Industrial strategy and clean growth must go hand-in-hand
This post is by Carolyn Fairbairn, director general of the CBI.
Technology is changing the world around us at an unprecedented rate. The Internet of Things, the sharing economy, 5G and autonomous vehicles will all change the way we live and work. At the same time, Brexit is going to have a profound impact on our politics and the way the UK works and trades with Europe and the rest of the world.
These changes present both opportunities and challenges: new technologies open up new avenues for industry, with new processes and markets, but we are inevitably living in uncertain times, as the political sands continue to shift.
A modern industrial strategy will enable the UK to grasp the opportunities, by reinforcing the foundations of skills, infrastructure, research and innovation. It can also provide a long term agenda that will give firms consistency and clarity, enabling investment.
The green paper makes a good start on these priorities. It also rightly identifies low cost energy and clean growth as a critical part of the picture, just as the government finalises its clean growth plan to meet our 2030 carbon targets.
As CBI’s recent report on the low carbon future, Stepping up to the challenge, makes clear, these two strategies should not be seen as separate entities. Globally, we will spend $90 trillion on infrastructure by 2030, the majority of which will be low carbon, following the 2015 Paris Agreement. Developed and developing nations are setting out their plans for decarbonisation: China has targeted 20GW of offshore wind by 2020; Norway targets 100 per cent ultra-low emissions vehicle sales by 2025. These are areas the UK excels in. Therefore, decarbonising our own economy and finding opportunities for growth are two sides of the same coin.
But achieving these outcomes will require a clear and credible plan against which businesses can innovate and invest: this is what the clean growth plan should provide. With industry already making great strides, the plan needs to go with the grain of the market and look at what action can be taken across different parts of the economy to support further investment; identifying where we can build on significant progress already made, and where new thinking is needed. It is by no means expected to have all the answers, but it is expected to be ‘future fit’, helping businesses to plan ahead.
This refreshed plan, coupled with a new mindset which embeds low carbon growth within a modern industrial strategy, will not just help to address the challenges of energy affordability, sustainability and security, but can also build a prosperous and resilient economy. It is an opportunity we must seize with both hands.
‘Industrial strategy fit for the future: perspectives on building a competitive UK economy’ brings together the views of seven respected thinkers from politics, business, trade unions and academia on the kind of economy the industrial strategy should be building and the role low carbon and resource efficiency can play.