Terms of engagement

There has been a rash of pieces lately on industrial policy, rebalancing, growth and competitiveness, all discussing what the UK needs to do to move forward and shake off the shadow of the credit crisis. Some claim manufacturing to be special, others that they have the silver bullet to kick start growth. What none really do is clarify the terms of the debate that we're having, to clean up the horrible mess of overused, broken and misunderstood terms that we keep flinging around. You say industrial policy and I say innovation policy, let's call the whole thing off.

So let's agree on one thing - we don't have a clear common language to discuss the needs of the economy, how its structure has changed and what weapons we have in policy to try to move ourselves forward. And this is not a semantic, ivory tower point. If we have no common language we cannot have a sensible debate on the needs of the economy. Without this, we'll keep talking past one another, rehashing old and tired language on left versus right, manufacturing versus services, openness versus protectionism.

I do think that there is one common thread that we can and should start to build on and that is the interface between the public and the private sectors. The gross simplifications of the 80s, where government was to be removed completely and companies allowed to press bravely on, should not be replaced pendulum like with a similar swing to the public sector. We need a strong dialogue and progressive relationship between the public and the private sectors, one that recognises the differences in goals and works to benefit both sides.

This we have not had, with many companies viewing government as an impediment and some in government slightly fearful of the power of the companies to decide their fate. This is not about a protectionist agenda purely preferencing UK companies. However, it is about recognising that government support can have different effects depending on whether it is provided to a UK based company or a multinational. It is about having a realistic conversation between both sides so that social goals re-enter the conversation. And finally it is about achieving the appropriate balance between public and private action to achieve the goals that both have.

The language on this debate is slowly changing, for example with Mariana Mazzucato's work emphasising how the private sector has depended on prior public sector investments in so many technology areas. But these more reasoned voices are still outnumbered. A stronger debate on how to balance the work between the public and the private sector needs more progressive voices, more companies willing to be open to more than quarterly returns and more politicians to be stronger on the role of government in technology development, innovation and growth.

It is only by acknowledging that both sides need each other that we have a chance to achieve growth again. Let's hope that we all are mature enough to have that conversation and not be sucked back into the thrall of long dead economists.

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