UK ‘risks missing out on £230bn opportunity’ without refreshed industrial strategy

Pictured: Fraisthorpe Wind Farm, Bridlington

That is the warning from the Society of Chemical Industry (SCI) this week.

The SCI has collaborated with LEK Consulting to produce a new report assessing the socio-economic benefits of the UK Government developing and delivering a new, modern industrial strategy. This strategy would focus on the industries which Chancellor Jeremy Hunt has identified as a priority for future growth, including heavy industry, cleantech, life sciences and emerging digital technologies.

The SCI is calling for the strategy to include not only increased R&D spending, to rival increased spending in markets like the US and EU under the Inflation Reduction Act and Green Deal Industrial Plan respectively. It should also include simplified tax relief systems which encourage investment in next-gen technologies and discourage investment in old, high-carbon models.

Additionally, the body wants new measures to ensure pension funds invest in innovative industrial firms within the UK, as part of ongoing reforms for the sector.

With a robust industrial strategy with these key components, the SCI estimates that the UK could generate gross added value of £230bn by 2030, against a 2021 baseline. £135bn of this boost would be attributable to clean technologies. The remainder is attributed to life sciences.

A boost for jobs

Cleantech sectors including battery energy storage, electric mobility and next-generation renewables could employ 180,000 more people in 2030 than in 2021 with the right policy landscape, the report notes.

The UK Government is notably aiming for the nation to host two million ‘green-collar’ jobs by 2030, up from around 250,000 at present. It has not, however, released a full update to its skills strategy since legislating for net-zero by 2050 back in 2019.

The SCI is urging the Government to provide a comprehensive plan for educating young people in preparation for cleantech or life sciences career and for upskilling and reskilling those already in the workforce. It is also recommending that immigration policies are flexed to help attract international talent.

Its report points to a further 240,000 jobs in manufacturing supply chains and 60,000 in life sciences, on top of the 180,000 in cleantech.

Global competition

LEK Consulting’s vice-chair for sustainability John Goddard said the UK needs to move now, or lose out. He explained: “Globally, there is increasing focus on national industrial strategies with significant progress being made. Now is the time for the UK to grasp this opportunity to accelerate our GDP growth.”

SCI chief executive Sharon Todd added: “For too long, “industrial strategy” has been used as a catchphrase rather than a tangible and actionable plan to drive economic growth. The UK has a world-leading science base, and we need to maximise this commercial potential. An ambitious and practical industrial strategy focused on our science base would mean the UK would attract investment from global scientific companies, rather than lose out to other countries.

“More focus needs to be given to creating value from science, supporting start-ups to scale, and creating an environment that attracts valuable scale-up capital.”

The UK published its first Industrial Strategy in 2017 and provided an update in 2021. The Conservatives are now under pressure from the private sector and the opposition to outline how they would modernise the strategy further if re-elected, given the pace of change in heavy industry, cleantech and digital technologies.