Will the next Industrial Strategy benefit rural areas? 

Industrial strategies provide overarching blueprints for the economy, helping Governments to achieve economic, social and environmental goals. Since 2010, there have been 11 different economic and growth strategies published in the UK by successive Governments. With the current Government to unveil its Industrial Strategy, what does it need to do to be effective, and what will it offer rural communities? Jessica Sellick investigates. 

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The UK Government has outlined its vision for a modern industrial strategy in a Green Paper, ‘Invest 2035’, published in November 2024. Further details will be provided in the Industrial Strategy White Paper. The Strategy is a key component of the Government’s broader mission to ‘kickstart economic growth’ and ‘raise living standards in every part of the United Kingdom’. What practice and lessons can be drawn from the UK’s past Industrial Strategies, how will the Government ensure the next Industrial Strategy achieves maximum impact, and what implications will it have for rural communities?  

What is an Industrial Strategy? According to the Institute for Public Policy Research (IPPR), it is an ‘economy-wide planning process, combining industrial policies, to achieve economic, social, or developmental outcomes…set[s] a framework that allows for the use of specific policy instruments within industries…[and is] The purpose-driven coordination of economic policy’’. The Institute for Innovation and Public Purpose at University College London (UCL) describes ‘mission-orientated strategies directing the economy towards solving societal challenges’. Indeed, a roundtable at UCL back in 2016 produced the following summary:

‘Industrial Strategy should be seen as a framework rather than as a collection of specific industrial policies…The purpose of Industrial Strategy should be to identify what is societally necessary and beneficial, and thus to align with other key national strategies’.    

For the Institute for Government (IfG), it is not as simple as accepting that the state’s actions can improve the economy, rather it is a ‘concept [that] captures the idea that a government should plan these interventions to some extent, consciously, towards a desired end-goal relevant to the economy’.  While for the Organization for Economic Co-operation and Development (OECD) in its industrial policy framework it comprises strategies ‘focused on subsets of the economy they [governments] deem to deserve support’. 

In Britain the concept can be traced back to Robert Walpole, whom in 1721 introduced protections for infant industries by increasing tariffs on foreign competition. Walpole also lowered the duties on raw materials needed by British manufacturers. A trend towards freer trade began in the late 18^th century amid a growing belief that cheap imports were the key to prosperity. This resulted in the introduction of an income tax act in 1842 to provide compensation for initial losses in Government revenue as tariffs came down.  By the 1930s the focus of industrial policy had moved on again, with a Coalition Government introducing a strategy of minimising competition, encouraging cartels and protecting businesses behind new tariffs. The 1934 Special Areas Act identified South Wales, Tyneside, West Cumberland and Scotland as areas with special employment requirements, with these areas seeing investment in infrastructure. 

Post war, the Government sought to hold onto Britain’s traditional industries (textiles, steel and shipbuilding) with mergers to create nationalised and subsidised industries encouraged – and new bodies such as the Ministry of Technology and Industrial Reorganisation Corporation were created. The need for an Industrial Strategy was reinforced by Tony Benn when he was Minister for Industry in the mid-1970s. Then, a Conservative led Government in the 1980s sought to break up nationalised industries and leave things to the free market. Gordon Brown, during the financial crash of 2008 and recession, led calls to rebalance the economy from an over-reliance on financial services towards industry and manufacturing. George Osborne upon becoming Chancellor described this policy as the ‘march of the makers’. Sir Vince Cable (business secretary in the Conservative-Liberal Democrat Coalition Government) singled out eleven industries with whom the Government wanted to build long-term partnerships – leading to the establishment of eleven Sector Councils. In a speech back in 2012, Sir Vince explained why all Governments should have an Industrial Strategy:

“The government shapes the British economy with its decisions every day. It makes many decisions about skills and universities, on research, on technologies, and on infrastructure. Through what it buys, and how it goes about buying it, the regulations that exist, the markets it oversees, and tax policy. All of these send messages to the economy. We can have an Industrial Strategy by default or by design”.   

