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Media centre home > Feature and comment > Industrial Strategy must address regional disparity

Published: 01/11/17

It's clear that the world is changing. The impact of the financial collapse in 2008 and the recent decision to leave the European Union constitutes a radical shift in the economic and social framework for industrial policy.

The UK needs new thinking in order to address long-term economic challenges including poor productivity, unbalanced regional growth and a weak track record in translating outstanding knowledge creation into inclusive wealth creation.

Therefore today's publication of the final report from the Industrial Strategy Commission is important. The independent inquiry into the development of a new, long-term industrial strategy for the UK makes a number of sensible recommendations. But, a fundamental recognition that 'place' matters is particularly welcome.

Work undertaken by researchers at Sheffield Hallam University shows that a purely sector based approach to investment would not deliver inclusive growth. The 'Industrial Strategy and the Regions' report from the Centre for Regional Economic and Social Research (CRESR) demonstrates that a narrow sectoral focus would only widen regional divides.

As the Commission itself highlights, the performance of the UK economy is held back by our high degree of regional imbalance. These variations in productivity are particularly stark and reveal a predictable pattern. London and the South East are well above the national average, on a par with economic rivals like France and Germany, whilst productivity everywhere else lags well behind. Sheffield and other former industrial powerhouses are amongst the least productive in the UK.

You could argue that this is down to a long term failure to address the industrial decline many areas outside the South East faced in the 80's. Since that time tax revenues from a supercharged financial industries sector in the City of London has fuelled public spending and allowed this imbalance to go largely unchallenged. However, the economic crash and advent of Brexit means it is more critical than ever to tackle this fundamental flaw in the UK economy.

So whilst investing in priority and emerging sectors is part of the solution, if the Industrial Strategy is to have a truly lasting transformative effect, then the importance of place cannot be underestimated. In order to achieve inclusive growth and rebalance the UK economy, place should be the over-arching framework on which the strategy is based.

Within many of the regions which the industrial strategy should be focused upon universities are in the vanguard of those already attempting to address these long term challenges. Sheffield Hallam contributes nearly £0.5 billion to the local economy, working with more than 2,000 employers every year, through our research, innovation and graduate recruitment opportunities.

An example of our impact and collaboration can be demonstrated through the Sheffield Innovation Project, which enables more than 200 SMEs from across the region to access free academic expertise and facilities to stimulate innovation and deliver new products and services into the market.

However, with Government support facilitated through the Industrial Strategy, we can achieve even more to help redress the productivity imbalance within our region, in places like Sheffield, Rotherham, Barnsley and Doncaster.

In our response to the Industrial Strategy the University outlined a range of capabilities and potential opportunities from our research, innovation and industrial partnerships. In particular, our plans for a Health Innovation Park align with the Commission's call for policy to focus upon driving demand for innovation in areas such as healthcare.

We are already investing £14m for the construction of an Advanced Wellbeing Research Centre (AWRC) that will deliver health innovations, bringing together expertise from academia, industry, and the medical profession to create the most advanced research and development centre for physical activity in the world - attracting jobs and investment.

These innovations are explicitly intended to generate public health benefits for the entire population, through increasing levels of physical activity for people with sedentary lifestyles, helping those who are already active exercise more effectively, and improving the performance of elite and professional athletes.

The facility is the centrepiece of Sheffield's Olympic Legacy Park – a joint venture between Sheffield Hallam University, Sheffield Teaching Hospitals NHS Foundation Trust and Sheffield City Council - set in the city's Innovation District within a disadvantaged area.

However, we are developing a longer term plan for a Health Innovation Park for the site, of which the AWRC is the first step. This will build on our expertise to be a pioneering centre for practical innovations to improve health and well-being: intervening to promote health as well as to stave off ill-health. This is exactly the type of development and vision which any Industrial Strategy should help realise.

Through tackling barriers and providing the right conditions for success the Industrial Strategy could help unlock the potential of places like Sheffield. But this will only be achieved by identifying potential and creating opportunities for the future, not just concentrating on short-term existing success. Along with a commitment to place, a bold long-term vision and dedication is required.

Professor Chris Husbands, Vice-Chancellor of Sheffield Hallam University

The author:

Professor Sir Chris Husbands, Vice-Chancellor

Professor Husbands is Vice-Chancellor of Sheffield Hallam University.

"If the Industrial Strategy is to have a truly lasting transformative effect, then the importance of place cannot be underestimated."