What to make of the new industrial strategy?
Last week the government launched its industrial strategy, setting out its vision for a post-Brexit Britain. And it’s done so on a truly industrial scale, with a document coming in at just over 130 pages. Given its size, it’s broad-ranging, focusing on ensuring the wider impact of the economy on society and increasing business growth and productivity.
The strategy is built on 10 pillars that the government believes need to be addressed to increase growth:
- investing in science, research and innovation;
- developing skills;
- upgrading infrastructure;
- supporting businesses to start and grow;
- improving procurement;
- encouraging trade and inward investment;
- delivering affordable energy and clean growth;
- cultivating world-leading sectors;
- driving growth across the whole country and
- creating the right institutions to bring together sectors and places.
Whilst it scores points for its ambition and breadth, the strategy falls down when it comes down to the detail - and indeed, much of its content frames existing activities being carried forward, rather than any new ‘grand plan’.
This wouldn’t be a problem in itself if the activities were as ambitious and ground-breaking as the government makes out. However, that’s not necessarily the case.
The pillar on ‘developing skills’ rightly highlights the weakness of technical education, but it largely positions its Post-16 Skills Plan as the main solution. That plan, launched before Christmas, attempts to remove much of the confusion surrounding the current myriad of qualifications and create a level playing field with the traditional academic pathway. However, with reduced funding to further education and the weak careers guidance structure it is unlikely to meet the government’s full ambition and help sector businesses. Not to mention the fact that retail is not being identified as a coherent technical area.
Similarly, in the pillar on ‘creating the right institutions to bring together sectors and places’ the five-point tourism plan is highlighted as an existing example of where government is working hand-in-hand with a particular sector. However, this plan is unlikely to leave many tourism businesses reassured that the government is doing much to help the sector move forward.
For example, the strand on skills and jobs largely focuses on seasonal apprenticeships. Whilst these are important for many tourism businesses, the plan doesn’t address the real skills and job issues they are facing, such as rising staff costs, recruitment difficulties and changing employee expectations.
The government is at pains to reinforce that this ‘modern’ industrial strategy is not about ‘picking winners’. But it’s hard not to be concerned that it will focus on certain sectors, to the detriment of the visitor economy.
Other than a reference to the transport infrastructure affecting tourism, there was no mention of any of the sectors making up the visitor economy (hospitality, leisure, travel, tourism, passenger transport and retail) - despite their importance, growth, employment numbers and potential to improve productivity. There is a fear, not contradicted in the strategy, that much of the focus will be on STEM (science, technology, engineering and mathematics) sectors, because this is where it believes skill shortages, and the UK’s competitive position, lies.
In fact, every reference to skill shortages and gaps focuses on STEM sectors. It will be vital for the visitor economy to educate government ministers and officials about the range of skills it needs and perhaps overcome some initial misconceptions that it is solely about low-skilled, low-paid jobs.
This matters, as it could affect much-needed training provision. In the pillar on ‘developing skills’ the strategy highlights that many technical programmes don’t include sufficient hours to make them demanding. Over the past five years, technical qualifications have had their funding reduced, which has meant that some colleges have stopped delivering longer programmes.
We have had direct experience of this in relation to the Professional Cookery Diploma which, despite being developed to meet hospitality employers’ demands for a chef qualification with sufficient breadth and depth, has come under pressure to ‘slim down’ so it can be delivered in the required funded hours.
In the next seven years, the visitor economy is projected to need a further 471,000 managers. At the same time, the hospitality industry is currently experiencing a chronic shortage of skilled chefs which, as our forthcoming research highlights, is a global challenge. The STEM sectors are not alone in experiencing critical skill shortages that are hampering their ability to maintain and increase productivity.
It’s true that productivity across the visitor economy is low, but, given its size, that should be an opportunity for the sector to work with government to help improve it. Our upcoming research on large companies’ attitudes towards their people, productivity and performance shows that visitor economy businesses are rethinking how they best recruit, retain and develop their staff. The sector is changing, and it is important that the government recognises and supports this change.
Its commitment to apprenticeships is just one example. Over the next three years, we project that there will be over 63,000 apprentices successfully completing their programme across retail and hospitality standards and at higher levels than we have seen in the past.
As part of its pillar on ‘cultivating world-leading sectors’, the government is inviting industry sectors to come forward and develop ‘sector deals’ to improve productivity. This presents an ideal opportunity for the visitor economy - either as a whole or as specific sub-industries - to come forward and outline what it has to offer and what real support it needs from government. I could be wrong, but I suspect the government would be surprised to see such a move from the sector.
There is much to criticise with the strategy, but few would argue against its ambition and focus. While it may overlook the visitor economy in its infancy, it’s a real chance for the sector to stand up, make its case and show its true potential – that not only is it a large employer, but it has the potential to drive productivity as well.