In a speech in Birmingham on Monday, Greg Clark provided some more detail on his vision for the Government’s industrial strategy. The speech was widely trailed beforehand, with the focus being on the launch of a new competition called the Faraday Challenge (named after the nineteenth century scientist Michael Faraday) to encourage innovation with battery technology, and the creation of a smart electricity grid to manage demand.
However, aside from these announcements – and the news that the West Midlands is in negotiations for a second devolution deal – three other main observations stood out from the speech:
Firstly, the Government is right to focus on innovation, which is ultimately what drives productivity growth and improvements in living standards. It is also right that overarching policies on innovation, such as the creation of a challenge fund or the location of a new institute – should be run by national government rather than by local government.
But place will nonetheless be very important in this. In creating a new institute such as the National Battery Manufacturing Development facility, the Government will have to make a choice as to where to locate it. Does it follow established research and development excellence, and put such an institute near to the expertise at the University of Warwick, or in the ‘Golden Triangle’ between London, Oxford and Cambridge? Or does it accept the trade-off between this rationale and the political and economic imperative to encourage growth in less successful places, by establishing the institute in another part of the country which doesn’t currently have as desirable conditions for it to flourish?
Secondly, while Clark’s specific focus on batteries was understandable in offering a tangible idea for what the industrial strategy will do, Government support for innovation mustn’t be limited to specific technologies, in the same way that it should avoid picking specific sectors. Successful innovations occur by bringing together people from a number of different walks of life, such as creatives, engineers, funders and lawyers. Again ‘place’ plays a role here, as it is cities which provide a platform for this to happen, which is one of the reasons why dense urban areas tend to be more innovative.
Thirdly, while the previous observations underline the importance of ‘place’ in a successful industrial strategy – and while Clark identified this as one of the five foundations of the strategy – we still have little detail as to what this would actually look like. The only extra bit of detail given today was the intention to create local industrial strategies in line with a national one, affirming a commitment in the Conservative manifesto.
To be successful, an industrial strategy needs to take very different approaches to different parts of the country, making distinctions between cities and non-urban areas, and between successful and struggling cities. While the Government continues to develop its thinking about the role of place, you can see our ideas on this issue in our briefing Why don’t we see growth up and down the country? We’ll also be supplementing this in the coming weeks on a range of briefings looking at topics such as clusters and public sector relocations.