Book contents
- Frontmatter
- Contents
- List of Tables and Figures
- The Contributors
- Foreword
- Introduction
- Interlude: ‘Mirror, Mirror, On the Wall – Who has the Highest Debt of All?’
- Part One Building a Full-Employment Economy: Introduction
- Part Two Public Investment – Prioritising Society Rather than Profit: Introduction
- Part Three Making Finance Work for Society: Introduction
- Part Four Genuine Social Security: Introduction
- Part Five How to provide for Social Needs: Introduction
- Conclusion
- Jargon Busters
- References and Further Reading
- Index
2 - Reindustrialising the UK
Published online by Cambridge University Press: 11 March 2021
- Frontmatter
- Contents
- List of Tables and Figures
- The Contributors
- Foreword
- Introduction
- Interlude: ‘Mirror, Mirror, On the Wall – Who has the Highest Debt of All?’
- Part One Building a Full-Employment Economy: Introduction
- Part Two Public Investment – Prioritising Society Rather than Profit: Introduction
- Part Three Making Finance Work for Society: Introduction
- Part Four Genuine Social Security: Introduction
- Part Five How to provide for Social Needs: Introduction
- Conclusion
- Jargon Busters
- References and Further Reading
- Index
Summary
What's the issue?
The UK economy is at a crossroads. Following on from the dramatic deindustrialisation that began in the 1970s, and the increasing loss of global industrial competitiveness from the late 1990s, today's UK industrial sector is a pale shadow of its former self. Since the global financial crisis, all governments have recognised the need for an industrial strategy to rebalance the UK economy (both sectorally and regionally), improve its productivity, and enable it to reap the benefits of the green technology transition and the digital industrial revolution.
In 2017, the Conservative government launched a new industrial strategy and, after several months, an Industrial Strategy Council was set up, chaired by Andy Haldane, chief economist of the Bank of England.
Given the UK's modest track record in industrial strategy, and the mounting challenge of reindustrialising the economy in the face of intense international competition, the extent to which the latest strategy is up to the challenge has been widely questioned.
What then, should the key elements of a more convincing approach actually be?
Analysis
Since 1998, the UK has experienced a fall in its global share of all major manufacturing industries. This loss has been only partially compensated by growth in the business services sectors. These, of course, were also badly hit by the financial crisis (see Figures 4 and 5 below) and the impact of Brexit remains unclear. Deindustrialisation has also brought a drop in productivity – especially among small and medium-sized enterprises (SMEs) and service companies. Meanwhile, ‘financialisation’ – the increasing pressure on manufacturing companies to deliver higher short-term profits for shareholders – has also meant that R&D (research and development) and fixed capital investments have been slashed. All this has resulted in the polarisation and disarticulation of the UK's industrial ecosystem; combined with a decade of austerity, this has also had a dramatic – and negative – impact on the fortunes of communities and regions that rely on manufacturing.
In response to this, as well as mounting competition from both low-cost economies at one end of the market (such as China) and high-tech economies at the other (like the US, Germany, Japan and Korea), the UK government has at last rediscovered the need for an industrial strategy.
- Type
- Chapter
- Information
- Rethinking BritainPolicy Ideas for the Many, pp. 65 - 69Publisher: Bristol University PressPrint publication year: 2019