Business Secretary Greg Clark has launched the government’s Industrial Strategy, setting out a long-term vision for how they believe Britain can build on its economic strengths, address its productivity performance, embrace technological change and boost the earning power of people across the UK.
With the aim of making the UK “the world’s most innovative nation by 2030”, the government has committed to investing a further £725 million over the next 3 years in the Industrial Strategy Challenge Fund (ISCF) to respond to some of the greatest global challenges and the opportunities faced by the UK.
This will include £170 million to transform the construction sector and help create affordable places to live and work that are safer, healthier and use less energy, and up to £210 million to improve early diagnosis of illnesses and develop precision medicine for patients across the UK.
The government has previously committed £1 billion to the first wave of Industrial Strategy Challenge Fund projects, including investing £246 million in next generation battery technology and £86 million in robotics hubs across the UK.
Last week the Prime Minister announced an ambition to increase the level of investment in research and development (R&D), rising from 1.7% to 2.4% of GDP by 2027. This could mean around £80 billion of additional investment in advanced technology in the next decade, helping to transform whole sectors, create new industries, and support innovation across the country.
The white paper also confirms government will be pressing ahead with a series of Sector Deals, with construction, life sciences, automotive and AI the first to benefit from these new strategic and long-term partnerships with government, backed by private sector co-investment.
Ahead of the signing of the Life Sciences Sector Deal, due in the next few weeks, the government has confirmed today that world-leading life sciences company MSD is set to make a major investment into the UK economy with the opening of a new state-of-the-art UK hub, helping ensure innovative research into future treatments for patients and pioneering medicines are completed in Britain.
Prime Minister Theresa May said: “Our modern Industrial Strategy will shape a stronger and fairer economy for decades to come. It will help create the conditions where successful businesses can emerge and grow, and support these businesses in seizing the big opportunities of our time, such as artificial intelligence and big data, whilst also making sure our young people have the skills to take on the high-paid, high-skilled jobs this creates.
“As we leave the European Union and forge a new path for ourselves, we need to focus on building a better future for our country and all the people who live in it. With the Budget last week, and our Industrial Strategy in the years ahead, we will build a Britain fit for the future.”
In the strategy, the government has identified 4 Grand Challenges; global trends that will shape our rapidly changing future and which the UK must embrace to ensure we harness all the opportunities they bring. These are artificial intelligence, clean growth, ageing society, and the future of mobility.
Business Secretary Greg 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.
“The Industrial Strategy is an unashamedly ambitious vision for the future of our country, laying out how we tackle our productivity challenge, earn our way in the future, and improve living standards across the country.”
Around the themes of ideas, people, infrastructure, business environment and places, the Government hopes to raise total R&D investment to 2.4% of GDP by 2027, increase the rate of R&D tax credit to 12%, and invest £725 million in new Industrial Strategy Challenge Fund programmes to capture the value of innovation.
Goals include establishing a technical education system that rivals the best in the world, investing an additional £406 million in maths, digital and technical education; increasing the National Productivity Investment Fund to £31 billion, supporting investments in transport, housing and digital infrastructure; Sector Deals in life sciences, construction, artificial intelligence and the automotive sector; agreeing local industrial strategies that build on local strengths and deliver on economic opportunities; and creating a new transforming cities fund that will provide £1.7 billion for intra-city transport.
An Independent Industrial Strategy Council will be launched in 2018 to make recommendations to government on how it measures success.
Lord Adonis, Chairman of the National Infrastructure Commission, said: “A key part of securing long-term economic growth and increased productivity will be to invest in our infrastructure network – so I welcome that today’s Industrial Strategy has this at its heart.”