Archive: January, 2017

Building our industrial strategy

Theresa May announced her industrial strategy last week. The green paper is called  Building our industrial strategy is a response to Brexit that “will help to deliver a stronger economy and a fairer society”. We have already seen signs of the government encouraging development and growth through the approval last year of £18bn for Hinkley Point C and the more recent approval of £31bn for the manufacture of four replacement submarines for Trident.

Governments have a mixed record on industrial strategies. Success of Japanese colonies such as South Korea have been attributed to the centralised state development that it had used to develop itself. Many of these domestic policy choices, however, are now seen as detrimental to free trade and are limited by various international agreements such as WTO, TRIM and TRIPS.

The government’s strategy is built around 10 pillars and suggests a greater willingness to use public money for investment in infrastructure, research and development alongside a commitment to regional development through devolution of powers to city authorities. It also includes that perennial problem child of public sector procurement which the strategy will ensure “drives innovative new products and services, strengthen skills, develops UK supply chains and increases competition by creating more opportunities for SMEs”.

So what does this mean for procurement in UK?

Like Brexit (see my blog last month called 2016 and Brexit), the effects of the industrial strategy will be mixed. It may help sectors where Britain already does well, such as the creative industries and life sciences, and align with others that everyone believes will be big in the future like  low-emission vehicles and robotics.

Brexit will be used to relax the much-disliked public sector procurement rules and the strategy will further encourage a more commercial approach.

But, alas, most procurement professional in the private sector will not be touched by the industrial strategy and will have to manage the effects of Brexit without government support.