the driving seat of 21st century cars, and it is the template that all will inevitably eventually follow.
Hence, Britain's Strategy
Council and the off-shoot New Institutions set under the auspices of
The Treasury, need to be sure to be truly informed and wholly 'au
fait', with what's happening both in the Innovations Laboratory, each
sector's Commercial Structure and Competitive Backdrop, the world of
High Finance and the plethora of B2B and B2C buyer mindsets.
[NB and an indepth
study into the real stories of historically successful and
historically failed innovations, would be immensely helpful guidance].
This requirement to
actually create the sound basis for Industrial Strategy - is a
'country mile' away from the recent and present focus upon Social
High Idealism of Process Success Measures.
The good efforts of the
Previous 'Industrial Catapult' Initiatives recognised – from a
virtual Scenario Planning start-point – where government assistance
would be most valuable. Industry leaders painted the picture.
More of the same please
- connected to an even bigger meaningful micro and macro pictures- so
as to depict a properly considered Visioneered Future.
Getting there requires:
less central and regional governmental PR spin, less civil-service
like process 'bureaucratisation' and a meaningful decison-making
framework derived from very broad real-world objectiveness and
rationality.
