PwC welcomes the UK government’s recent initiative to develop a broad-based long term industrial strategy to underpin business growth and enhance productivity performance.
This is a timely initiative. Facing the potential challenges of Brexit, UK businesses need a consistent policy framework to support investment and guide key decisions over the years ahead.
Figure: Sluggish productivity growth since the financial crisis
The UK government is right to focus on a “horizontal approach” to industrial strategy, which does not seek to favour individual sectors or businesses. The objective should be to create the best conditions for businesses of all types and across all sectors to contribute to national economic growth.
Four main themes should underpin the government’s industrial strategy: developing skills and education; upgrading national infrastructure; supporting investment, innovation and business growth; and ensuring a more regionally balanced economy. This paper sets out recommendations on a wide range of specific policies and themes in all of these areas, with supporting analysis.
The policies needed to implement a successful industrial strategy are not just the responsibility of one or even a few government departments. They cut across all areas of government policy. The tax system – which shapes the competitiveness of the economy in so many ways and affects business of all sizes – should play a key role.
A successful industrial strategy needs to be based on a consistent long-term approach to policy. But it also needs to be focussed on delivery. The outcomes from key policies need to be delivered efficiently and effectively so that economic benefits are realised in a timely fashion.
This response to the UK government's consultation paper “Building our Industrial Strategy” is informed by the wide array of research that PwC carried out for its clients on the key themes underpinning a broad-based industrial strategy. It has been prepared with input from a wide range of subject matter experts within the firm, including economics, skills and education, infrastructure, the digital economy, trade and investment, tax policy, energy, climate change and regional economic development.