Published
The Association’s Executive Director Andy Murray takes a close look at the UK Government’s recently published green paper ‘Invest 2035: Industrial Strategy’.
The UK Government’s green paper Invest 2035: Industrial Strategy provides a glimpse of the long-term economic vision that a new industrial strategy (expected in Spring 2025) is likely to be based on – namely, prioritising growth sectors, the need for a stable policy environment to attract private sector investment, and collaboration between business and Whitehall, regions and local authorities as well as across sectors and educational institutions.
The green paper signals some changes from the previous industrial strategy of 2017, released by the May government. Context is key to understanding the drivers – the previous industrial strategy was sandwiched between the Brexit referendum and the eventual departure from the EU in 2020 and set to offer some reassurances of ‘business as usual’. It had a somewhat short-term opportunistic focus given the unexpected turn of events that led to the May government being formed. The new one, under a new regime that was afforded time to plan and prepare for Government, will be one of the first strategies to be published and seeks to set out a foundation for other policies. Unsurprisingly it has a more long-term focus, but it also hints that this needs to be hand-in-hand with underpinning resilience and economic security. Again, reflecting the context – a fractious geopolitical environment, pandemic legacies, a period of high inflation, the opportunities/disruption from AI, accelerating climate change and a fiscal squeeze.
The Invest 2035 strategy focuses on eight key sectors: Advanced Manufacturing, Clean Energy, Creative Industries, Defence, Digital and Technologies, Financial Services, Life Sciences, and Professional and Business Services. While clean energy and advanced manufacturing remain central, this green paper places even more weight on digital transformation and emerging technologies. The expansion into creative industries and professional services signals a broader view of what drives economic growth.
The 2017 industrial strategy was built on the “levelling up” agenda of the Johnson government and Osborne’s Northern Powerhouse of the Cameron government. The tagline has gone, but the green paper emphasises the need to invest in specific city regions and industrial clusters. It also floats the idea of regional growth hubs and sector-specific plans.
While the 2017 industrial strategy introduced the idea of “clean growth” as a Grand Challenge, the green paper places Net Zero front and centre. The 2025 strategy is likely to be much more aggressive in its commitment to decarbonization, aiming for clean power by 2030 and pushing harder for green technology adoption. As set out in our COP26 Net Zero position paper, addressing climate change a cross-cutting issue which requires a multi-departmental approach. It will be interesting to see how the Missions Based approach to government is reflected in the 2025 Industrial Strategy.
In tune with our recent Annual Conference, The answer is AI, now what’s the question?, the green paper recognises the importance of Data and AI. It highlights the huge opportunity for the UK to use its data more strategically, driving innovation and economic growth (including in the growth-driving sectors). The green paper cites the ongoing work of the AI Opportunities Action Plan, led by Matt Clifford, the technology entrepreneur, to grow the AI sector and drive responsible adoption across the economy. We heard at our annual conference the work underway to adopt AI and Data Analytics for government project delivery – based on a joint paper between MPA, APM and IPA.
As mentioned earlier, there’s a recognition that constant policy changes have been a barrier to business investment. Hopefully, the industrial strategy that emerges from the Invest 2035 green paper creates the stable, long-term policy environment for major projects that many of our members have been calling for (as highlighted in our recent perspectives report on Cancelled Projects and our seminar on innovative ways to finance major infrastructure projects). Interestingly, the green paper outlines the creation of a statutory Industrial Strategy Council to oversee its implementation. Hopefully the new British Infrastructure Taskforce which was launched a few days before the green paper will also have input to the industrial strategy. With the recent announcement regarding the establishment of the National Infrastructure and Transformation Authority, to be operational by Spring 2025, there’s a lot of change in play in this area already.
The 66-page green paper includes 35 questions in relation to the challenges, opportunities and priorities it explores. The Government is seeking feedback.
For more information, the green paper is on the .gov.uk website at https://www.gov.uk/government/consultations/invest-2035-the-uks-modern-industrial-strategy/invest-2035-the-uks-modern-industrial-strategy.
Enquiries regarding the green paper should be sent to enquiries@businessandtrade.gov.uk.