Industrial Strategy:government and industry in 

partnershipJune 2013

www.gov.uk/bis/industrial-strategy #ind strategy

UK growth strategy*

Industrial Strategy

• Deliver the most competitive tax system in the G20 • Make UK one of the best places in Europe to start, 

finance and grow a business• Encourage investment and exports as a route to a 

more balanced economy• Create a more educated workforce that is the most 

flexible in Europe

* The 4 ambitions from The Plan for Growth 2011, published by HMT and BIS alongside Budget 2011

Strong, sustainable and balanced growth

Support for Manufacturing

Growth Review Framework published December 2010

Published as part of Government’s Plan for Growth. Actions seek to address:

• Improving Manufacturing Productivity• Commercialisation of Technology• Developing a skilled workforce• Promoting the image of the sectorImplementation complete. Next stage is measuring impact.

• Advanced Manufacturing Supply Chain Initiative: Supports innovative projects where UK is well placed to take a global lead. Successful bids for Rounds 1 and 2 projected to secure or create 18,000 jobs. Additional £120m to run two further rounds secured. Round 3 closed; round 4 deadline 16th October.

• Launched the reformed Manufacturing Advisory Service in January 2012.

• High Value Manufacturing Catapult, opened in October 2011• 16 new university-based Centres for Innovative Manufacturing, to support emerging science in areas of strategic opportunity for manufacturing and address the long-term manufacturing research challenges.

• March announcement of 13 further successful bids to open University Technical Colleges, bringing total number of UTCs to 45.

• Foresight Manufacturing Project: 2 year project investigating future of manufacturing to 2050, reporting Autumn 2013.

• Annual Investment Allowance Temporary – 2 year – tenfold increase in threshold to £250,000

• Further 1% cut in Corporation Tax to 20% in 2015

• R&D tax credit rate for large company R&D increased to 10%

Recent actions

Innovation: Support for Manufacturing

High Value Manufacturing Catapult Centre

Strathclyde Advanced Forming Research Centre

Coventry Manufacturing Technology Centre

Rotherham Advanced Manufacturing Research CentreNuclear Advanced Manufacturing Research Centre

Wilton /Sedgefield Centre for Process Innovation

Bristol National Composites Centre

Coventry Warwick Manufacturing Group

Locations

• Materials

• Manufacturing process technologies/techniques

• Welding/forming

• Industrial biotechnology

• Sectors

Capabilities

• High Value Manufacturing a key Competency for TSB – underpins a range of sectors

• TSB Portfolio >£50m, EPSRC Portfolio >£58m

• UK Strengths: Aero. Auto. Electronics, Life Sciences, MEMS, Satellites

• The Future – Customised Manufacturing, Plastic Electronics, Advanced Materials (e.g. graphene)

• Further investment of £600m in Science and Innovation announced in Autumn Statement 2012

R&D Tax Credit: The largest source of Government support for business R&D:£1.1 billion (claimed on £10.9 billion of business R&D) by 10,290 businesses in 2010/11Government increased the SME rate of relief to 200% in 2011 and to 225% in 2012. Large company rate is 130%.

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Strathclyde Advanced Forming Research Centre

Coventry Manufacturing Technology Centre

Rotherham Advanced Manufacturing Research CentreNuclear Advanced Manufacturing Research Centre

Wilton /Sedgefield Centre for Process Innovation

Skills: Manufacturing

Apprenticeships

University Technical Colleges

Promoting STEM skills

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Apprenticeship starts 2010/11

• Apprenticeships are at the centre of our workplace training offer, delivering job-related, transferable skills.• Focus on improving quality and quantity of apprenticeships, including developing more higher level apprenticeships.• Support from key companies including Airbus, Shepherd Offshore and GM Vauxhall, who all stand to benefit from world class, nationally accredited training delivered in the workplace.• Apprenticeship starts in manufacturing and engineering in 2010/11 totalled 48,970 – up almost 30% on 2009/10

• Provisional figures for 2011/12 show there 57,000 Apprenticeship starts in manufacturing and engineering.

•Strategy to promote and improve teaching of STEM skills in secondary and higher level education, including through STEMNET co-ordinating a range of activities between business and schools.

• 45 UTC’s now announced. On course to exceed commitment to establish 24 UTCs by 2014. 5 already open, 27 due to open over September 2013 and 2014.• Creates opportunities for more than 28,000 young people (14-19 year olds) to train as engineers, scientists and technicians of the future.• 38 Universities and over 400 employers now involved in UTCs.

