28 September 2016
Business leaders in the Engineering and Technology sector are voicing concerns that the Government’s proposed industrial strategy will flounder without the right levels of Government and private investment commitment. Of particular concern are a number of investment streams currently in place under EU arrangements, which are now in doubt following the Brexit decision this summer. These include seed funds and grants for smaller companies.
The warning comes at a time when the industry awaits with anticipation major announcements about the new industrial strategy in this year’s Autumn Statement.
Attendees at the policy forum, which was hosted last night by the Institution of Engineering and Technology (IET) in London, included business leaders from major engineering and technology companies across the UK, investors and advisers, as well as Dr Ruth McKernan CBE, Chief Executive of Innovate UK, Naomi Climer, President of the IET, Vernon Soare, Executive Director of the ICAEW and senior officials from the Department for Business, Energy & Industrial Strategy, the Department for International Trade, UK Export Finance and the Intellectual Property Office.
The joint initiative by the IET and the ICAEW’s Corporate Finance Faculty has already raised important considerations for the UK government’s new Industrial Strategy, based on research and interviews with the founders,CEOs andCFOs of leading high-technology businesses across the UK. There will be a pressing need post-Brexit to boost public and private investment, filling the gap between R&D funding and the long-term finance that capital-intensive engineering businesses urgently require to scale up.
Warren East CBE, Chief Executive of Rolls-Royce CBE, commented: “There’s a great opportunity for the UK’s engineering sector to increase its contribution to national productivity and competitiveness. The Brits are pretty good at it.”
Naomi Climer, IET President, said: “There has never been a more important time to support the growth of UK engineering and technology to make us globally competitive. The sector is the biggest of all UK exports and it is at the heart of Britain’s international competitiveness, its R&D and innovation. We want to see it at the heart of the Government’s Industrial Strategy, with the right levels of investment and a particular focus on supporting the SMEs that are so important to our success as a global innovation centre.”
Michael Izza, ICAEW Chief Executive, said: “This important project aims to stimulate discussion about how the UK could boost investment and expert business advice for advanced engineering and innovative technology companies at a crucial time for the economy. As the very different businesses profiled in the discussion paper exemplify, the sector is vital for the economic prosperity and competitive future of the UK in the fast-changing global context.”
Among those interviewed for the paper was Steve Turley, Chief Executive of Perpetuum, which advances railway and fleet management. Mr Turley echoed the concerns of many of those interviewed: “Given the new situation on Britain, we now have to ask what money will be invested in technology based small companies. Are younger companies just going to be told to get on with it, and possibly fall over? Or is there going to be a new source of funds that’s essentially going to replace what the EU was doing? Our competitors in Europe will still be getting this funding. How’s the UK government going to fill that funding gap?”
Questions raised in the paper included:
David Petrie, Head of Corporate Finance, ICAEW commented: “Engineering is vital for Britain’s economy. Taking high-tech from early-stage R&D projects into production is capital-intensive and requires sophisticated, medium-term investment. A new industrial strategy should combine effective fiscal measures, such as R&D tax credits, with a variety of public and private funding for businesses at various stages of growth.”
Further information can be found at www.theiet.org/industrialstrategy.