Margareta Pagano: Government cannot ignore this demand to guide British industry

Midweek View: The Coalition has done far more than its predecessors to put manufacturing at the top of the agenda

Sir John Parker is one of Britain's foremost industrialists who has run many of our biggest companies and is the former chairman of energy giant National Grid and the chairman of mining colossus, Anglo-American.

A naval architect by training, he cut his teeth at Harland and Wolff, the Northern Irish shipbuilding yard, where he was sent by Lady Thatcher in 1983 to take it private. He stayed on for a decade to turn it around, a tough job which involved dealing with terrorists as well as fiery unions and has been at the sharp end of business ever since.

Such a pedigree doesn't necessarily predict a man's politics, but Sir John does veer to the right – in fact, he jokingly confessed to me not so long ago that he's somewhere to the right of Genghis Khan.

So when Sir John calls on the Government to set the framework for a clear and long-term industrial strategy to "guide and enable UK plc", as he did yesterday, then we should all jump to attention.

In his view, if we are to achieve our economic ambitions of growth, government has a critical leadership role to play that needs to be more than just "cutting overheads, important as that is".

While the Coalition has done far more than its predecessors to put manufacturing at the top of the agenda and promote UK plc – a fact Sir John acknowledges – he argues that it's not enough. He wants a more dynamic approach, one in which the Government helps set a 20-year framework within which it works with industry, universities and schools on "picking winners". For example, the UK leads the way in aerospace, bio-medical engineering, pharmaceuticals and mathematical modelling to name a few, and so we need to ask, are we putting all the right infrastructure in place for this to continue? And are those in the supply chain being trained?

When you run a plc you do have to pick winning strategies, select winning people and search for winning products all of the time, Sir John says. So why should UK plc be any different?

It's the right question. But picking industrial winners has always been a hoary chestnut for UK governments; left and right. On the left, the problem has been that the winners picked by Labour were too often losers, while those on the right have shivered at the word strategy because they were so opposed ideologically to anything that smacks of state intervention.

But times have moved on and you could argue that both parties are stuck in a 1970s timewarp which is past its sell-by date; industry is far more sophisticated today, innovation is faster and needs more R &D backing and the workforce in a high-tech economy needs to be more skilled than ever. That takes co-ordination and coherence.

It's certainly not an issue that bothers competitors such as Germany and China which have vast surpluses which they use constantly to back innovation and research. Just look at how both countries are throwing money at developing renewable energy technologies.

There's another issue which gives a neat twist to the debate – proof the state is not always a dead-hand but can be entrepreneurial too. It was a public sector grant from the National Science Foundation that funded the algorithm used by Google, while here it was the Medical Research Council which created the new generation of molecular antibodies.

Sir John's call to arms came at a seminar he hosted yesterday as president of the Royal Academy of Engineering on how engineering can boost growth.

Also there were Nigel Whitehead, group managing director of BAe, Aston University's Professor Julia King, Jonathan Flint of Oxford Instruments and Chi Onwurah, shadow minister for innovation and science. They agreed that government should work closer with industry and specifically with universities to identify new areas of growth, and align the needs of industry with appropriately skilled engineers.

And the best way? By investing in human capital. It's here government can be most effective as it can work with universities and schools to influence the shape of education against the industrial landscape.

It's taken a while, but engineering is at last being appreciated as one of the most honest and noblest of the professions; it's our engineers who design the trains we travel in, the bridges we drive over, as well as the latest medical devices, and we've been appaling at honouring them.

If government is serious about growth it should do two things pronto – lock Sir John into the Cabinet office and put him in charge of devising an "industrial plan", and then give qualified engineers the status of doctor. That should sort it.

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