A speech by Greg Clark back in July 2016 suggested Industrial Strategy should be a number of things: from providing a long term, predictable and sustained approach to policy making, through to creating an environment in which businesses can be founded, expand and prosper; and where connections are made between Government policy and business decisions, industries and places, research and practice. At the same time, Theresa May in launching her bid to become Prime Minister spoke of her determination for: 

“An economy that works for everyone, so we don’t just maintain economic confidence and steer the country through challenging times – but we make sure that everyone can share in the country’s wealth…[May pledged to introduce] a proper Industrial Strategy to get the whole economy firing”.  

During the vote to leave the European Union, a modern Industrial Strategy was positioned as a rationale for a new vision for our economy, and as an opportunity to ask ourselves what kind of country we want to be. Whereas the David Cameron led Government’s productivity approach focused on improving the overall prosperity and growth of the nation, Theresa May’s Industrial Strategy had a redistributive mission on changing the way the country works and the people for whom it works. More recently, the election of a Labour government in 2024 has seen a focus on harnessing the power of the state to ‘support and shape’ the UK economy with the promise of a new Industrial Strategy which will support regional growth, net zero and economic security and resilience. 

While there are many definitions and approaches to an Industrial Strategy, they all share in common a focus on state intervention. All of this opens up a series of debates around the role Government plays in the economy: should Government be interventionist or leave the economy to the free market? Should Government focus on specific companies, sectors, markets or only on the barriers deemed most important to the economy overall? Should Government focus interventions on labour intensive products and services or in higher productivity industries? Should Government only intervene where there is market failure? And what about (re)nationalisation – is this in the public interest and a legitimate use of state funding? 

What is the UK’s policy? In September 2023, the Labour Party published a policy paper, ‘Prosperity through Partnership: Labour’s Industrial Strategy’. In the foreword, Jonathan Reynolds, Shadow Secretary of State for Business and Industrial Strategy said: 

“Our new Industrial Strategy has partnership at its core because partnership is how we ensure strong, secure growth and a fairer, greener future…A Labour government will provide a clear and consistent policy framework that businesses can trust and prosper within. Our Industrial Strategy has four central missions: delivering clean power by 2030, caring for the future, harnessing data for public good and building a resilient economy…Labour’s clear driving mission for economic growth is fuelled by a suite of future facing, costed, practical policies. These policies will support your ambitions, inspire creativity, devolve money and power to where it’s needed, and secure prosperity for every part of the country”. 

In November 2024, the Government launched a Green Paper: ‘Invest 2035: the UK’s modern Industrial Strategy’. In the foreword, Rachel Reeves, the Chancellor, and Jonathan Reynolds, the Secretary of State for Business and Trade, outlined plans to develop: 

[…] a credible, 10-year plan to deliver the certainty and stability businesses need to invest in the high growth sectors that will drive our growth mission…To capture the growth the UK so desperately needs, we need a modern Industrial Strategy to share in the next decade’s growth opportunities. The Industrial Strategy will provide a launchpad for businesses…this government believes it is our role to provide the certainty that inspires confidence, allowing businesses to plan not just for the next year, but for the next 10 years and beyond…To put an end to the policy merry-go-round, we are going to establish a statutory Industrial Strategy Council, hardwiring stability and long-termism into our plan from the start”. 

The Green Paper included proposals to: 

• Target eight ‘growth driving’ sectors: advanced manufacturing, clean energy industries, creative industries, defence, digital technologies, financial services, life sciences, and professional and business services.  
• Target places with high-growth potential, including city regions, regional clusters and strategic industrial sites. 
• Work in partnership with businesses, trade unions and experts to create a ‘pro-business environment’. 
• Establish an Industrial Strategy Council to monitor the implementation of the strategy.  

