Friday, 9 July 2010

Vince Cable's Industrial Policy

I am pleased to note that Vince Cable the UK’s new Business secretary is adopting a more market orientated industrial policy than we have been used to in recent years. Mr Cable has describe an industrial policy that funds public goods such as, research, education and infrastructure but does so in a way that is market led rather than state led.

While recognising that the state has an important role in supporting areas and sectors where the UK has a competitive advantage, Mr Cable is rolling back the support offered to individual firms and factories. Instead the department for Business favours investing in the support for increasing the UK’s human and intellectual capital. In the long term backing training and research in the UK is the only sustainable way of increasing employment and growth in the UK.

Vince Cables Business Department is also continuing the push to force the nationalised banks to increase their levels of lending, this is very welcome. The current lack of available credit in the UK economy is stifling the Critical SME sector that will be vital for bringing down levels of unemployment.

Vince Cables new approach to Industrial policy in the UK is very welcome as it positions the private sector at the heart of the British economy while not forgetting the important areas in which the state needs to support the wider economy.

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