British prime minister Theresa May wants companies to spend more on research and investment.
Speaking at the Confederation of British Industry’s (CBI) annual conference today she called on businesses in the UK to do more, urging them follow the example of Germany and the US where businesses invest significantly more than the government in research and development.
For every £1 of research and development the UK government invests, UK businesses invest £1.70. In America, businesses invest around £2.70 and German businesses invest nearly £2.40. So I want you to work with us to drive up business investment.
Meanwhile, with the UK’s withdrawal from the European Union just 508 days away, May did not acknowledge the possibility of a no deal Brexit scenario — something that many now expect to happen due to the perceived deadlock in negotiations.
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Modern industrial strategy
A white paper on the government’s industrial strategy is due to be published later this month, and May provided an outline of its underlying principles.
While aiming to give businesses operating in the UK “as much certainty as possible”, May said the government will not intervene if it can help it.
“We can’t support every sector of the economy,” May said. “We want to avoid failed state interventionism of 1970s.”
However, May acknowledged intervention has sometimes worked.
“We strengthened the resilience of UK financial sector,” she said. “It now accounts for 7.2 percent of the UK economy and employs over a million people across the UK.”
Carolyn Fairbairn, the director general of the CBI said that given the pace of technological change, it is vital for the country to come together in support of the government’s industrial strategy:
As uncertainty continues to bite on the UK economy, there has never been a more important time for the UK to unite behind a ‘leapfrog’ industrial strategy. The aim is to enable British firms to compete and win in the new technology age. It is also urgent. Change is coming at lightning speed and the world won’t wait for Britain.