People blame (and, more rarely, praise) incumbent governments for the economy's fortunes. But, given the inexorable downward trajectory of manufacturing over decades under different administrations, does the complexion of Whitehall make any difference to manufacturing's competitive success? In the end, will it really matter to industry who wins the general election on May 7?
The answer is, of course, yes. Governments write the corporate agenda. They create the business landscape and set the economic climate to allow us to innovate (or not). There is, however, a fundamental flaw in our political system – the merry-go-round of a general election every five years tends to discourage politicians from engaging in long-term thinking and this stifles innovation.
In his seminal book, The Competitive Advantage of Nations, written 25 years ago, US economist Professor Michael Porter warned: "Most governments favour policies that offer easily perceived short-term benefits such as subsidies, protection and arranged mergers – the very policies that retard innovation."
For Porter, political policies that convey static, short-term cost advantages, but that unconsciously undermine dynamism, represent the most common and most profound error in government industrial policy.
But there is hope – a single policy that can be claimed by three separate governments and yet enjoys cross-party support. The industrial strategy – which was effectively started by Michael Heseltine, sustained by Peter Mandelson and built upon by Vince Cable – acknowledges and responds to the pressing need for governments to operate strategically over the long-term. Here is one policy, at least, that has escaped the short-term trap that shackles innovation.
It shows what can be achieved if a unified political will is there and is a tribute to three progressive politicians – one Tory, one Labour and one Liberal Democrat.
