1. Industrial Strategy:
government and industry in
partnership
March 2013

2. Structure
Why we need to act
Industrial Strategy
Progress to date
2

3. Why we need to act
No return to the old growth model
A stable macro business environment is key to enabling growth
Expenditure Contributions to Growth
• Previous growth model 4 3.3%
based on government 2.7%
ppts )
3 GDP growth
2.0%
spending, consumption 2 - 2.5% 1.4% 0.2%
and property speculation
Average annual contribution (
1 0.6%
• Contribution to GDP from 0
-1
Government activity grew -2
from 0.3% between 1990- -3
99 to 0.7% between 1999- -4
OBR forecasts
2008 – becoming the 1997-07 2008-09 2010-11
Govt consumption & investment
2012 2013
Net trade
2014-15 2016-17
second most important Other$ Business investment
driver of growth
Household consumption & NPISH#
$ includes dwellings for Budget Responsibility Economic and Fiscal forecasts March 2013
Source: Office investment & changes in inventories
# non-profit institutions serving households (mainly charitable sector)
• The deficit means Government spending cannot contribute to
growth to the same degree 3

4. Why we need to act
UK’s relative position is under threat
If the UK stands still there is a danger we will be left behind
• Globalisation and rise of BRICS
are changing UK’s relative
position in global economy
• Developing countries are
competing higher up the value
chain, threatening the UK’s
traditional comparative
advantage
4

5. Why we need to act
A stable macro environment is key UK exports of Goods and Services to:
• Government has laid the broad 250
foundations … 200
o responsible government 150
£ billion
finances 100
o a competitive currency 50
o support for science, 0
Other emerging countries BRIC Other advanced economies EU27
1998 2008 2009 2011
o promoting exports, especially
2.2
2
to emerging markets
Currency Unit per £
Euro US $
1.8
o competitive business taxes 1.6
1.4
• … But more is needed to keep a 1.2
sustained advantage
1
Jan- Jun- Nov- Apr- Sep- Feb- Jul- Dec- May- Oct- Mar- Aug- Jan- Jun- Nov-
07 07 07 08 08 09 09 09 10 10 11 11 12 12 12
No business would operate without a long term plan 5

6. Industrial Strategy
Industrial Strategy:
government and industry in partnership

7. Industrial Strategy
Strategic partnerships – the sectors
Early 2013 Spring 2013 Summer 2013
Aerospace (Launched) Offshore wind Construction
Aim: Maintain existing UK Aim: Increase inward Aim: Improve
market share; secure UK investment in energy competitiveness and
employment supply chain productivity to support
increasing exports
Information Professional Business
Nuclear (Launched)
Economy Services
Aim: Increase inward
Aim: Optimise ICT Aim: Export opportunities
investment in energy
use by business in developing economies
supply chain
Oil and Gas Agri-tech Automotive
Aim: Increase inward Aim: Developing and Aim: Repatriate
investment in energy exporting innovative supply chain and
supply chain technologies e.g. in exploit low carbon
food security technologies
Life Science
Strategy Dec 2011 Education
Aim: Grow UK
Life Science Strategy education exports
one-year-on
Dec 2012 7

8. Progress to date
Progress
Sectors
• Publication of Sector Strategies
o Aerospace “Reach for the skies” - £1bn to fund Aerospace Technology Institute;
match funded by industry
o Nuclear “The UK’s Nuclear Future” – £15m for new National Nuclear Users Facility
• £500m to support other key industrial strategy sectors in Budget 2013
• Life Sciences: commitment to sequence the whole genome of 100,000 NHS patients
• £125m invested in supply chains to encourage advanced manufacturing investment
Access to Finance
• First strategy update for the Business Bank; launching £300m investment scheme
• Funding for Lending scheme is encouraging the banks to lend more - if it can mobilize
the projected £60-£80bn
• UK Green Investment Bank operational since October 2012 - funded with £3bn
Procurement
• Publishing £84bn of Procurement pipelines
• Addressing strategic capabilities, e.g. tunnelling

9. Progress to date
Progress
Technologies
• Seven Catapult Technology and Innovation Centres
o High Value Manufacturing, Cell Therapy, Offshore
Renewable Energy, Satellite Applications are open Big data Space Synthetic Advanced
o Connected Digital Economy, Future Cities and technology biology materials and
nanotechnology
Transport Systems open by June 2013
• Support for “eight great technologies”
Robotics Energy Agri-
o £600m funding in Autumn Statement 2012 storage science
Regenerativ
e Medicine
• Patent Box introduced progressively from April 2013
will provide reduced corporation tax rate of 10% for
companies exploiting patented inventions
Skills
• Employer Ownership Pilot gives employers direct access to public investment for
training through a competitive fund
o £90m of funding to support 37 projects in the first tranche; more than matched
by £115m of employer contributions
o Second round closes 28 March 2013; prioritising industrial strategy sectors 9
• £6m for 500 people to study Masters level degrees in aerospace engineering

10. Progress to date
Progress
Technologies
• Seven Catapult Technology and Innovation Centres
o High Value Manufacturing, Cell Therapy, Offshore
Renewable Energy, Satellite Applications are open Big data Space Synthetic Advanced
o Connected Digital Economy, Future Cities and technology biology materials and
nanotechnology
Transport Systems open by June 2013
• Support for “eight great technologies”
Robotics Energy Agri-
o £600m funding in Autumn Statement 2012 storage science
Regenerativ
e Medicine
• Patent Box introduced progressively from April 2013
will provide reduced corporation tax rate of 10% for
companies exploiting patented inventions
Skills
• Employer Ownership Pilot gives employers direct access to public investment for
training through a competitive fund
o £90m of funding to support 37 projects in the first tranche; more than matched
by £115m of employer contributions
o Second round closes 28 March 2013; prioritising industrial strategy sectors 9
• £6m for 500 people to study Masters level degrees in aerospace engineering