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The industrial strategy acknowledges a fundamental truth about growth

It's time for the government to recognise that private businesses need help to thrive. 

When Theresa May created a new Department of Business, Energy and Industrial Strategy after taking office last summer, plenty of eyebrows were raised. Industrial strategy, it was widely remarked, was something attempted by the Labour governments of the 1960s and 70s – and it had dismally failed. British Leyland, Concorde and Delorean were the dead proof that governments were useless at "picking winners" and shouldn’t attempt to. What was the new Prime Minister thinking? 

A few commentators did observe that the concept of industrial strategy had in fact been revived at the end of the Labour government and in the early years of the Coalition. Gordon Brown and Peter Mandelson had successfully revived the motor industry in 2009-10 and initiated a new offshore wind manufacturing sector; Vince Cable and David Willetts had identified key manufacturing growth sectors and established new support systems for innovation. But they also pointed out that this had been largely abandoned by the next Business Minister, Sajid Javid, and was never embraced by David Cameron or George Osborne. 

So what did May mean? We are about to find out, when the government publishes its green paper on industrial strategy today. 

Among economic and business commentators, it has been widely assumed that this will again largely be about government support to manufacturing industry, particularly in the field of research and development. This is after all where the orthodox theory of "market failure" acknowledges that government intervention may be warranted. 

But this expectation is wrong. Under Business secretary Greg Clark, the government is taking a much wider approach. In fact the green paper will start from two far-reaching observations about the British economy.

First, take the UK’s low rate of productivity. This is not primarily a problem of the major firms in our remaining manufacturing industries. It is instead rooted in the small and medium-sized businesses in the service sectors, which employ 84 per cent of the British workforce. These are characterised by systematic under-investment in new technologies. 

Second, this is compounded by the huge disparity in productivity across the UK’s nations and regions. While London has the highest output per head of any region in Western Europe, more than a quarter of the UK’s regions rank among the lowest. Only if productivity is raised everywhere can it be raised in the UK as a whole. And only if productivity is raised, can wages be increased. So this is crucial to any attempt to help those "left behind" or "just about managing". 

The green paper will therefore make it clear, as IPPR has argued, that industrial strategy is not just about galvanising R&D and brand new innovation – though this is certainly important. It is about stimulating the much more widespread adoption of new technologies in all businesses - the service sector too. And it is not just about high-tech companies in the UK’s golden triangle between London, Cambridge and Oxford. It must happen in every region and nation of the country

In other words, the government looks likely to accept a vital truth - that industrial strategy is not a single strand of policy, but an approach to economic policy in general. It involves a fundamental recognition that firms and markets left to their own devices do not necessarily generate the optimum results for society as a whole.

Firms under-invest; they do not always adopt the most efficient technologies; they cannot on their own achieve the benefits of clustering together in regional centres; their investors’ horizons may be too short termist; they need infrastructure, skills, planning and other public policies to be aligned; they need to be encouraged to locate outside the existing growth centres. 

In other words, industrial strategy acknowledges that wealth is co-produced by the private and public sectors working together, and successful economies need both.

The chief theoretician of this understanding in recent years has been the economist Mariana Mazzucato, who has argued that the best way of driving investment in innovation is for government to set "missions" to address major social challenges. Just as the US moonshot programme generated innovation in a wide range of sectors, so modern missions such as decarbonisation, meeting the health and social care needs of an ageing population and the housing shortage can galvanise a new wave today. The government can use both "demand-side" policies (such as energy policy and procurement) and "supply-side" policies (such as in infrastructure and skills) to promote private sector investment.

In Britain industrial strategy has always been thought to be a left of centre economic idea, because it requires an active role for government. The Telegraph and Mail will no doubt tell Mrs May this week that it is all very misguided. But this is not how the rest of the world sees it. The most successful economies – Germany, Japan, South Korea, the Scandinavians – all work on the basis of public-private partnership to maximise productivity and achieve better distributed growth. All of them have higher productivity, and lower regional disparities, than the UK.

Yet there remain real question marks hanging over the government’s approach. Will the Chancellor cough up? A strategy with no money will be stillborn at birth. In particular, will sufficient resources and powers be given to regional institutions to support long-term economic growth outside London? Shifting the geographic pattern of investment will ultimately be the key test of the strategy’s success. 

The Business secretary is known to favour "deals" with industry to deliver the strategy, in the manner of the "devolution deals" with local government he developed in his previous Cabinet role. But will these be properly transparent, as the agreement which kept Nissan in Britain in the autumn was not? Will they simply favour the best business lobbyists, or can they represent a real compact of mutual obligations between public and private sectors?

