Government 'science and tech superpower' plans will fail without wide-ranging industrial strategy, warns CIPD

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Experts call for a more comprehensive approach that raises productivity in ‘everyday economy’ sectors too

of Lucie Mitchell 12 July 2023

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The government’s plan to transform the UK into a “science and technology superpower” will fail to boost economic growth and improve living standards unless it is linked to a “bolder and broader” industrial strategy, the CIPD has warned.

In its new discussion paper, An industrial strategy for the everyday economy , the CIPD concluded that a clear and comprehensive approach is required to increase productivity across all sectors of the UK economy.

Peter Cheese, chief executive of the CIPD, said the UK was at a “critical crossroads”, and a “broader approach to economic growth and a revitalised industrial strategy” was urgently needed to address challenges such as skills shortages, stalled productivity and weak business investment in skills and technology. “Unless policymakers can encourage and enable many more firms across all sectors to invest more in technology, management capability and workforce skills development, it’s hard to see how overall UK productivity and, therefore, living standards can improve sustainably,” added Cheese.

Karis Burton, head of corporate development at Henley Business School, warned that the government’s focus on creating a science and technology superpower could “widen the gaps for people development and skills shortages unless the strategic activity of workforce planning and capability building is addressed”.

“We see a disparity of practice when it comes to capability building across many sectors that we operate in,” added Burton. “Sectors operate in a complex environment often relying heavily on other sectors as part of their own supply chain. Strength in one sector [can] risk placing increased demands on infrastructure that simply cannot cope. If the government can help drive the workforce planning agenda with industry, across sectors, the foundations for net new growth could be better supported to drive economic stability.”

Meanwhile, the Institute of Directors (IoD) has called for an industrial strategy based on innovation. In its latest survey of IoD members, 88 per cent backed the development of a meaningful industrial strategy aimed at identifying specific long-term priorities for the UK economy.

Roger Barker, director of policy at the IoD, said the government’s recent priority had been in “laying the groundwork for the return of economic growth”, yet this was not enough to “sustain the competitiveness of UK business”.

“Business leaders clearly see the value of a longer-term policy framework that places innovation at its core, and which enables innovations to be commercially exploited in the UK,” he added.

Kirk Chang, director at the Centre of Innovation, Management and Enterprise at the University of East London, said the government’s plans to become a science and technology superpower may sound “ambitious and infeasible” in the current climate, but they were essential for the UK economy. “If ever there was a time for the government, business communities, professional bodies and higher education to work together, it is now – the era of digitalisation,” he said.

Yet, according to the CIPD paper, the government’s plans risk limiting support to only a small number of sectors and firms, as its focus is on boosting investment in research and development, as well as high-tech and green growth sectors.

As such, ‘everyday economy’ sectors, including retail and hospitality, would be overlooked, the HR body cautioned.

Taking an incremental, bottom-up approach to innovation could boost productivity and performance across much larger parts of the economy, the CIPD added. “We need changes to a range of linked policy areas including skills, innovation, investment in digital technologies, green transition, business support and labour market enforcement, which collectively affect the business environment and firms’ management capability and investment behaviour,” said Cheese.

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Experts call for a more comprehensive approach that raises productivity in ‘everyday economy’ sectors too. of Lucie Mitchell 12 July 2023. Share article on Twitter. Share article on Facebook. Share article on LinkedIn. The government’s plan to transform the UK into a “science and technology superpower” will fail to boost economic growth and improve living standards unless it is linked to a “bolder and broader” industrial strategy, the CIPD has warned. In its new discussion paper, An industrial strategy for the everyday economy , the CIPD concluded that a clear and comprehensive approach is required to increase productivity across all sectors of the UK economy. Peter Cheese, chief executive of the CIPD, said the UK was at a “critical crossroads”, and a “broader approach to economic growth and a revitalised industrial strategy” was urgently needed to address challenges such as skills shortages, stalled productivity and weak business investment in skills and technology. “Unless policymakers can encourage and enable many more firms across all sectors to invest more in technology, management capability and workforce skills development, it’s hard to see how overall UK productivity and, therefore, living standards can improve sustainably,” added Cheese. Karis Burton, head of corporate development at Henley Business School, warned that the government’s focus on creating a science and technology superpower could “widen the gaps for people development and skills shortages unless the strategic activity of workforce planning and capability building is addressed”. “We see a disparity of practice when it comes to capability building across many sectors that we operate in,” added Burton. “Sectors operate in a complex environment often relying heavily on other sectors as part of their own supply chain. Strength in one sector [can] risk placing increased demands on infrastructure that simply cannot cope. If the government can help drive the workforce planning agenda with industry, across sectors, the foundations for net new growth could be better supported to drive economic stability.” Meanwhile, the Institute of Directors (IoD) has called for an industrial strategy based on innovation. In its latest survey of IoD members, 88 per cent backed the development of a meaningful industrial strategy aimed at identifying specific long-term priorities for the UK economy. Roger Barker, director of policy at the IoD, said the government’s recent priority had been in “laying the groundwork for the return of economic growth”, yet this was not enough to “sustain the competitiveness of UK business”. “Business leaders clearly see the value of a longer-term policy framework that places innovation at its core, and which enables innovations to be commercially exploited in the UK,” he added. Kirk Chang, director at the Centre of Innovation, Management and Enterprise at the University of East London, said the government’s plans to become a science and technology superpower may sound “ambitious and infeasible” in the current climate, but they were essential for the UK economy. “If ever there was a time for the government, business communities, professional bodies and higher education to work together, it is now – the era of digitalisation,” he said. Yet, according to the CIPD paper, the government’s plans risk limiting support to only a small number of sectors and firms, as its focus is on boosting investment in research and development, as well as high-tech and green growth sectors. As such, ‘everyday economy’ sectors, including retail and hospitality, would be overlooked, the HR body cautioned. Taking an incremental, bottom-up approach to innovation could boost productivity and performance across much larger parts of the economy, the CIPD added. “We need changes to a range of linked policy areas including skills, innovation, investment in digital technologies, green transition, business support and labour market enforcement, which collectively affect the business environment and firms’ management capability and investment behaviour,” said Cheese. More on this Topic. Employees stranded abroad: what are the legal considerations? Car body repairer who complained to the council about a blocked work toilet awarded £32k in unfair dismissal ruling. Make job sharing more accessible and cut tax to improve gender equality, report advises. Seven in 10 disabled female employees earn less than £15 an hour, analysis reveals. Companies are raising pay but should be encouraging more people back into work, say experts.