The Green Paper is one of the five national missions the Government has set as its mandate: kickstarting economic growth. Through the Industrial Strategy the Government is seeking to drive economic growth that is ‘sustainable, inclusive and resilient’. Here the Government is making the case for more active state intervention but carefully targeted at the areas with the largest growth potential. 

Since the publication of Invest 2035, the Government has established an independent and non-statutory Industrial Strategy advisory council to advise it on the development and delivery of the Industrial Strategy and to monitor progress on its objectives. This is not new; in the 2017 Industrial Strategy the Government established an Industrial Strategy Council between 2018 and 2021. The Government is currently identifying subsectors within the eight priority sectors and will be producing a series of sector plans. The latest Industrial Strategy is expected in summer 2025 alongside the Spending Review. 

IPPR produced a timeline showing between 2010 and 2023 there have been 11 growth plans or industrial/economic strategies, 9 business secretaries, and 7 Chancellors of the exchequer. While many of the same themes appear across these documents, there has been a shift in Government approach. Beginning with New Labour (1997-2010) where the approach consisted of horizontal policies which shifted to ‘industrial activism’ after the 2009 financial crisis. The coalition government (2010-2015) went from non-interventionist (because of public spending cuts) to a focus on 11 key sectors they saw as ‘strategically important’, 8 key technologies and catapult centres. The Conservative government began with an ‘industrial approach’ (2015-2016) before moving to an Industrial Strategy (2017) which was a mix of horizontal, sectoral and mission based policies – all framed around 4 ‘grand challenges’: AI and data, ageing society, clean growth, and future of mobility. This also led to the development of Local Industrial Strategies. Between 2021 and 2024, the Conservative governments moved from producing a ‘plan for growth’, which focused on horizontal measures (infrastructure, innovation and skills) to adopt a more sectoral focus. 

Outside of the UK, there is renewed interest in industrial policies. For example, a survey by the World Economic Forum (WEF) in May 2023 found 75% of chief economists were expecting industrial policy to become a widespread global approach to economic policy over the next three years. Respondents highlighted a number of concerns with this development, cautioning that it could deepen geoeconomic tensions, stifle competition and lead to an increase in sovereign debt levels. Chief economists described how business strategies were adapting to geopolitical fault lines, prioritising resilience over efficiency, diversifying their suppliers, and increasing their focus on environmental sustainability. Indeed, the OECD has underlined how Governments have used industrial policies to help them recover from economic shocks, such as the global financial crisis and COVID-19 pandemic; address or adapt to climate change; increase the resilience of supply chains, reduce dependence on other countries, and/or to respond to geopolitical tensions and enhance national security. 

It is interesting to note that in the 18^th and 19^th centuries the United States and Germany took up parts of Britain’s industrial policy; in the 19^th century Japan imported industrial policies and institutions from Germany; and in the 20^th century China adapted industrial policies from Japan. Back in 2022, the OECD published an analysis of industrial policies published in nine OECD countries: Canada, Denmark, France, Ireland, Israel, Italy, the Netherlands, Sweden, and the UK. The analysis found these countries were spending a large proportion of their GDP on industrial policies, focused mainly on sector-based support, particularly in energy, transport and manufacturing. In the 21^st century, what can we learn from how other countries produce industrial strategies and implement industrial policies?  

All of this work has led some commentators to distinguish between horizontal industrial policies that seek to achieve change across the economy as a whole, and vertical industrial policy that seeks to achieve change within specific sectors. Some strategies are viewed as mission orientated in that they are tailored to a set of objectives and others are technology-focused to drive the update and adoption of artificial intelligence. While others are place-based and aim to alter the regional distribution of industrial activity to deliver economic outcomes in particular places – making the case for investing in big cities rather than specific sectors. However, other strategies are targeted at specific sectors or groups of related sectors. Recent emphasis has been placed on economic recovery from the impact of the coronavirus pandemic, and on developing green industrial strategies which support the transition to net zero. The OECD describes how these different types of strategies may in some instances overlap – with green or technology-focused industrial strategies including sectoral or mission-orientated strategies for example. Similarly, place-based policies can also be sectoral or mission-orientated.   

