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Brexit: Planning a fresh start at the national level

by David Howell

The United Kingdom has been trying to plan its industrial future in new post-Brexit conditions and new world conditions. A government document called “Building a Britain for the Future” has been issued and there have been many references to past attempts at national plans and strategies in the U.K. over the last 50 years, most of which have had limited success.

Guidance has also been sought from abroad and from successful programs of industrial renewal such as in Germany after World War II, and in Japan twice over — once in the 19th century with the Meiji Restoration and once from the ashes of World War II to global industrial pre-eminence.

The question for Britain is whether this kind of amazing national revival and success can be emulated in the age of globalization and digital revolution. Producing a blueprint of aims is one thing, implementing it is quite another. Updating the physical infrastructure is always a problem in a country like the U.K., where the landmass is so limited and every centimeter of countryside environment rightly treasured for its undoubted beauty. And raising educational standards, especially for technical education and training, to the levels required in the new age is also a major ongoing challenge. These are not new issues and they are being resolutely addressed in the U.K. on a continuing basis, as in many other countries.

But there are now at least two much deeper problems for today’s national industrial strategists that planners in previous centuries did not have to face. These new challenges, requiring completely new thinking about economic progress, are coming straight at struggling national governments, in this instance the British government, from both the grass-roots below and from global pressures above.

From below come the demands of an increasingly informed and connected populace — in its entirety — to be fully integrated in the future-building process and to share fully in its benefits. The old talk about winners and losers will no longer do in a modern society.

Progress today is expected to permeate the whole social structure, not just some privileged workers and savers, but the lives and welfare of all in the community, including that sector which the economists and planners in the past routinely neglected, namely the unpaid armies of homemakers and family builders — mostly women — without whom no one would ever get out to work in the first place. Because their output cannot be measured by income flows and statistics, despite generating major value, they have been “left out.” But not any more. The information revolution will no longer allow it, and governments ignore it at their instant peril.

From the other direction, so to speak from above, comes the brutal fact that a nation like the U.K. now has to compete not just with a few rival powers but with the whole globe. Forget old theories of competitive advantage and national prowess and specialization. Forget simple models of importing raw materials and exporting finished goods. Products and parts of products can be made everywhere. Services can be started up anywhere. Innovation, enterprise and cutting-edge technology can blossom (and does) almost anywhere on the planet.

And if that is not challenging enough there are the vagaries of a now completely globalized financial system which can dry up investment flows in almost any reasonably open country and strangle industrial recovery programs at birth.

In these conditions the very idea of a distinct, homegrown national industrial strategy looks far more problematic than in the past. It demands a novelty of approach that taxes the best and most far-sighted national leaders. It becomes a matter not so much of winning over or getting ahead of rivals as of surviving securely in a sea of new unknowns and uncertainties.

In effect the national “strategy” comes down to being agile, smart and socially balanced enough as a society to respond to the sheer power of global technology and global networks. Seen in these terms the challenge becomes to rethink social and economic priorities in radical ways. Rapid adaptability, revolutionary methods of organizing enterprise and spreading wealth to all regions and all parts of society, much higher attention to grass-roots community initiatives and to the needs of the home and the family, smarter public services and above all, the best possible levels of education of all kinds and for all age groups — these become the primary goals of policy.

This may be the industrial strategy model of the future that really works. And surprisingly it may be the kind of policy upheaval that proves more practical and achievable than the grand planning of the past.

Because the U.K. was the first into the steam industrial age it was always in danger of being left behind by other countries as new waves of technology swept in elsewhere.

But being the laggard in the old order could give a clear advantage in the totally new one taking shape. There are even small signs that the old political lineups and ideological battles between political parties, which paralyzed the U.K. in the past, could be giving way to a new consensus on how to proceed.

Some will say that is wishful thinking. But if the wishes are realistic and well-focused and the thinking clearer than in the past, who knows what might yet emerge.

David Howell is a Conservative politician, journalist and economic consultant. He is chairman of the House of Lords International Relations Committee.