Engineering Skills shortage: Government working with industry to shore up the engineering skills pipeline. British employers currently face a workforce with insufficient skills which are critical to many industries of the future and to our internationalcompetitiveness. Project Team to report Summer 2013.

Strengthening Manufacturing Supply Chains

Support to improve competitiveness of UK Supply Chain activity:• Advanced Manufacturing Supply Chain Initiative: Launched in

November 2011. £125 million was available in the first two rounds. High demand in both rounds with over 70 bids seeking total funding in excess of £300M received. Successful bids are projected to create or safeguard over 18,000 jobs.

• Additional funding of £120 million for a further 2 rounds announced in the Autumn Statement. 26 new bids for Round 3 being assessed; application deadline noon on 16 October for Round 4.

• Manufacturing Advisory Service: New MAS service includes £7 million of funding to deliver supply chain activities over the next three years.

• Procurement and supply chain capability: government shifting to more strategic relationship with suppliers. Sector Strategies including a focus on UK Supply Chains and relationships with enabling sectors.

Image of Manufacturing

Made in Britain exhibitionsfocussing on success, capability

and growth

Make it in Great Britain Campaign an exhibition of the

best of innovative British manufacturing held at the

Science Museum summer 2012

See Inside Manufacturing initiative that encourages young

people to consider a career in manufacturing.

Queen Elizabeth Prize for Engineering launched 17

November 2011

First winners £1m bi-annual prize announced in March 2013

A package of measures to help change perceptions of manufacturing.

Exports

UK exporters account for

70% of business

R&D.

Exporting forms a core strand of the Government’s Plan for GrowthThe Government’s ambitions: •Doubling UK exports to £1 trillion a year by 2020;•Getting 100,000 more UK companies exporting by 2020;•Getting one in four UK companies to export (European average) rather than one in five at present; and•Maintaining the UK’s position as the most favoured location in Europe for inward investment and doubling the UK’s stock of FDI to £1 trillion by 2020

UKTI will seek to double its client base to 50,000 over the next three years. SMEs key to improving export performance. National Export Challenge to get up to a further 100,000SMEs to export. Initiatives include:•Open to Export web resource, launched October 29, will provide SMEs with professional export advice allowing peer to peer advice and information sharing•‘How to’ export guide for intermediaries to share with clientsLondon 2012 Olympics & Paralympics widely regarded as the ‘greatest’ Games ever, and showcasedBritain at its very best to the world.

Industrial Strategy

Core work streams1. Sector strategies2. Technologies3. Procurement4. Skills5. Access to finance 

(Business Bank)

Industrial Strategy:  A Coherent, co‐ordinated approach

• Long‐term; Whole‐of‐government• Partnership with business• Consistent sector strategy framework• Active co‐ordination

— All cross‐cutting work feeds into sectors, and vice versa

— One size does not fit all –sectors will need different spectrum of support

Industrial Strategy: government and industry in partnership

Government is:

Industrial Strategy

• Supporting key sectors with potential for growth

• Supporting 8 great emerging technologies

• Working with business to help develop skills that businesses will need

• Working to improve access to finance for businesses

• Giving greater clarity on procurement opportunities

Regenerative Medicine

Agri‐science

Energy storage

RoboticsBig data Synthetic biology

Advanced materials and nanotechnology

Space technology

Basis for sector partnership choices

Industrial Strategy

• Which sectors could make the greatest contribution to growth? Based on:

– Size and opportunity for future economic growth and employment

– Barriers to growth

– Scope for Government action

• Analysis published in September 2012

Strategic partnerships – the sectors

Industrial Strategy

Published

Summer 2013

Aerospace (March 2013)Aim:Maintain existing UK market share; secure UK employment

Life Science Strategy (Dec 2011) and one year on update (Dec 2012)Aim: To make the UK the global hub for life sciences

Nuclear (March 2013)Aim: Grow the global market share; set out role that nuclear plays in UK energy mix

Agri‐techAim: increase inward investment and exports

EducationAim: Increase the UK's education exports

Information EconomyAim: to seize the opportunities from new ICT technology

Offshore windAim: Build competitive and innovative UK supply chain

Oil and Gas (March 2013) Aim: Increase inward investment in energy supply chain

ConstructionAim:make the UK the global leader in sustainable construction

AutomotiveAim: Investment in R&D; grow and develop UK supply chain 

Professional Business ServicesAim: make the UK the global hub of expertise

Progress – highlights from the last six months

Progress to date

• Publication of life sciences ‘one year on’, aerospace, nuclear, oil & gas  and Information Economy  sector strategies;

