The UK Government plans to transform the UK into a science and technology superpower. To support these plans, the CIPD’s public policy experts are calling for a new industrial strategy, with an emphasis on skills development and people management capability. Our recommendations will help to drive growth and innovation across all sectors of the economy, and address a number of challenges facing the UK today.

“The UK is at a critical crossroads. Unless we encourage and enable employers across all sectors to invest more in technology, management capability and workforce skills development, it’s hard to see how overall UK productivity and living standards can improve sustainably.”

Peter Cheese, Chief Executive, CIPD

We need a broader industrial strategy for the ‘everyday economy'

The CIPD’s analysis finds that the Government’s focus on boosting research and development in high-tech and green growth sectors, while critically important, is too narrow. It will only support relatively small sectors and plans to develop more clusters of high-tech new industries are unlikely to bring a general economic revival on their own.

Unless the Government broadens its plans to include ‘everyday economy’ sectors such as retail, hospitality, transport, logistics and social care – which employ millions of workers – efforts to raise overall UK productivity and prosperity will fail.  

An industrial strategy for the ‘everyday economy’ would help address a number of key challenges facing the UK today: 

  • skills and labour shortages 
  • stalled productivity and falling real wage growth 
  • an ageing workforce
  • endemically weak business investment in skills and technology
  • the need to transition to a net zero economy.

Workplace innovation starts with skills development and improved people management practices

In a discussion paper, written for the CIPD by Professor Ewart Keep, we've called for a bottom-up approach to workplace innovation, underpinned by skills development and greater investment in people management capability.

We’ve made a number of recommendations for policymakers to take on board:

  • Develop a bold, broad industrial strategy that integrates interdependent areas of policy such as skills, job quality, workplace innovation, business support, digital adoption and green transition.
  • Learn from best practice approaches toward business support and improvement, from overseas and from small-scale interventions already run in the UK. 
  • Establish a range of pilots to test and then scale-up effective approaches to improving management capability and business performance at local and sectoral levels. For example, building on insights from CIPD’s HR support pilots for small firms, Be the Business and Help to Grow Management.
  • Develop coherent industry level and local employer partnerships to boost adoption of technology and best practice people management and development practices across ‘everyday economy’ sectors and all regions.
  • Transform labour market enforcement with a much stronger focus on supporting employer compliance and raising employment standards overall, given the link between job quality and productivity.

Key changes needed across a range of policy areas

The industrial strategy we’re proposing would need to be underpinned by changes to a range of policy areas including skills, innovation, business support, digital adoption, green transition and labour market enforcement. As such, we’re engaging with a range of stakeholders and policymakers to influence the national conversation on a UK industrial strategy and push for a much greater focus on the everyday economy. 

The first step was a roundtable in London attended by economists, public policy specialists, and representatives from a range of organisations including the Institute for Government, the Institute of Directors, the British Retail Consortium, the Association of Colleges and ACCA Global. 

This group of influential stakeholders discussed the paper at length and they each underlined the importance of the calls within it, alongside the need for the UK government to take a broader and more holistic view of industrial strategy.

As part of the next steps for this piece of work, we will be taking some of these calls to the Autumn political party conferences to encourage a broader approach to industrial strategy from the main UK political parties, including at an event with the Shadow Business Secretary.

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