The starting point for an industrial strategy
The British government is under attack for not having an industrial strategy. Every country should have an industrial strategy. Industry is the vital base of a country's prosperity as it provides the income and taxes for a nation’s welfare.
So how do you build a strategy? What is the starting point? The starting point is deciding on the advantage that you believe will enable you to compete in the world. This is where it gets difficult because that advantage should be crisp, clear and justifiable. It would be no good the UK government building a strategy on "quality" as its near neighbour, Germany, has a clear and obvious advantage in this regard. Rejecting "quality" as the kernel of the strategy does not mean that the UK would accept a shoddy goods alternative. It simply means that the cornerstone of the strategy has to be something else for otherwise the UK would simply be seen as an also-ran next to Germany.
This rejection of a worthy centrepiece for the strategy is what creates difficulties. Could the UK choose "efficiency" or "competitiveness" as its cornerstone? Almost certainly it could not. Other countries could knock the UK into a cocked hat on these critical attributes.
Whatever strategic intent is chosen for the UK is unlikely to be unique. It would be an impossible dream to find some industrial goal that the UK can do better than any other country in the world. Realism has to drive the strategy. The chosen goal for the strategy must be something that the UK can do that other countries can also do but for the UK it is its differential advantage. A differential advantage is one that may not be the best in the world but it is something on which the country truly excels and is sufficiently different and desirable to make it viable.
In seeking this focus for the strategy it is worth considering the past and the present. The UK could argue that from the time of the industrial revolution it has been a leader with a myriad of successful inventions. Today it punches above its weight as the favoured location for the headquarters of top research and development companies. It can claim huge success in its universities with a worldwide renown for teaching and spin-offs ranging from graphene to vaccines. It is a nation known for a revolution in financial services as well as advanced jet engines. “Innovation” could be a chosen focus for the U.K.'s industrial strategy.
Arriving at an identity around which the strategy can be developed is the most important and difficult part of an industrial plan. From here on it is about making sure that everything is built around this differential advantage. Innovative companies should be encouraged to come to the UK with tax advantages, links to universities, pools of knowledge, and an infrastructure that supports them. A successful strategy would mean that the initial advantage would be added to and confirmed over time. Success would be the mother of more success.
What I am suggesting isn't new. Just over 50 years ago Harold Wilson, the prime minister at the time, opened the debate at the Labour Party conference in Scarborough by arguing that Britain should focus on science. He encapsulated his ideas with the phrase "white heat of technology" which he believed could be building block for scientific revolution in the UK. His strategy was as right then as it is for today. Where Wilson failed was in its execution. Like a lot of political initiatives, it lasted only as long as the Labour party’s political tenure so it wasn't followed through with the religious fervour that is necessary for a strategy to work. With the right mind and devotion it could still work today.