• David Willetts set out in January 2013 how Government will use the £600m funding announced in Autumn Statement 2012 to support the “8 greattechnologies”

• Round 2 of skills Employer Ownership Pilot, prioritising partnership sectors (closed 28 March 2013)

• First strategy update at Budget 2013 for the Business Bank, launching  £300m investment scheme

• Updated procurement pipelines published in May 2013 – unlocking potential contract opportunities across sectors worth nearly £79 billion 

• The Industrial Strategy Council held its first meeting on 14 May

Progress ‐ Life Sciences StrategyAim: To secure the UK’s position as a global hub for health life sciences.

• BIS through the MRC and TSB will invest £310m to support the discovery, development and commercialisation of research.

• Promote through the Life Sciences Investment Organisation - the UK’s status as Europe’s leading destination for inward investment in the sector.

• Help smaller high risk early stage companies by introducing a new Seed Enterprise Investment Scheme (SEIS), offering a 50 per cent income tax relief on investments.

• Introduce an above the line R&D tax credit, to improve the visibility and certainty of R&D tax relief to attract large scale investment in innovation.

Progress ‐ Aerospace StrategyAim: To maintain existing UK market share and secure UK employment.

• BIS and the Sector, through the Aerospace Growth Partnership (AGP) -Budget 2013 allocated £1bn to fund Aerospace Technology Institute, match funded by industry.

• Develop the aerospace Manufacturing Accelerator Programme - industry will scope the business case by the end of 2013/14.

• Tackle Access to Finance issues through the newly created Aerospace Finance Forum.

• The sector and UKTI will work together to develop a more strategic approach to identifying and pursuing opportunities in overseas target markets.

Progress ‐ Nuclear StrategyAim: Ensure the development of a vibrant UK nuclear industry that is an area of economic and strategic national strength, providing the UK with a safe, reliable and affordable supply of low-carbon electricity.

• Invest £15m through UK Research Councils in equipment and access to Culham, National Nuclear Laboratory and Dalton Cumbrian Facility to facilitate research.

• Government (BIS/DECC) and Industry: Initiate cost reduction programme.

• UKTI to develop a strategy to increase the level of investment over time for all parts of the nuclear supply chain.

• UKTI to work with Nuclear Industry Council (NIC), the Nuclear Industry Association and other parts of the industry to develop an export strategy, involving other parts of government.

Progress ‐ Oil and Gas StrategyAim: To maximise the economic production of the UK’s offshore oil and gas resources.

• Map the UK supply chain, including exports, by value and destination, to determine areas of constraint and potential opportunities for additional support.

• Government and industry group which works to maximise economic recovery of the UK’s offshore resources of oil and gas.

• Review supply chain position in relation to ‘performance bonds’.

• Industry to establish a national centre of excellence for technology.

• Establish a national programme to retrain ex-military personnel and those from other industries with the relevant transferable skills.

Progress ‐ Information Economy StrategyAim: For the UK to be the best place in the world to start and grow a technology business and for all our companies and organisations to be confident and successful consumers of technology.

• Launching a new programme to help 1.6 million small and medium sized enterprises (SMEs) scale up their business online over the next five years.

• Academia and business partnering to develop a digital skills strategy.

• Promotion of innovative teaching tools in schools, using online learning platforms.

• Developing a new data capability strategy, allowing people, businesses and the public sector to identify innovative and more efficient interventions on big policy challenges such as education, public health or transport.

• Establishing the world’s first facility for testing state of the art 5G mobile technology, working with industry and the University of Surrey.

Progress – technologies 

Progress to date

• Seven Catapultso High Value Manufacturing, Cell Therapy, OffshoreRenewable Energy, Satellite Applications andConnected Digital Economy are open

o Future Cities and Transport Systems open byAugust 2013

• Support for “eight great technologies”o £600m funding in Autumn Statement 2012

• Patent Box introduced progressively from April 2013will provide reduced corporation tax rate of 10% forcompanies exploiting patented inventions

Regenerative Medicine

Agri‐science

Energy storage

Robotics

Big data Synthetic biology

Advanced materials and nanotechnology

Space technology