An Industrial Strategy that really works for everyone?

Posted on Jan 27th, 2017 | Expertise

This week began with both the Prime Minister Theresa May and the Secretary of State for Business, Energy and Industrial Strategy Greg Clark on the airwaves launching their Industrial Strategy ‘green paper’. Essentially it is an official draft of a strategy which they are putting out to extensive consultation before action is taken.

As I recently said on BBC Sunday Politics, I think it’s hugely positive that this type of strategy is gaining such a high profile and will be subject to such extensive consultation. The nature of work, manufacturing, learning and much more are radically changing, so it’s good to have a broad review of how our country addresses future ambitions in changing circumstances.

However all too often such strategies get tempted into a focus on ‘big box’ items such as new factories and grandiose ambitions for sectors like ‘aeronautics’. Such approaches are often at the expense of small firms. Yet there’s no shame in running a successful small business and keeping it that way; such firms are valuable parts of our economy.

So I’ve reviewed the draft strategy with a weather eye to what it proposes for the self-employed and small businesses. To my mind there is little controversial in the green paper which is constructed around 10 ‘pillars’ supporting its approach:

  1. Investing in science, research and innovation
  2. Developing skills
  3. Upgrading infrastructure
  4. Supporting businesses to start and grow
  5. Improving procurement
  6. Encouraging trade and inward investment
  7. Delivering affordable energy and clean growth
  8. Cultivating world-leading sectors
  9. Driving growth across the whole country
  10. Creating the right institutions to bring together sectors and places

 

Each of these is welcome and important, and represents a significant heap of work for civil servants to deliver in the coming years.

But a note of concern is that self-employment doesn’t get a single mention in the paper. Small businesses get more mentions but mostly in relation to helping them to ‘scale up’ which has long been an obsession of governments. As we know from research by the RSA, there are many different motivations and ambitions driving small business owners. So while those seeking high growth should be supported, as the strategy sets out, there should also be meaningful recognition and support for those who don’t wish to follow the ‘scale up’ approach.

Helping small businesses and the self-employed to be successful and productive without having to ‘scale up’ would still deliver positive results for the UK economy. We need to move away from the idea that every new business created should aim to be the next Google for it to have value. Many people explicitly choose self-employment for a better work-life balance, to focus on what they enjoy most or simply to have more flexibility so they can care for loved ones.

We will soon be publishing the findings of our research project with the RSA with recommendations on how to shift government policy to be more supportive of the self-employed and small businesses. We will feed this work straight into the Industrial Strategy consultation, as well as to other relevant departments including the Treasury.

In the meantime, you can respond to the draft Industrial Strategy on the Government’s micro-site, let them know what you think.

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Written by Jason Kitcat

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