With the UK economy struggling to gain traction in the wake of recession, the Government needs a strategy for growth.
‘Rebalancing’ the composition of UK economic output – away from a reliance on finance and toward manufacturing – has long been discussed, but concrete policy ideas have been thin on the ground.
In this timely paper, Steve Coulter argues that the Government needs to take an institutional approach to driving UK manufacturing up the value chain. Coulter argues that Local Enterprise Partnerships should be led by business, freed from their lingering association with local government and strengthened. They should foster technology transfer between manufacturers, facilitate access to ‘patient’ rather than short-term finance, and coordinate industry training needs. In addition, government should consider raising the minimum wage as a tool to reduce the state’s effective subsidy of low-skilled manufacturing.