"UK should aim to be “The Smartest Nation on Earth”
The MCA (Management Consultancies Association) is calling on the UK Government to develop a more radical Industrial Strategy that turns its recent Green Paper’s ‘welcome and improving initiatives’ into a ‘compelling economic vision’ for a post-Brexit Britain.
The MCA report published today (New Economy 2020 and Beyond) sets out ambitious plans in the key areas of Economic policy, Devolution, Education and Digital. The trade body for the UK’s management consulting industry says that these are necessary not just to create growth and new jobs, but also to heal some of the divisions exposed by the EU referendum vote.
The Association argues that the UK ‘must strive to be the most fit-for-purpose modern economy’. To achieve this, it says, ‘our challenge is to become the Smartest Nation on Earth’.
As Article 50 negotiations begin, the MCA says that ministers should be ‘smarter’ in their approach. It argues that withdrawal from the EU must be conducted in an orderly and constructive fashion, to protect UK successes and promote ‘economic transformation and renewal.’ The report also argues the ministers should see the EU as ‘partners’ in the negotiations and emphasise ‘collective interest’ wherever it can. A ‘good Brexit’ and a successful Industrial Strategy are linked.
Alan Leaman, Chief Executive of the MCA, said:
“The Government must explain the interdependence between a successful Industrial Strategy and our negotiations as we depart the EU. The UK benefits disproportionately from being an open, flexible and international economy. Our approach should build on this, not mark a retreat.”
The MCA report argues that much of the UK’s economic strength lies in its role as the world’s ‘most successful and leading value-add economy’. The UK government should therefore stress the international character of the British economy – including by making clear it will remain open to necessary and flexible levels of migration.
The report also suggests how Brexit can be used as a pretext to examine what the UK must do better in the future. It calls for radical approaches to the UK’s education and skills needs in the Digital Age. It stresses the need for urgent action to create new economic opportunities in the regions. And the report stresses the role of technological innovations, including AI, in improving UK productivity.
Paul Connolly, Director of the MCA Think Tank and Deputy Chief Executive of the MCA said:
“Our policy proposals highlight the importance at this moment of lifting the sights of both government and business. We should chart a new course for the UK and economy, building on strengths but also pursuing further modernisation with discipline and rigour. And we should do so in a way that stresses social justice, and the potential of many other cities and regions beyond London to be international success stories in their own right.”
New Economy 2020 sets out plans for each of its priority areas:
1 A new economic vision
The Industrial Strategy should target a high-value, high wage economy. Business must pursue the digitisation of all parts of the economy to drive productivity. Future infrastructure investment should be strategic and purposive, aligned to a clear economic and industrial vision. Government should look to provide similar clarity to private investors about R&D support.
2 Radical devolution of power and opportunity
The UK should be more open about the need for and consequences of economic modernisation. There needs to be a stronger understanding of the link between economic regeneration and political devolution. There should be a presumption in favour of any government agency that does not need to be in London being relocated to the regions. Incentives should be provided to businesses who choose to relocate out of the capital. To help rebalance the economy, particular support should be given to modernised approaches to manufacturing in the regions.
3 Education: the best system for the smartest people
The UK needs a radical and transformative approach to education. Creativity and adaptability, as well as STEM, are key ingredients for the workforce. They will be even more important as AI and automation become more significant. Early specialisation is damaging. The Government should convert the Apprenticeship levy into a Industrial Learning Fund. The Government should target a step change in public and private spending on education and research, with the aim of achieving a 50% uplift in education spend by 2025. The report says that government should foster constructive debate on migrant labour needs by linking it to improvements in domestic skills and productivity.
4 Digital for outcomes, consumers and citizens
The UK should adopt a Digital Strategic Primary Principle across all sectors, encapsulating the importance of digital as the main driver of transformation, and ensuring that the transformation itself is what counts. Government should link its own digitisation more clearly with improved outcomes for citizens and a clearer service philosophy. We need radical measures on the ownership of data, so that we drive innovation by empowering consumers. Regulations should be streamlined and modernised to help digital entrepreneurs.