The “Innovation Economy” – The Innovation Economy: Industrial Policy for the 21st Century

Six years after the collapse of Northern Rock heralded the Crash of New Labour’s ‘Borrowed Boom’, Britain’s economy is slowly beginning to recover. ‘Osbornomics’ is beginning to work.
The Innovation Economy: Industrial Policy for the 21st Century, a new paper released today by the Free Enterprise Group, written by myself and Kwasi Kwarteng MP, sets out a programme of bold policies to tackle this toxic legacy.
The big questions we have to ask today are these: how are we going to convince the international markets we have a plan for long term sustainable recovery that will pay off our debts? If we can’t borrow our way out, what are we going to sell to the rest of the emerging world to fuel our growth? How are we going to escape the long term structural deficit driven by our welfare state, NHS and Public sector pensions? What is the basis of the ‘New Deal’ we need with the next generation of entrepreneurs to persuade them to stay in the UK?
The Chancellor has asked whether we have to choose between Neo-Classical ‘Lawsonism’ or more interventionist ‘Heseltinism’, or whether we can reconcile them? We believe we must draw on and reconcile both instincts in a bold new Conservative economic programme to deal with the new challenges of debt, structural deficits and globalisation faced by our generation.
In our paper, we set out the basis of a modern Industrial Strategy that is unrecognisable from the discredited corporatism of the 1970s. We are not arguing for old-style “Industrial Policy” which contributed to our failures in the 60’s and 70s. The last thing we need now is to prop up failing industries, subsidise failing regions and try and run industry through Whitehall. To survive in the Global Race we need to unleash a new spirit of enterprise and innovation across the public and private sector.
This paper combines a raft of ideas being submitted by groups like the 2020Conservatives and Free Enterprise Group to the new Policy Unit, and illustrate the strength of the radical progressive centre of the New Conservative Generation. It is a paper designed to not only inform policy, but begin a debate on how we can continue to drive the British economy forward.
Our central message is that if we are to stand a chance in the global race, we need to embrace bold reforms to unleash an 'Innovation Economy' - an Arab Spring of enterprise and innovation across our private AND public sectors, to drive productivity and competitiveness.
This is an ambitious, modern and entrepreneurial vision of a rebalanced “Innovation Economy” in which the twin-forces of technology and enterprise are unleashed to fuel an ‘economic insurgency’ of competition, choice, accountability, free markets and entrepreneurialism in every walk of British life: across the public and private sector. (For my article on ‘economic insurgency’ click here.
It is increasingly clear that to get out of this economic crisis, a crisis born out of the Left’s bankrupt deceit that we could live on a borrowed boom fuelled by public sector spending, cheap credit and immigration, we need to use every lever the Government has to break open the too cosy corporate cartels too often propped up by Big Government. We need a renaissance of British invention, enterprise and global trade to get this country moving again. (For my article in the New Statesman on how our Aid policy can help us win the “global race”, click here.)
A new generation of Conservatives, many of us fresh from careers in business, are insisting that there is a role for the state in helping the UK win in the Global Race, but not through the stale corporatism and oligopoly cronyism of New Labour, but through unleashing a pro-enterprise spirit throughout the public and private sector. There can be no hiding places in the hunt to drive up productivity and trade to stop us becoming just another old and sclerotic European economy dependent on QE.
We are in a hole so deep that every part of our society has a responsibility to be more entrepreneurial. We don’t just need a Government for business; we need a more businesslike Government. We need to unleash the forces of technology and enterprise across the private and public sectors, to break open new markets, drive public service reform and modernisation, and boost productivity and competitiveness.
To read “The Innovation Economy – Industrial Policy for the 21st Century” please click here.