The UK’s Industrial Strategy (November 2017) marks a turning point in the attitude of the government to its role in supporting the economy. It’s a recognition that the economy shouldn’t be left solely to market forces, that Government should be providing direction, energy and support for businesses. Angus Laing sets out why and how businesses should see the relevance to them and get on-board.

Until last year, the UK was one of the few nations in the developed world without an industrial strategy, having become attached to the principle that businesses and markets do best when given the freedom to run themselves.

The industrial strategy white paper “Building a Britain fit for the future” had a lengthy gestation period. The paper is ultimately a

reflection of the realities of post-2008 economics, but also some of the acknowledged weaknesses in the UK economy: low productivity, low investment in research and development, and stark inequalities between levels of business activity in our regions.

In summary, the Industrial Strategy provides a vision for creating an economy that “boosts productivity and earning power throughout the UK”. It outlines five foundations for a transformed economy based on ideas, people, infrastructure, business environment and places. It focuses on global leadership in growing areas of opportunity: Artificial Intelligence and the data economy; clean growth; the future of mobility, and meeting the needs of an ageing population.

One of the main platforms to drive change and enhance performance is seen to be the UK’s universities, and in particular business schools. It’s a recognition of the importance of closer and more regular collaborations between businesses and the expertise available in business schools, of how together we can put flesh on the bones of the Strategy and achieve real progress in enhancing the economic performance of the UK.

People and places

An area where the market hasn’t replaced previously state-funded provision is business support. In the context of the aims of the Strategy, there is a particular need for high-quality, specialised help with areas like the adoption, management and full exploitation of new technologies, particularly those relating to digitalisation; the leadership and management skills businesses require to improve productivity; and increasingly, the future of work itself, and how employers can continue to provide rewarding careers. While technology has steadily been seen to transform different forms of manual work and roles in sectors such as manufacturing, we are now entering a new phase where professional careers (what might be called middle-class, white-collar careers) are being eroded and replaced by the introduction of AI and the use of Big Data analytics.

Business schools such as LUMS have the knowledge, experience and creativity to adapt and take a leading position in delivering the Strategy. The Work Foundation, an arm of the School, has a legacy of exploring and emphasising the value to economies of ‘Good Work’ - based on long-term, mutually beneficial relationships between employers and employees. It’s one of the roles of business schools to provide a pipeline of innovative and entrepreneurial graduates, the talent able to support business growth. One example of a significant project given within the White Paper is ‘Productivity through People’ (PtP), a pilot scheme being run by LUMS on behalf of key industrial players such as BAE, Siemens and Rolls Royce. Owner-managers of advanced manufacturing and engineering businesses in the region have joined a community of world-leading manufacturing businesses and SMEs in the North West to explore a blueprint of practical approaches for productivity gains and growth. Participants make behind-the-scenes visits to BAE Systems, Siemens and Rolls Royce and take part in masterclasses and workshops with industry leaders and experts who have hands-on experience of workplace transformation; they share case study insights into the mechanics of productivity success, leadership, communications, culture change and innovation. As a result of the impact to their bottom line seen by the pilot firms, PtP is now being adopted as a model in other UK regions.

The greatest impact from austerity and the reduction in business support capacity has been in the regions. In this context, business schools can operate as anchors in regional economies, both as large employers in themselves and as the hubs for expertise, business networks, collaborations and ideas. LUMS works with local Chambers of Commerce, the Institute of Directors, the Confederation of British Industry, and EU-funded initiatives for firms in Lancashire and Cumbria that allows businesses access to free or low cost expertise, to develop new business models, best practice and standards. There are a range of networks open to businesses through business schools such as LUMS for improving productivity, becoming more innovative, introducing low carbon technologies and sharing experiences. And there are opportunities to get fresh perspectives from targeted projects with business students, delivering new insights and recommendations for practical action.

The success of the Industrial Strategy will all depend on its implementation. And implementation depends on motivation, not just tackling the problems and challenges of productivity, but for businesses to aspire to being part of a whole new world of working and doing business, which is ahead of us all. Business schools have a central role to play in the realisation of that aspiration.