Whilst there is much to be commended in the government’s recently released Industrial Strategy – the first since Labour returned to power in 2024 – there are many areas which could be improved, and lack detail in the initial release. The mistake may have been to lump too much into “strategy” and not accept that there are “tactical” and details which are sector-specific.
Electrical Power and Grid
The focus on the Electrical grid and power supply is welcome. Setting up a concierge for electrical connections should help de-bottleneck things. However skilled electrical engineers to are needed to properly plan, “foster & sponsor” grid expansion projects, substation, artificial inertia, frequency regulation or core capacity increases which are complementary to the new connections. There is still not evidence of strategic grid planning and direction, particularly at regional level. Too much is being left to the market.
Also, funding for grid of distribution connection is not typically pooled in the UK and falls in individual projects. At startup and pilot scale this can skew the finances so as to make them unviable. We need more startup clusters / platforms with shared grid infrastructure.
Then there’s a problem in testing. Say we want to go test a 10MW electrolyser, or 20MW wind turbine. We need somewhere to plug this into the grid for a while – and that’s not small… And that’s before any spatial planning issues. There are few projects that have overcome this. As far as government setting a strategy is concerned, that a big socket to plug.
Electricity pricing still remains an unsolved problem. The ability to change the existing market will be slowed by the long-duration contracts already let. This is not an impossible task, but one which will require political will and likely some confrontation with contract holders. At a strategic level, the direction of travel and likely shape of new arrangements and market mechanisms needs to be developed. The hardware (at grid level) and business systems which are built to honour the existing market may need to be adapted. There are risks involved, including unintended consequences. With foresight and strategic vision, they could be mitigated.
Overall Organisation
As with any new strategy across government, far too many different bodies, councils, “business models” have been set up without closing older ones. This is creating problems of choice and missed opportunities for investors. The continuation of schemes from previous administrations and the large numbers of existing contracts involved clearly hinders what is easily done in this respect, but a new administration could have cleared the decks.
Transition is just as much about what we should stop doing and supporting as much as the interesting new stuff. Old industry and tech may need to be consolidated under single entities. Much government spending in this area is still spent on legacies of the 19th century (coal mining) and 20th century (nuclear and chemicals). It is likely that further power generation, oil & gas legacies will be added to this pile in future. Re-using and re-purposing old sites needs some further consideration since developers will still vastly prefer to avoid any risks associated with contaminated or potentially contaminated land. Simply re-badging “place” is not a substitute for tackling the problems literally underlying.
Moves on Export finance in the strategy are also generally welcome intentions. In addition, support particularly to medium sized business for UK expert finance, and assistance, or simplification of the approach for them, would be helpful.
In terms of the defence spending increase, focus on UK sovereign capabilities is welcome. It is appreciated that less can be publicly disclosed in this area.
Tech – Chasing Unicorns
Chasing unicorns via British Business Bank suggests the government thinks it must be an expert in recognising unicorns. It is just as likely that the private sector will have found them first and those approaching the BBB will instead be lower tier start-ups – which may be attractive million pound companies in time, but not unicorns.
Also lumping all startups together as “tech” is not helpful. Splitting them between asset intensive and SaaS may be better. SaaS companies don’t own the platform their software sits on. It’s likely rented from a large US tech company – who therefore already know about the company right from the get-go. The answer may be in offering operating platforms (data centres and internet) as critical national infrastructure or commons. Digital sovereignty should feature in the strategy.
Also note that we as society define and value unicorns. We could do more in shaping business regulation for large or valuable companies which emerge – internationally also. It’s maybe interesting to consider overlaps between California and New York rather than the broader US in this respect, and also work with the EU and member states where this makes sense.
Health and Biotech
Calls to “streamline” drug approval processes at the Medicines and Healthcare products Regulatory Agency are interesting. There are other agencies involved and the issues, businesses and institutions in this sector tell us, often lie at the interface with the NHS itself, and fragmentation at the local level. This impacts the speed of clinical trials, trust amongst patients, and this is all underpinned by trust in science itself. The strategy does not confront this – maybe it should. We must acknowledge that trials do take time, whilst at the same time recognising that some aspects of “waiting” “queuing”, “analysing and reviewing” can be sped up. Historical lack of digitalisation and conformity in digitisation (data cleaning) is still hindering this sector. The base data sets for “failed” experiments and trials is often valuable in science, but not archived to the same standard as successful demonstrations. In part, that’s human nature.
What was missing?
Acknowledged by the government and reported by others, “sector plans” for the life sciences and financial services, plus a whole separate “defence industrial strategy”.
Later strategies which will impact on industry are also promised for “trade”, “resilience”, “clean energy workforce” and “circular economy”
Sources:
The material presented in this post has not been peer-reviewed. Any opinions are the author’s own and do not necessarily represent those of LibSTEMM. The information is given in good faith but without any liability on the part of LibSTEMM. AI tools were not used in the production of this work.
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