Tuesday 24 January 2017 4:45 am

Britain’s new industrial strategy must not drown out the voices of emerging sectors

The government has published its long-awaited industrial strategy – its 10 point plan for building a robust economy in the face of economic change, increasing automation and the unknown impact of leaving the EU.

Wrapped up in its 125 pages is a strong focus on innovation-led growth, including clarity on the £4.7bn of additional funding for R&D announced in the Autumn Statement and a commitment to ensuring the benefits of growth reach all parts of the country.

The flagship policy, however, is the establishment of new “sector deals”. This is an open door approach for industries to present their big asks to government. In the words of business secretary Greg Clark: “make us an offer we can’t refuse”. It’s a smart move towards tailoring support to different sectors, whose needs differ greatly, and indicates government is willing to be flexible on the support it offers.

Read more: As May prepares to unveil her industrial strategy, is it doomed to fail?

While this builds on work started by Vince Cable in establishing Sector Councils, there’s a noticeable and welcome difference: these priority sectors are not being specified beforehand by government. In the past, the system worked well for large businesses with dedicated government relations teams, as they could coalesce around one view and present this to policy-makers. The new open door policy could level the playing field.

But the open door needs flashing lights, easy access and a welcome mat. Emerging, fast changing sectors, such as digital and tech, tend to be less defined, comprised of smaller firms, and as a result may find it more difficult to respond to the government’s call. These sectors could be responsible for creating the jobs of the future, requiring early stage support to reap longer-term benefits. It means getting the right regulatory framework in place and harnessing government procurement to drive their growth.

A model these sectors might like to emulate is that of the creative industries, a diverse group of businesses spanning content like film, music and games, and services like design, publishing and advertising. These industries, Nesta’s research suggests, are the ones that will thrive in an automated future where creativity and imagination are more highly prized.

Work by the Creative Industries Council and the Creative Industries Federation has resulted in a strategy setting out a vision for future development. Importantly, it articulates the steps that the government and industry should take to get there. This work has been rewarded with one of the early sector deals announced in the strategy.

Read more: It’s pure hubris for politicians to think they can “rebalance” the economy

Another risk of the sector deals approach is that it misses the opportunities for cooperation between sectors. For example, Nesta research has shown the benefits of combining creative and technical skills. In fact, firms that fuse both show 8 per cent higher sales growth than science-only firms, suggesting the need for a broader education focus on STEAM – Science, Technology, Engineering, the Arts and Maths – not STEM.

Addressing big societal and technical challenges will require sectors to work together, and the government should ensure that the new Industrial Strategy Challenge Fund (announced in the green paper), a challenge-led approach to supporting the development of technologies and industries, helps to forge cross-sector alliances that address this gap.

The government is off to a great start with its innovation-led industrial strategy. The next challenges are to make sure that established, incumbent voices do not drown out those sectors that have difficulty being heard, and that we equip our workforce for the jobs these sectors could provide.