Industrial strategy, after its long hiatus, is back on the policy agenda. With the government’s creation of a new Department for Business, Energy and Industrial Strategy, there’s a new found remit for the state in playing a more active role in re-shaping the UK economy.
But industrial strategy today is different from the past. Back in the 1970s and 80s, ‘industrial policy’ - as it was then known - was synonymous with governments ‘picking winners’ or overly-political interference in markets. High profile failures at the time, notably British Leyland, led to an erosion of public and political support. A slow reappraisal since, first in view of the impact of global financial crisis and then the comparative success of emerging markets with industrial strategies, has just been given a rocket in view of Brexit.
These days industrial strategy is far more nuanced and dynamic. Modern industrial strategy does not favour particular firms, nor particular sectors per se, but rather revolves around the private and public sectors discovering new opportunities, identifying and supporting specific activities with commercial potential, in a process known as ‘smart specialisation’.
This modern industrial strategy has a strong regional element to it. It’s about exploiting existing regional competences and expertise, while also empowering local actors to realise potential and develop new specialisms. Smart specialisation, as part of this, facilitates dynamic regional growth.
In view of our work in this area, we were asked this summer to consider how SMEs would benefit from working with and using the facilities proposed at the Institute for Advanced Automotive Propulsion Systems (IAAPS). To do this we conducted a survey of UK SMEs in both the automotive and aerospace industries; over six weeks we received 107 responses (a 9.7 per cent response rate).
Overall, the results gleaned from this indicate that UK SMEs – across both sectors – are generally positive about IAAPS, seeing it as a conduit for accessing and sharing information relating to new technologies, and accessing a wider network of industry contacts, strengthening their supply chain relationships.
Many SMEs saw IAAPS as an opportunity to enhance their company image and access new funding. These benefits were seen to be enhanced if IAAPS was associated with a global automotive manufacturer; the latter’s presence seen as a draw to enhance greater networking and knowledge transfer. Our results also suggested that more could be still done to increase SMEs’ understanding about IAAPS, something which has helped to inform the University’s engagement strategy with business.
The latest of these engagement activities with SMEs will take at the Bristol & Bath Science Park today. This involves providing more public information about IAAPS and conducting focus groups to gauge new insights from stakeholders and get more of their involvement on designing IAAPS so that it truly enables a collaborative and open platform that can boost businesses including SMEs and start-ups, attract new investment and enhance what’s known as the cluster dynamic.
IAAPS can be an ideal candidate for smart specialisation supported by clusters of SMEs. Offering technological synergies with related sectors, IAAPS can enhance the South West’s cluster dynamic through innovation and by improving productivity. It’s an exciting time to be involved in industrial strategy and an exciting time to see how our region will benefit from these new opportunities available.
Dr Phil Tomlinson is Senior Lecturer (Associate Professor) in Business Economics in our School of Management. His research interests covers Economic Governance, Regional Development and Clusters and Industrial Policy.
Dr Felicia Fai is also a Senior Lecturer in Business Economics in the School of Management. Her research interests cover Innovation Technology R&D.