Industrial Strategy: my comments

Innovation Caucus – Industrial Strategy Response: my contribution

 

The Innovation Caucus (http://innovationcaucus.co.uk) will submit a response to the Industrial Strategy (see green paper here). As a member of the caucus, here is my contribution to their questions.

Which challenge areas should the Industrial Challenge Strategy Fund focus on to drive maximum economic impact, and why?

 

Supporting businesses to start and grow, and labour productivity

What else can the UK do to create an environment that supports the commercialisation of ideas? NB please emphasis what social science can do in particular.

 

The Internet is still the place for new services. UK academics have contributed substantially to the technologies on the Net (last known stat I have was that 70% of the Internet technologies were invented in the UK, although commercialised elsewhere). Despite the seemingly large influence of GAFA (Google, Amazon, Facebook and Apple), the Internet of the future, because of IoT, is much larger and has greater potential than the Internet of the present and past. New fledgling disruptive platforms, particularly around IoT like the HAT (hubofallthings.com) have already been funded by research and the market. However, to scale and become global and be able to compete with the current platforms, they would need support, not directly, but to build the ecosystem and the new applications and startups that will scale globally. Social sciences have deep knowledge in the design and built of ecosystems from service systems design research, to platform business models and new economic/business models. New behaviours and new innovations around such technologies would need good advice from social science research streams.

 

How can we best support research and innovation strengths in local areas?

 

Create new incubation and accelerator labs locally where startups and researchers can co-work and hang out – even if its just once a week. Community creation is an essential aspect of support and with more people working from home, co-working spaces to come together become even more important.

Sectors and the role of the social sciences…

 

How can the Government and industry help sectors come together to identify the opportunities for a ‘sector deal’ to address – especially where industries are fragmented or not well defined?

 

The traditional ‘sectors’ are slowly becoming defunct. Automotive is widening towards mobility, creative industries are now everything from movies to gaming. Social sciences, especially economics and business, can help to understand WHY these industries are fragmenting and how the underpinning markets may evolve. More importantly, industrial strategy has to deal with the power of platforms, and the role new platforms that cuts across sectors will shape the future.

How can the Government ensure that ‘sector deals’ promote competition and incorporate the interests of new entrants?

 

By understanding ecosystems and platforms and how they work. There is a whole stream of literature on this. Every ecosystem/market has to deal with what services are for the ‘public/platform’ good, what services are private (business) and should have competition, what services serve private needs and therefore need regulation.

How can the Government and industry collaborate to enable growth in new sectors of the future that emerge around new technologies and new business models?

 

By creating new public/private partnerships such as accelerator labs, seed funds to incubate new ideas. These spaces could also be co-working spaces and also have boot-camps and regular tutorials on business/economic models. It would allow industry and people to come together to share ideas and be empowered to move quickly. Speed is essential in the digital economy.

Institutional arrangements…

 

Recognising the need for local initiative and leadership, how should we best work with local areas to create and strengthen key local institutions?

 

Local institutions are currently managed by people of a different generation. There should be greater effort to bring the young into local initiatives. Most of the young (those 14-21) are digital natives and are more conversant with the digital medium. The role of the digital medium for local initiatives is key.

What are the most important institutions which we need to upgrade or support to back growth in particular areas?

 

 
Youth employment, skills training, empowerment and entrepreneurial mindsets are key to Britain’s future. Every local institution should have a more dynamic engagement with the youth for jobs and for starting new businesses.

Are there institutions missing in certain areas which we could help create or strengthen to support local growth?

 

I’m not knowledgeable enough in this area to comment

Final comments & follow up

Do you have any further comments on the Industrial Strategy you would like us to try and include?

 

Most of what I have said is in the above. However, I do want to stress that the development of the Internet, its role in enabling IoT and other sectors seem to be ignored. Also, globally, there is a land grab to become the next platform to bed down the ‘sectors’. The control of platforms would drive the growth of any economy whether its the platform for automotive, energy etc. The industrial strategy needs to think about the development of these cross-sector ‘horizontals’ and not merely the ‘vertical’ sectors and how Britain can play a role in shaping the development, and the global land grab to become the next ubiquitous platform.

Finally, I have a comment on labour productivity. In my mind, having worked with technologies for several years, labour productivity is integrated with the notion of ‘augmented’ productivity. For example, I advise into Lloyds Register that uses technology to create the ‘super surveyor’ of ships and physical assets. Focusing on just the person misses the point. The unit here is the augmented person, made more productive, and hopefully doing meaningful work, through capability augmentation. The unit of analysis is therefore (1) the augmented human (2) the effectiveness of the integration of human and tech. This is probably where the social sciences play the biggest role in assisting Britain for the future.

Published by Irene Ng

Professor of Marketing & Service Systems. Director, International Institute for Product & Service Innovation, WMG, University of Warwick

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