What are the essential components of an Industrial Strategy? The current Government has adopted a ‘mission-driven’ approach, where the Department for Business and Trade (DBT) will ‘own’ the Industrial Strategy, and other departments will be responsible for some sectors and policy interventions. In March 2025, the National Audit Office (NAO) published a report examining whether the DBT is well-positioned to secure impact from its support for priority industry sectors, including how it works with other departments and delivery partners. The NAO describes how:  

“DBT was created to provide more joined-up support for industry, a ‘front door’ to business, and deliver economic growth. It has made progress in developing its support for industry, including consolidating teams, reviewing capability needs, and engaging with industry to develop sector plans. However, there are factors that limit the effectiveness of its approach. DBT needs to be able to make informed decisions about where to deploy its resources, greater transparency over decision making, such as why it intervenes in a particular sector at a particular time, and a greater focus on evaluation to know what works. To maximise the impact of the forthcoming Industrial Strategy, and contribute to the government’s growth mission, DBT will need to clarify its role within the wider system, and address identified weaknesses. The success of the Industrial Strategy will depend on whether DBT and other government departments can work effectively together, and with industry, to prioritise and target interventions to drive the desired economic growth in the priority sectors, and across the whole economy”, (page 13). 

The NAO considered the aims and objectives of sector-based support within the DBT in relation to the new Industrial Strategy and Industrial Strategy Council. In their findings the NAO highlight how: 

• The Government’s Industrial Strategy will provide an opportunity for the DBT to develop its approach to supporting industry, and by consolidating business-focused functions across Government. DBT has good foundations to deliver the objectives of an Industrial Strategy. 
• DBT can build on its understanding of, and plans for, the sectors it supports to help develop the Industrial Strategy. Internally, DBT has produced a series of sector views and action plans to drive the priorities and focus of each of its 10 sector teams. These provide a helpful evidence base. 
• DBT does not have a framework to demonstrate how it balances different metrics of growth when it makes decisions to support industry. Indeed, DBT work requires trade-offs including Gross Value Added, productivity in small businesses, regional growth, economic security and resilience, net zero, jobs, and national security. It is unclear how DBT balances these objectives when designing support initiatives, and how they are weighted when different options for funding are compared against each other. 
• DBT could make better use of evidence on the effectiveness of interventions when designing new support initiatives. Different industry support interventions are better suited to achieving different policy objectives. Factors to consider in demonstrating that interventions are chosen appropriately include the ease of access, geography, size of business, size of sector, and urgency. 
• DBT does not have a complete overview of what it, and wider Government, spends supporting industry, which limits its oversight. DBT tracks its own programme spending, grant expenditure and resource spending across different sector teams, but it does not currently have processes to break this down by support type. 
• The Industrial Strategy can provide a framework to prioritise activity and resources across the whole economy. Currently, DBT treats each sector individually, with limited consideration of the trade-offs and interdependencies between different interventions and different sectors. The interventions the Government uses to support the sectors prioritised in the Industrial Strategy will also require effective prioritisation. 

From a review of the structure and content of previous Industrial Strategies, I offer three overarching observations:  

1. Time period: some strategies focused on the here and now, such as the 10 Point Plan (2020). In contrast, others looked far into the future such as No Stone Unturned (2012) and Eight Great Technologies (2013). 
2. Investment needs: some strategies concentrated on the investments already made or committed by Government, aiming to build on these by investing in areas such as access to finance (Industrial Strategy 2012) and levelling up (Build Back Better 2021). Where some strategies focused on medium-term investments, like the Levelling Up White Paper (2022) and Growth Plan (2022); others concentrated on long-term investment such as the Productivity Plan (2015) and Industrial Strategy White Paper (2017).  
3. Programme management and governance: there are few references to measuring and monitoring implementation in any of the strategies, apart from Plan for Growth (2011) and the Levelling Up White Paper (2022). The Plan for Growth set measurable benchmarks under each ambition, while the White Paper referenced next steps around engagement and future legislation. In all previous strategies there was little consideration of oversight.  

