Time to Get over Our Prejudice against an Explicit Industrial Policy in the UK; LONGVIEW
Byline: EMMA WATKINS
WE need a new approach to industrial policy. Although we hardly need to be reminded about it, the recent BBC series Story of Wales was a valuable and insightful portrayal of the rich industrial heritage we have here in Wales.
Hearing about the birth of coal, the resurrection of the South Wales Valleys, and the subsequent development of our ports in the 18th and 19th centuries took me back to my school and university days where we heard tales of the Crawshays, of Dic Penderyn, and the early days of the Welsh labour movement.
Sitting there watching Huw Edwards wax lyrical made me think about what our industrial future will look like, and whether Wales and indeed Britain, can once again blaze a trail for modern industrial change.
Industrial policy still has a tarnished reputation in Britain - with fears of 1960s and '70s style central economic planning gone wrong. In response to that experience, the last 30 years have seen a much more hands-off, laissez-faire, approach to markets and sectors, which we are now learning has also proven less than optimal.
It is becoming clear that left to its own devices, the market does not automatically fire on all cylinders to deliver a balanced and resilient economy. What we thought was a trend towards stable and predictable growth from 1993 onwards now looks more like a quirk of emergent behaviour in a system that is much more connected, interdependent and complex than economic models could allow.
The result is we now have an economy too dominated by consumption and government spending and a serious task ahead to turn the ship around in favour of investment and trade.
It is time to get over our prejudice against having an explicit industrial policy in the UK. We need to learn lessons from the past, look again at how to make industrial policy work in practice, and put it firmly back in our plans for stimulating growth.
The approach has to be practical to engage business in developing future value chains in the UK and to realise "sticky" investment to create a more sustainable industrial base over time. We should be using all available tools such as the tax system and public procurement to develop our industrial capabilities.
We also need to learn lessons from other countries that have been more hands-on with industry over the last decades. …