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In its latest survey, an overwhelming majority of IoD members favoured the development of a meaningful industrial strategy aimed at defining specific long-term priorities for the UK economy.
Less than 10% of members felt that UK economic development should be left entirely to market forces.
The debate over industrial strategy takes place at a time when the UK’s major competitors are pursuing unprecedented measures aimed at stimulating strategic sectors and industries. These include the Inflation Reduction and CHIPS Acts in the United States and the EU’s proposed Net Zero Industry Act.
However, most IoD members do not believe that UK industrial policy should be focused on targeting specific sectors, companies or ‘national champions’ – as is common in other countries. Their priority is for an industrial strategy which focuses on reinforcing the UK’s capabilities as a centre of excellence for innovation and R&D and green investment. They also believe that should be a strong emphasis on the development of skills and infrastructure.
Commenting on the findings, Dr. Roger Barker, Director of Policy at the Institute of Directors, said: “The recent priority for UK government policy has been on regaining economic and financial stability, and in laying the groundwork for the return of economic growth. However, this is not enough to sustain the competitiveness of UK business. Business leaders clearly see the value of a longer-term policy framework which places innovation at its core, and which enables innovations to be commercially exploited in the UK.
“Experience suggests that UK policy-makers are ill-suited to ‘picking winners’, either in terms of companies or sectors. However, they can create a stable policy ecosystem which allows the UK to stand out in terms of its capacity to nurture innovative technologies and business models. This can be achieved both by financing and encouraging world class research, and by creating incentives and regulation that encourage the most innovative companies to scale-up in the UK and to stay here.”