Some of these findings align with observations made by other commentators, who have also reviewed previous strategies and identified additional themes. 

The IfG highlights the UK’s ‘patchy record’ in Industrial Strategy, describing it as ‘fumbling forward’ rather than planning, and how the country has struggled to stick to an Industrial Strategy for more than a few years at a time. According to the IfG, a successful Industrial Strategy should diagnose the economic issues that require state intervention, and justify the state’s ability address them. The IfG’s key rules for making an Industrial Strategy work include: 

• Do not try to own all of economic strategy: HM Treasury’s economic strategy covers high-level objectives such as growth, employment, and inflation. Industrial Strategy needs to reflect this, but in its operation be supplemented by more specific objectives. 
• Industrial Strategy is a matter of degree, not all-or-nothing: there are areas of the economy where it works, and others where it does not. It is essential to delineate the two from one another. 
• Have ‘edges’ and do not fall into the trap of trying to be all-encompassing: it is better to start with cases where there is a clear rationale for intervention and build from there, rather than promise to try to make everything better by every possible means. 
• Model how the strategy works: Government investment is not big enough, relevant enough, or sufficiently skilfully deployed on its own to wrestle the economy in the ‘right’ direction. Business incentives are much more significant. 
• Evidence of levelling up is weak: vows to drag regions up through the power of infrastructure budgets have not enjoyed widespread success internationally. Answers include skills levels, health care, openness to overseas markets and sectoral inheritance.  
• Overconfidence and a blithe attitude to flaws: Industrial Strategies are prone to an optimism bias and are unable to judge if an economic intervention has staying power. 
• Adopt a systematic approach that focuses on institutions: the economy is not something directly controlled by the Government but works through the actions of the private sector, and their actions are influenced by the economy’s institutions. 
• Be clear on the choices that need to be made about the overall objectives of the strategy: a system should be put in place to insulate the strategy from the whim and bias of political actors; and objectives should be sufficiently high-level as to retain room for competitive mechanisms. 

The IfG further emphasises the trade-offs the Government must consider, such as where the cost of net zero investments may outweigh short term benefits; and increasing economic resilience may stop UK companies opting for the cheapest option on the global market. 

IPPR has also highlighted the ‘chop and change’ nature of industrial strategies, noting that many of the same themes recur across the documents, with micro-level policy consistency in some areas. For IPPR, industrial policy should encompass four dimensions: (1) an Industrial Strategy, (2) production interventions that affect how goods and services arrive in the market, (3) purchasing interventions that affect how goods and services are bought, and (4) the underlying aspects of the economy such as workforce, infrastructure and innovation. Echoing the IfG, IPPR indicates how Industrial Strategy requires making choices, and policy makers need to select the right blend of instruments to achieve their objectives while avoiding capturing or dominating the private sector. IPPR has been advocating for a green Industrial Strategy that leverages place-based strengths to bring opportunity and optimism to areas that have suffered from past deindustrialisation and have felt overlooked for too long. To achieve this, IPPR has identified five lessons: 

1. Clear direction from the centre: the Government needs to make strategic choices about the products and technologies it chooses to specialise in, and it needs to co-produce its Industrial Strategy with regional and local government. 
2. Framework for dialogue with the regions: regions should be treated as equal partners in a social partnership approach to Industrial Strategy. There is a need to set out a clear institutional framework for developing and implementing Industrial Strategy that builds on regional knowledge. 
3. Linking Industrial Strategy with deeper devolution: devolved powers and funding streams should be agreed between the centre, combined authorities and regional mayors. 
4. Place focused investment at scale: the strategy should target investment in places that would benefit most from a manufacturing renaissance. 
5. Fixing the foundations: the foundations for long-term green industrial growth must be developed.  

