The Government’s plan to transform the UK into a science and technology superpower will fail to raise overall living standards unless it’s linked to a broader industrial strategy aimed at boosting productivity across all sectors of the economy.
This is the central conclusion of a new CIPD discussion paper, An industrial strategy for the everyday economy, which calls for a bolder vision for economic growth to address the multiple challenges facing the UK.
The focus on high-tech and green growth sectors is too narrow
The paper’s analysis finds that the Government’s primary focus on boosting investment in research and development (R&D) and high-tech and green growth sectors will only support relatively small sectors and limited numbers of firms. For example, it highlights that 75% of private R&D spend in the UK takes place in just 400 firms and that, of the three million active UK firms, just 60,000 claim R&D tax credits.
This narrow focus for economic growth ignores the need to improve productivity in ‘everyday economy’ sectors such as retail, hospitality, transport, logistics and social care, which account for at least 40% of overall employment.
It finds that unless the Government broadens innovation and growth plans to include these everyday economy sectors, efforts to raise overall UK productivity and prosperity will fail.
We need a bottom-up approach to workplace innovation in everyday economy sectors
The paper calls for a different approach to improve performance in everyday economy sectors through boosting incremental, ‘bottom-up’ workplace innovation. This has the potential to enhance products and services and productivity across much broader swathes of the economy.
This approach to innovation is key to the successful adoption of new technologies and is supported by improvements to work organisation, skills development and changes to people management capability and practices.
The paper, written by Professor Ewart Keep, concludes there is an urgent need for a broader and long-term approach to economic growth and for a revitalised industrial strategy if we’re to address the challenges we face as a nation. It was launched at a roundtable in London attended by economists, public policy specialists, and representatives from a range of organisations. These included the Institute for Government, the Institute of Directors, the British Retail Consortium, the Association of Colleges and the Association of Chartered Certified Accountants.