‘Propagating supply chains’ part of UK industrial strategy

The UK government will help businesses collaborate to improve their supply chains as part of its proposed modern industrial strategy.

Francis Churchill, Supply chain, 23 January 2017

Today’s green paper, Building our industrial strategy (opens new window), outlined plans to cultivate “world-leading sectors”, in part by encouraging businesses to create sector-wide deals addressing common challenges.

These challenges include improving the productivity of supply chains, facilitating long-term investment and coordination with suppliers and primary contractors, and identifying where investment and the development of technology can accelerate growth in the value chain. 

“Most modern business sectors benefit from a thriving supply chain, which may require propagation and coordinated effort from larger firms,” the paper said.

The consultation paper is part of prime minister Theresa May’s plan to make the UK a more internationally competitive and global economy after Brexit. The strategy would “be underpinned by a new approach to government, not just stepping back but stepping up to a new, active role that backs business,” May said. 

The paper proposes a system where businesses approach government with “proposals to transform and upgrade their sector through sector deals” between themselves and the government.

The government could “cultivate” key sectors by aligning government policies with sector aims, changing regulations, helping improve access to foreign markets or by supporting the creation of sector institutions, the paper suggested. The responsibility would be on businesses to show how they would cooperate strategically and demonstrate how government could help in that cooperation.

The proposal was “not about the government providing additional funding” to certain sectors, the paper added.

The paper is meant to provide a broad and holistic strategy for the economy as it prepares to leave the European Union. It is based around a number of key pillars including developing skills, encouraging trade and delivering clean energy.

It also mentions investments in infrastructure and R&D and a review of government procurement, announced by May in a speech last year (opens new window).

Paul Adams, director and industrial supply chain specialist at consultancy Vendigital (opens new window), said supporting science and innovation would be crucial for Britain as it prepared for Brexit. However, the government seemed “to be pinning its hopes” on a quick trade deal with America, he added. “British industry will be wary about what form this could take [as] Trump has made it clear that he will be putting the interests of America first.”

Peter Holbrook CEO of Social Enterprise UK (opens new window) said the paper needed to persuade all government departments to embrace “the opportunities and challenges that Brexit presents” if the final strategy is to be “more than a repackaging” of what is already being done.

“Anyone hoping for a shovel-ready industrial strategy will be sorely disappointed. Yet this is a strong starting point for a newly interventionist government, and if government is as genuinely committed to listening, and it says it is, a welcome departure from what has gone before.”

The document currently open for consultation (opens new window).