The Centre for Cities also queries why there have been so many strategies, suggesting that either there has been a lack of a clear goal, or a coherent plan to achieve it. For the current Government’s new strategy to stand out, the Centre for Cities argues that it must deliver on three key fronts: 

1. Set a target to be more prosperous than Germany: the UK is currently 13% less productive than Germany on an output per hour basis. Where previous strategies have been vague on boosting productivity and earning power, the next strategy needs to communicate a clear and concise goal that is measurable. 
2. Be clear that the Industrial Strategy is about productivity growth: if the strategy tries to achieve different things, or there is conflict between different goals, it becomes an amalgamation of separate issues that require separate policy approaches. To overcome this, the strategy should focus unashamedly on productivity growth. 
3. Big cities, rather than sectors, are the main vehicle for delivering a national Industrial Strategy: the economy organises itself in places, and innovative sectors co-locate in cities. The Government should be explicit in recognising large cities as strategically important to the national economy, and the places with the biggest gap from their potential requiring the greatest policy focus.  

In April 2025, the Resolution Foundation published a guide for practitioners on how to do Industrial Strategy. It proposes 20 policy tools spanning sectors, technologies, places, funding and state capability, along with a clear roadmap for policy makers. Echoing the findings of the IfG and IPPR, the Resolution Foundation highlights how Governments “tend to engage in Industrial Strategy even if reluctant, often without a coherent framework for decision-making”. They indicate how, with the exception of a greater emphasis on services, all of the sectors in the Government’s Green Paper have been of longstanding interest and the focus of previous industrial strategies. The Resolution Foundation’s guide focuses on boosting private investment and productivity, and contains 4 recommendations: 

1. Reinstate proof-of-concept grants for early-stage innovation and reduce university barriers to spinout funding. 
2. Use business schools to train local managers and support SME supply chains. 
3. Increase funding to the British Business Bank and National Wealth Fund, and link them more directly to innovation policy. 
4. Enable mayors and city regions to pitch local growth strategies and unlock infrastructure and housing to support clusters. 

Echoing the IfG and IPPR, the Institute of Directors (IoD) welcomes the Government’s commitment to delivering an Industrial Strategy but highlights the difficult choices that will need to be made, including whether to back winners in scaling or sectors struggling to receive private backing. The IoD believes Government can play a vital role in setting a stable operating framework for businesses which creates the right incentives for high-growth and strategically important firms and sectors to flourish. The National Federation of Self Employed & Small Businesses (FSB) believes the Industrial Strategy needs to be a supply-side blueprint to futureproof the UK economy against future shocks, and that small businesses should be at the centre of a comprehensive growth strategy. 

Commentators have cited several reasons for the merry-go-round of Industrial Strategies which for me are concentrated in three areas. Firstly, at the design stage, there is a lack of clear goals or a coherent plan, and a failure to gather evidence to fully understand the economic issues requiring state intervention. This leads the Industrial Strategy to be too high-level or all-encompassing. Secondly, at the implementation stage there has been ineffective prioritisation and an inability to make trade-offs between different goals. Industrial Strategies have often lacked understanding of the interdependencies between different sectors, missions, and places. Thirdly, at the review stage, there has been a lack of measurable benchmarks, monitoring and oversight. While some Industrial Strategies have focused on the ‘here and now’, others have looked to the long-term – all have been sprinkled with an optimism bias. 

This opens up dialogues on the scale of an Industrial Strategy, whether it should be macro or micro, interventionist, pro or anti competition, and sector or place-based. These aspects are not straightforward, they require the Government to set out its rationale for the structure and content of their Industrial Strategy. How does what the Government is seeking to achieve translate into an operational model? How will it be monitored over time? How can we rethink the duration and longevity of key content to avoid redundance and the rapid succession of strategies being published within a relatively short period of time? Fundamentally, what is the necessity and optimum timing of Industrial Strategies? 

