Industrial Strategy: May government needs to match it's words with public investment if it wants to unlock missions potential

When Theresa May took over the leadership of the Conservative Party, she heralded a change of approach. There has been a lot of talk of government being willing to get more involved - on May's part, expressed in her insistence on restoring the Unionist part of the party's legacy, including invoking Joseph Chamberlain and a more activist government.

The issuing of an industrial strategy was seen as a statement of intent - an act of intervention that broke with the pro-business, laissez faire brand of 'liberal conservatism' of her predecessors David Cameron and George Osborne.

However, follow through has been limited. So too has money. Once published, the government's strategy looked less about shaping markets and supporting innovators, and more about propping up Britain's failing industries with deals and deregulation.

Theresa May's latest step was to reference the UCL Institute for Innovation and Public Purpose (IPPR), who along with it's director Mariana Mazzucato have been pressing hard for a reshaping of how we understand the role of government in innovation. But her warm words toward the potential of strategic missions will mean nothing without the funding to match.

Mazzucato's work has argued, the state can be the risk taking pioneer - a role expected of the private sector, but which it is never willing to fulfil. By funding R&D, by offering long term, stable public investment, government can open up and shape entirely new markets.

But it can't do this without money - at either end. Projects need investment and support to be there from the start and need the private sector not be able to simply walk away with unlimited potential earnings at the end, with no restitution for the public role. Big ideas should fund new big ideas.

Theresa May's government, however, has yet to be willing to match big words with big funding. Today's speech was no different. There was a lot of praise for public institutions that engage in research, but little mention for how they have been strangled of funding.

May set out her four missions - within four 'grand challenges' facing Britain taken from the Industrial Strategy - and praised the potential of missions to drive innovation forward. But that was the extent of it.

Both the IPPR and the thinktank OECD have argued that increased public investment, and the infrastructure to implement it like a National Investment Bank, is a golden opportunity that the UK is not taking advantage of - despite Britain investing well below 3% of GDP.

Without funding, potential will remain unexplored. Mission statements represent step one in a coordinated approach. The Prime Minister herself acknowledged that progress is born from collaboration and cooperation. There needs to be a lot more of it, and something more: coordination.

Theresa May is committing to the big visions/big speeches aspect of the call for strategic thinking. Will the government wake up and start to put in place the rest of the infrastructure needed to maximise the potential that can be unlocked by long term strategic thinking?

References

Rowena Mason & Peter Walker's 'Theresa May’s industrial plan signals shift to more state intervention: Prime minister’s offer of support to five key sectors will exploit post-Brexit lifting of EU state aid rules'; in The Guardian; 22 January 2017.

Paul Sandle's 'UK Government's industrial strategy launched to tackle weak productivity during Brexit talks: Theresa May is looking to intervene in four sectors in a bid to improve productivity'; in The Independent; 27 November 2017.

'Budget 2017: Cautious Hammond has salves not solutions, as Budget falls short of action'; in The Alternative; 22 November 2017.

Ben Chu's 'Government needs to spend additional £20bn on infrastructure each year, says think tank: Increasing investment spending by £20bn by 2021-22 would lift UK government investment as a share of GDP, still only roughly level to the OECD average'; in The Independent; 14 November 2017.

'"There is huge potential in the missions based strategy" @theresa_may @10DowningStreet cites @IIPP_UCL Commission on Mission Oriented Innovation & Industrial Strategy (MOIIS) https://www.ucl.ac.uk/bartlett/public-purpose/moiis … @BartlettUCL @uclnews @DavidPriceUCL'; from UCL Institute for Innovation and Public Purpose, on Twitter; 21 May 2018.

'PM @theresa_may has set out the first four missions of our Modern Industrial Strategy. The first of these will use artificial intelligence and innovation to transform the prevention, early diagnosis and treatment of diseases. #IndustrialStrategy'; from the UK Prime Minister, on Twitter [thread]; 21 May 2018.

Mariana Mazzucato's 'Government - investor, risk-taker, innovator'; from TED; June 2013.