Industrial strategy, past and present

On Monday 23 January, Theresa May and her business secretary Greg Clark launched their ‘industrial strategy’ green paper, promising that their proposed strategy would not be on the lines of the ‘fatally flawed‘ approach of the 1970s, which sought on the whole to protect industries and firms in difficulties as a result of the economic crises of that decade (and thus protect jobs) rather than to help encourage the industries of the future.

The government’s attempt to embrace the idea of an industrial strategy as opposed to more narrowly focused and ad hoc ‘industrial policy’ is welcome. Indeed it is almost certainly essential given the degree to which the economy will have to be reconfigured as a result of Brexit. The promised long-term vision is a necessary starting point, and if the assurances of a partnership between government, ‘innovators, investors, job creators, workers and consumers’ across the United Kingdom actually comes about this will be a significant step forward.

Later, I will be blogging about the contents of the green paper but before that I want to question the government’s reading of history. Industrial strategy predates the 1970s, and anyway it’s really an exaggeration to talk of a wide-ranging and coherent strategy for industrial development in that decade. In fact, the era of industrial strategy par excellence is the 1960s. I’ve written on this in the current issue of the journal Juncture, arguing that the era was much more successful in promoting growth and productivity than is generally acknowledged, and there is a short summary version of this piece to be found on the PolicyBristol blog.

A brief perusal of the current green paper suggests its aims are considerably less ambitious than those of the 1960s, not least in terms of government spending on infrastructure and on encouraging private sector investment. Assuming the strategy implemented looks something like the current policy proposal, its likely achievements are likely to be correspondingly more limited.