Global Britain badly needs a bold strategy for growth

Strikes, double-digit inflation, negative real wage growth and rising interest rates: if it were not for low unemployment, you would be forgiven for thinking that we were in the 1970s.?

However, the UK is in a far stronger position than it was then, with high employment, shining sectors in the economy and far less real difference between political parties on economic policy.

Nevertheless, the incipient reversal of three decades of globalisation, along with economic nationalism, poses risks. If the UK wishes to grow respectably and sustainably, it must re-embrace its business-friendly roots and develop a robust, co-ordinated industrial policy. Covid, geopolitical instability and the energy crisis have accelerated the unwinding of globalised supply chains and prompted a reversion to industrial policies not seen for decades.?

Governments of all stripes are enacting legislation to support, and often protect, favoured industries. The expansion of US semiconductor manufacturing, to reduce reliance on China, and the Inflation Reduction Act which includes $370 billion of energy-transition subsidies are cases in point. The EU has updated its industrial strategy to support the twin transition to a green and digital economy.?

The UK has a record of world-leading innovation. British steam engines, turbines, medicines, telecommunications, banking and insurance shaped global trade. Those days look to be behind us.?

Britain voted to leave the EU seven years ago, but has failed to define its new global trading relationships. To regain its place as one of the strongest growing G7 countries, Britain needs a bold, forward-looking policy agenda and industrial strategy integrated with an actively and consistently engaged business community.?

Business leaders and policymakers need to work together to develop and sustain a favourable environment to attract and reward private capital. We must identify areas where Britain has a competitive advantage and put our weight behind driving their success. The UK is a global leader in advanced manufacturing, life sciences, and financial and professional services. Our digital technology sector is vibrant and rapidly growing; we are a leader in offshore wind and nuclear energy; and our creative industries are renowned worldwide. We should focus on these sectors and skills.?

With numerous claims on public finances, and limited scope to borrow, public funding to support an industrial strategy is limited. We need to compete for private capital on a global stage — identifying important projects and cultivating an ease of doing business. We must attract investment via infrastructure development, expand innovation hubs that foster entrepreneurship and channel research funding and skills development into our areas of strategic national interest. Getting this right will require a systematic approach, linked to an active and vibrant UK market for connecting companies with capital.?

How do you boost growth with already full employment? A properly thought-through industrial policy will emphasise the skills and talent we need to attract from outside the UK. People who have come to this country have staffed and managed our hospitals, invented technologies and run some of our biggest companies.?

The path ahead may not be straightforward but we need to worry less about long-term decline and concentrate on delivering long-term, sustainable growth. We need to turbo-charge action on all fronts.?