Amid the hurricanes of Donald Trump’s inauguration and Brexit’s advent, a sapling of policy dares to break from the soil. The British government yesterday launched its industrial strategy green paper — no less significant, in its way, than Theresa May’s speech last week on leaving the European Union.
If you can tear yourself away from the satsuma-haired president and plucky Britain’s escape from the tyranny of Brussels, do take a look. In Davos last Thursday, the prime minister declared that: “the term ‘industrial strategy’ has fallen into something approaching disrepute in recent years, but I believe such a strategy — that addresses the long-standing and structural weaknesses in our economy — is essential if we are to promote the benefits of free markets and free trade as we wish... We can’t leave all this to international market forces alone, or just rely on an increase in overall prosperity... we have to step up and take control — to ensure free trade and globalisation work for everyone.”
Everyone? Whether or not those “left behind” were decisive in the vote for Brexit or in Trump’s victory, it is beyond doubt that pessimism about pulverising change loomed over both. In the 21st century, an industrial strategy must amount to much more than cherry-picking, well-meaning speeches about “skills” and arguments about subsidy. It needs to be underpinned by a philosophy of modern human behaviour and a fearless assessment of work and its future.
To this task, Greg Clark, the secretary of state for business, energy and industrial strategy, brings one of the cabinet’s sharpest intellects, as well as the calm manner of a surgeon with good news. His green paper — a consultative document, remember — will be governed by three core objectives.
First, Clark will seek to protect Britain’s sectoral strengths, not in the spirit of complacency but the opposite. The country cannot afford to surrender its advantage in, say, the automotive industry, financial services, or the creative world. So adaptation to a transformed global context is necessary, if not sufficient, for future prosperity.
Second, as Philip Hammond made clear in his autumn statement, this government regards the improvement of productivity as its fundamental economic challenge. In this regard, Clark has been much influenced by the speeches of Andy Haldane, chief economist at the Bank of England, who has addressed himself to the significant impact that targeted action can make upon the efficiency of production. Intriguingly, ministers have also been examining the achievements of sports technology, and the extent to which (for instance) tiny changes in technique, uniform and engineering in cycling have yielded Olympic golds.
Third, the green paper will set itself against the power of incumbents: the vested interests of industry that seek to rig the rules against new entrants and disruptive forces. In the digital era, it may seem a statement of the obvious that any legislative framework should encourage challengers and innovation. But this is to underestimate the magnetic power of the status quo in all policymaking.
Enhancement of technical education
All of this — if it is to mean anything — means a radical enhancement of technical education. In the past, industrial policy has tended to favour research and development in universities, and higher education generally. To a shameful extent, further education is now the poor relation of the system. The capacity of most schools to prepare their pupils for the labour market of the future remains woeful.
Yes, investment has its part to play. But so does institutional ethos. No less important than basic literacy and numeracy is a collective awareness that today’s children will be working in an environment that reflects not just a generational shift but a relentless technological revolution. Twenty years from now, Uber and Amazon Prime will be regarded as the primitive tools of clumsy beginners.
This green paper will only yield more than generalities if it translates into hard, localised, bespoke measures
Less predictable is the importance that Clark (again, influenced by Haldane) assigns to place, and the uneven regional distribution of growth. The strategies envisaged in the green paper depend on a recognition that, for complex reasons, successful industries tend to cluster in specific locations — and that government can smooth the path to such geographical concentration. Essential to this is the promise of meaningful devolution — a promise that has echoed through Whitehall for decades, never to be kept. Will May, Hammond and Clark be different? This green paper will only yield more than well-intentioned generalities if it translates into hard, localised, bespoke measures.
For a minister to declare himself or herself in favour of “upskilling” is little short of banality. Who would ever say the opposite? What counts are the specific projects that this strategy yields for specific industries, specific locations and specific people. It will be local or nothing.
The setting could hardly be more challenging. Automation represents an incomparably greater challenge to social cohesion than population mobility. In their book Only Humans Need Apply, Thomas H. Davenport and Julia Kirby describe “an augmentation agenda” in which humans learn to work alongside smart machines. The writers Martin Ford and Yuval Noah Harari take a much gloomier view of a future governed by robotic and algorithmic work, in which white-collar jobs are no less imperilled than the blue-collar workforce. Whichever assessment is correct, this — much more than migration — is what modern governments should be worrying about.
Add to such anxieties the economic uncertainty spawned by Brexit and you will grasp the turbulent cross-winds into which this strategy is being launched. But it is to the government’s credit that it is trying. Unlike Trump, May and Clark believe in the open society rather than the closed version of “America first”. This, at heart, is what the green paper is all about. When she meets the president, the prime minister could do a lot worse than to hand him a copy.
— Guardian News & Media Ltd
Matthew d’Ancona writes a weekly column for the Guardian. He was previously editor of the Spectator and also writes for the Evening Standard and GQ. He was the Sunday Telegraph’s political columnist for 19 years.
