The Government’s Industrial Strategy Council is tasked with providing impartial and expert evaluation of the government’s progress in delivering the aims of the Industrial Strategy. It is an independent advisory group led by Andy Haldane, the Chief Economist at the Bank of England, and comprised of leading men and women from business, academia and civil society.
It has launched two new reports on “Effective policy approaches to sectoral issues” which provide an overview of the key aspects of the UK’s sectoral composition, set out principles for successful design and implementation of sectoral policies, and comment on the UK’s current policy framework for sectoral intervention.
The key findings include:
- Appropriate targeted policy is needed to facilitate a smooth transition to a post-Covid-19 reality, but also to maintain the long-term competitiveness of the UK economy. However, large-scale sectoral interventions are inherently risky, and the government should approach them with care and rigorous prioritisation.
- Clearly defined policy objectives, sufficient scale and longevity are the key ingredients of a successful sectoral strategy. These three principles, supported by robust governance frameworks and adequate government capacity to implement, monitor and phase out the policy when needed, can help minimise the risks of and maximise returns from sectoral interventions.
- While the UK’s existing framework for implementing sectoral policy provides a strong foundation for future interventions, there are number of ways in which it could be improved. The reports point to the need for:
- Greater clarity regarding which sectors are to become the pillars of the UK’s long-term economic strategy.
- Review and realignment of Sector Deals.
- Closer integration of Grand Challenges and Sector Deals.
- The complexity of the UK economy needs to be reflected in policy. Governments need in-depth knowledge of individual industries and good working relationships with its representatives in order to tailor interventions to the specific needs of targeted industries.
- Designing high quality service-sector interventions will become increasingly important in future. Services matter and require policy attention due to their sheer scale, their often-lagging productivity, and the difficulties they face in the aftermath of the Covid-19 outbreak. But they are also crucial because of their increasing importance to the manufacturing industry, their growing export potential, and the significant non-quantifiable benefits they provide (e.g. care sector’s role in wellbeing, or creative industries’ role in UK’s international soft power).
The Policy Paper can be downloaded from https://protect-eu.mimecast.com/s/-_RMCJ8AmtpwjVuOPSef?domain=industrialstrategycouncil.org and the Evidence Review Paper is available at https://protect-eu.mimecast.com/s/M6hACK8Bnt8WR6hoL0sk?domain=industrialstrategycouncil.org.