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Not picking winners, picking winning sectors

Authors: The Work Foundation Stephen Overell

29 September 2009

Due to media conventions, the phrase “industrial activism” has to be followed by the denial that it is “about picking winners”. But activism implies some kind of criteria about when and how the government might intervene – a means of “picking winning sectors” if you like. 

According to Pat McFadden, the employment relations minister, speaking at a Work Foundation/EEF fringe on the future of the manufacturing sector, much has changed since the Mandelson comeback. One of them is language. With the centre left in a Sen-like trance about “capabilities” at the moment, so government activity in industry must enhance “national capabilities”. 

What this means remains a little murky, but the tacit understanding lying behind it, is that up until 2008, too much attention was placed on the City – the root of current agonies - and not enough on the “real economy”, in which manufacturing will always have a special place. Indeed, the sector was entirely absent from ministerial speeches, as if to have a knowledge economy you couldn’t make real things. The sector may be suffering in the recession, but politicians appear to have rediscovered it. 

As Gordon Brown put it in a recent Prospect article, the UK needs to “rebalance [the] economy, building new strengths in high value-added modern manufacturing … alongside a properly regulated, but less dominant, financial services sector.” 

Another thing that has changed, says Mr McFadden, is that entirely new types of conversation are happening in Whitehall as ministers, mandarins, businesspeople, RDAs and councils gather to answer an apparently new question – how can government support employers in different contexts to make things happen? Expressed like that, however, it sounds as if it needs another denial that it is “not about smoke-filled rooms”.

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