The government has already acknowledged that it needs to recruit overseas negotiators to do new trade deals. It could usefully employ some outside experts to help with industrial strategy too. A good test of its commitment to strengthening public sector capacity is whether the government continue with its crazy sell-off of the Green Investment Bank

Ultimately, the key question may be whether the strategy will outlast Clark, who is probably the only Heseltinian member of the Cabinet beyond Mrs May who really believes in it. Labour’s Shadow Minister Clive Lewis, who has been talking intelligently about industrial strategy and has recently launched his own consultation, is no doubt already sharpening his critique. 

For the Prime Minister, the rationale for industrial strategy is clear. As it goes through the trauma of Brexit, the British economy will need to be seriously strengthened. We are about to see whether she can deliver it. 

Michael Jacobs is the Director of the IPPR Commission on Economic Justice and co-editor of Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth (Wiley Blackwell 2016). 

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We argue over Charlie Gard, but forget those spending whole lives caring for a disabled child

The everyday misery of care work is hidden behind abstract arguments over life and death.

“Sometimes,” says the mother, “I wish we’d let him go. Or that he’d just been allowed to slip away.” The father agrees, sometimes. So too does the child, who is not a child any more.

On good days, nobody thinks this way, but not all days are good. There have been bright spots during the course of the past four decades, occasional moments of real hope, but now everyone is tired, everyone is old and the mundane work of loving takes a ferocious toll.

When we talk about caring for sick children, we usually mean minors. It’s easiest that way. That for some parents, the exhaustion and intensity of those first days with a newborn never, ever ends – that you can be in your fifties, sixties, seventies, caring for a child in their twenties, thirties, forties – is not something the rest of us want to think about.

It’s hard to romanticise devotion strung out over that many hopeless, sleepless nights. Better to imagine the tragic mother holding on to the infant who still fits in her loving arms, not the son who’s now twice her size, himself edging towards middle-age and the cliff edge that comes when mummy’s no longer around.

Writing on the tragic case of Charlie Gard, the Guardian’s Giles Fraser claims that he would “rain fire on the whole world to hold my child for a day longer”. The Gard case, he argues, has “set the cool rational compassion of judicial judgement and clinical expertise against the passion of parental love”: “Which is why those who have never smelled the specific perfume of Charlie’s neck, those who have never held him tight or wept and prayed over his welfare, are deemed better placed to determine how he is to live and die.”

This may be true. It may also be true that right now, countless parents who have smelled their own child’s specific perfume, held them tightly, wept for them, loved them beyond all measure, are wishing only for that child’s suffering to end. What of their love? What of their reluctance to set the world aflame for one day more? And what of their need for a life of their own, away from the fantasies of those who’ll passionately defend a parent’s right to keep their child alive but won’t be there at 5am, night after night, cleaning out feeding tubes and mopping up shit?

Parental – in particular, maternal – devotion is seen as an endlessly renewable resource. A real parent never gets tired of loving. A real parent never wonders whether actually, all things considered, it might have caused less suffering for a child never to have been born at all. Such thoughts are impermissible, not least because they’re dangerous. Everyone’s life matters. Nonetheless, there are parents who have these thoughts, not because they don’t love their children, but because they do.

Reporting on the Gard case reminds me of the sanitised image we have of what constitutes the life of a parent of a sick child. It’s impossible not to feel enormous compassion for Charlie’s parents. As the mother of a toddler, I know that in a similar situation I’d have been torn apart. It’s not difficult to look at photos of Charlie and imagine one’s own child in his place. All babies are small and helpless; all babies cry out to be held.

But attitudes change as children get older. In the case of my own family, I noticed a real dropping away of support for my parents and disabled brother as the latter moved into adulthood. There were people who briefly picked him up as a kind of project and then, upon realising that there would be no schmaltzy ending to the story, dropped him again. Love and compassion don’t conquer all, patience runs out and dignity is clearly best respected from a distance.

All too often, the everyday misery of care work is hidden behind abstract arguments over who gets the right to decide whether an individual lives or dies. I don’t know any parents who truly want that right. Not only would it be morally untenable, it’s also a misrepresentation of what their struggles really are and mean.

What many parents who remain lifelong carers need is adequate respite support, a space in which to talk honestly, and the recognition that actually, sometimes loving is a grim and hopeless pursuit. Those who romanticise parental love – who, like Fraser, wallow in heroic portrayals of “battling, devoted parents” – do nothing to alleviate the suffering of those whose love mingles with resentment, exhaustion and sheer loneliness.

There are parents out there who, just occasionally, would be willing to set the world on fire to have a day’s respite from loving. But regardless of whether your child lives or dies, love never ends. 

Glosswitch is a feminist mother of three who works in publishing.