Exit strategy

An industrial strategy, not a manufacturing one. A message made clear by the new minister for business, not for manufacturing. Semantics means an awful lot, judging by Michael Fallon's awkward performance at WM's Manufacturing Outlook roundtable debate, designed to give grassroots managers a say on a blueprint announced with great fanfare by the government last autumn. "I don't understand what you're talking about," clipped Fallon, as Nick Bion of perforating specialist, Robert Bion, opened the event with a question on whether less-celebrated manufacturing sectors like his own would receive the same kudos as automotive and aerospace. "We don't have target sectors," replied the minister. "We don't pick out aerospace or automotive. The industrial strategy runs across all the sectors... I don't quite understand this distinction." It was a hostile opening from a minister who seemed on edge in the company of the supposed saviours of UK plc. Perhaps Fallon, who replaced Mark Prisk in the post last September, feared the unwelcome attentions of lexicographers as he explained the government's redefinition of the term 'industrial'. "We are working on a retail strategy within the industrial strategy – it will be a bit different to the others," he said. "My next meeting this morning is with the Association of Convenience Stores." Nuclear, construction and defence are also target sectors for an industrial strategy some dreamed would centre on manufacturing. In reality, the boundaries are much more blurred. Fallon told delegates: "It's not schematic. It's not ten neat little boxes because these industries aren't all the same. And it comes alongside all our other work on deregulation and improving access to bank finance." Imagine the industrial strategy as a galaxy. Manufacturing is just one of many component solar systems, with our 14 sub-sectors the equivalent of individual planets. It's a model that left some feeling a little lost in space. "It's vague," said Adrian Edwards, production director at shelving and storage manufacturer, HL Display. "There's just not that much structure to it is there? There's no overarching philosophy." Yet Fallon was adamant that the government's role was to administrate, not inspire. He said: "My job is to follow through the industrial strategy and get each of the sectors as they exist to take more ownership of these issues: SMEs, access to finance, more coherent export strategy and the skills gap." It was no coincidence that the manufacturing sectors taking the lead on these issues were the ones perceived to be receiving preferential treatment, the minister added. "Why do aerospace and automotive do quite well out of government? Possibly because they're well organised." The sectors also thrive because they have forged collaborative partnerships with government, added Fallon, who went on to praise the Aerospace Growth Partnership and Automotive Council models, which see rival companies working together on key challenges. "It's not just a list of things the big guys want from government," Fallon commented on the partnerships. "We make the big guys take more ownership of issues affecting the smaller ones." The government's impartiality over company size was something the minister was keen to highlight. "I want to knock on the head this idea that we're just there to help the big companies," he stressed. "All the things we've being doing in the last few months are to help the smaller end. The reintroduction of capital allowances... the additional money for the advanced manufacturing supply chain initiative and the regional growth fund money." Further aid was imminent with a £1.5bn fund to help fledgling exporters and an SME-focused industry bank outlined in the Autumn Statement, he stressed. "I thought last week's mini budget, for manufacturing, was one of the best we've had. Another round of the regional growth fund, £120m for the advanced manufacturing supply chain – which only helps the small guys – capital allowances and a third of the business bank money just to the SMEs." But behind the headlines you will find reams of oppressive red tape, according to entrepreneurs. "A lot of those systems and procedures you mention are onerous for a small company," pointed out Richard Brown, operations director at Hi Tech Mouldings. "I want to see these schemes getting through to you," responded Fallon. "That's my ambition for 2013. There's no point us making these millions of pounds available and making speeches about it, unless the money gets out the door." A huge pair of scissors will be on its way to Victoria Street as Fallon and his Department for Business colleagues aim to earmark 3,000 regulations for the scrapheap this year. "I've set myself a target. We'll probably miss it, but I'm going to try." The same daring was distinctly lacking when the minister was asked to name the major objective for UK manufacturers in 2013:?"Stick with it." To a room full of manufacturing managers bred on SMART targets, Deming, Goldratt and Cox, the alarm bells were ringing. "We don't know what the government is prioritising. The industrial strategy is not a strategy because it isn't linked together," said Colin Larkin of Case New Holland in the post-meeting digest. Bion perhaps summed it up best: "You have a strategy to deliver a goal, but I don't think there is a goal. Four things we learned about the industrial strategy 1 It's broader than you think The industrial strategy is like a Russian doll. Numerous smaller blueprints stack up inside one big masterplan. So manufacturing, retail, defence and construction and sub-sectors will all set themselves unique goals. However, some common traits will include a collaborative approach on R&D, a coherent export strategy, closer support of the domestic supply chain, better access to finance and improving skills, all delivered in partnership with Westminster. 2 You need a strong sector presence Manufacturing sectors with a united negotiating body – such as automotive – can expect a far more influential role in setting the strategy. Factions and in-fighting will water down your message to Westminster and undermine your sector's ability to collaborate on wider issues like R&D or skills. 3 You can bank on it An all-new business bank will be launched to bring down barriers to accessing finance. The institution will inject long-term capital into markets, simplify access to government financial schemes and advice. The bank will not have a retail presence and is likely to provide services through existing banks. 4 Make it in Great Britain: the sequel Last summer's Make it in Great Britain campaign, which promoted UK-manufactured products at the Science Museum during the Olympics, is set to keep on running. Fallon plans to take the exhibition to towns and cities outside of the capital this year. Funding to support the roadshow remains a challenge, the minister told delegates. He also called for more grassroots manufacturers to try and inspire to youngsters as industry champions.