Is Brexit or Industrial Strategy the defining moment for UK prosperity?

With a new government team in place Brexit remains the defining issue in UK politics. But it shouldn’t be, as there are tectonic shifts taking place in global trade, technology and society meaning we need to hear much more about how our country will address these challenges.

Very importantly we need to understand how post Brexit and with all these shifts our economy can create significantly more prosperity.  This must be felt equally by people up and down the country and visibly supported by better infrastructure and public services.

The way to address these challenges is to create a better-balanced, more productive and wealth creating economy that can afford our country this path.  Finding a way through Brexit and above all avoiding a No-Deal outcome would go some way to restoring business confidence and unlocking investment, but it is not enough.

We need to turbo-charge our Industrial Strategy and take steps to unlock business investment. It must focus on creating societal value, creating new high wage and highly skilled jobs and the training for these new jobs. To achieve this there should be an increased focus on the ‘frontier economy’ – those sectors that are research and innovation intensive, have the highest export potential and are at the frontier of high productivity.

One massive opportunity for growing our frontier economy lies behind our necessary ambition to become net carbon neutral.; Indeed, the UK’s climate change policies have encouraged investment in renewable energy, creating 1000’s of jobs in the North East of England’s off-shore wind industry.  Because of this innovation has been created locally, drastically reducing the costs of this technology.

The success has been to make an economic virtue out of policy necessity. The city of Hull is visibly prospering as a result.

So, the opportunity to create even greater economic value through our necessary climate change goals are enormous and the economic upside that can be created through technology leadership in areas like energy storage and eMobility must be viewed very strategically – and not left to market forces alone.

Beyond these green growth opportunities, a digital 4th industrial revolution is taking place through advanced robotics, artificial intelligence, 3D printing and the internet of things. This will be disruptive for sure and it has the potential to create another new high tech frontier economy with many more highly paid jobs – but only if we get it right. The problem is that the UK has been slow to adopt these technologies especially when compared to competitors overseas.

We missed out on the third industrial revolution in the 1980s, exacerbating socio-economic division as old industries died out – never to be replaced – especially in our northern regions.  We run the risk of making the same mistake again so it’s possible we will displace more jobs than we create, and our northern regions would once again take the main brunt of this.

So, the prize is large to get this right – politically and economically – and to master it, we need a well-honed strategic plan. Creating maximum prosperity from the twin challenges of digitalisation and carbon neutrality can only be achieved if policy makers and business come together with a positive vision for the future and create an partnership and Industrial Strategy to match. It can’t be about lots of random investment announcements aimed at providing a short-term Brexit feel-good factor.

We need to look way beyond Brexit and create a lasting Industrial Strategy that creates true prosperity for our entire country. I will explore more of how to achieve that in part two of this blog in couple of weeks!