What does this mean for rural communities? From a rural review of previous Industrial Strategies, I offer three observations:  

1. References: the Levelling Up White Paper (2022) contained 39 references to rural areas, No Stone Unturned (2012) had 18 references, the Industrial Strategy White Paper (2017) included 14 references, and the Productivity Plan (2015) featured a section on ‘supporting the rural economy’. However, the Growth Plan (March 2023) contained no rural references at all. Similarly, the Industrial Strategy (2012) had just one reference, and the 10 Point Plan (2020) and Growth Plan (2022) had only two references each.  
2. Geographies in need: while nearly all the strategies paid some attention to sectors, the Levelling Up White Paper (2022) was premised on addressing geographical disparities. It contained a call to set spatial targets for research and development, including for the Department for Environment, Food & Rural Affairs (Defra), and streamlining local growth funding by allocating resources ‘skewed to need’. 
3. Themes & Initiatives: across all of the documents that reference rural some common themes emerged, including broadband and mobile connectivity, transport (buses), and regulation (farming, environment, planning)  Some strategies referenced specific rural initiatives such as Rural Growth Networks (No Stone Unturned, 2012), the publication of a ‘10 Point Plan for Rural Productivity’ (2015), Shared Rural Network(Growth Plan 2022), and the scalability of the Smart Islands Programme. The Levelling Up White Paper (2022) also included a reference to rural proofing. 

The Rural Productivity Plan (2015) focused on ten key areas to improve productivity. These areas included broadband, mobile communications, transport, education and training, apprenticeships, enterprise zones, planning, housing, childcare availability, and devolution. Building on the Rural Statement, the Plan represented the Government’s offer and ambition for rural areas. However, much of the content reiterated existing announcements and initiatives, such as schools becoming academies and neighbourhood planning. Additionally, it was unclear how rural communities and businesses had contributed to the Plan, or how its implementation would be monitored. 

While the Invest 2035 Green Paper highlights the “enormous potential for economic growth outside of London and its surrounding areas”, it fails to mention rural areas. During the Industrial Strategy Advisory Council’s meeting in February 2025, there was a brief discussion on ‘place’. Members emphasised how it is “clear that place cuts across all workstreams…and there was a need to consider how different policies would have an impact in various places”.  

In its response to the Green Paper, the Rural Services Network (RSN) argued that the document lacked sufficient emphasis on the economic opportunities available in rural areas: 

“We accept for too long, that economic growth in Britain has been disproportionately concentrated in London and the Southeast, leaving other regions as ‘left behind places’. But there is another factor – rural areas have been further left behind within regions…It is essential that rural areas or not just treated as places where there is land to support developments/infrastructure to meet the needs of non-rural areas – but that those rural areas, their businesses, and communities, also benefit from the investments, job opportunities and economic growth”.  

In its submission, The National Innovation Centre for Rural Enterprise (NICRE) called for the Green Paper to expand its emphasis on ‘growth’ to acknowledge the contribution of rural economies: 

“To fully deliver its objectives, the Industrial Strategy will need to address wider, major cross-cutting economic drivers, capabilities, and opportunities, which includes fully utilising the diversity, spatial reach and sectoral strengths of the nation’s rural economies”.  

Earlier this year, the NICRE held a joint event with Cornwall Council titled ‘UK Industrial Strategy and Rural Economies: the Cornish Opportunity’. The event emphasised the need for Westminster to shift its focus from urban areas to recognise and harness the potential of places like Cornwall. 

“Too much policy to date really focuses on growth and innovation in an urban context so we really need to get those policy makers to understand these differences and in that sense Cornwall is a fantastic place to come to as it has some of the best examples of why rural is different and why rural is positive for the future”, Professor Janet Dwyer, co-director at the NICRE. 

According to Defra’s Statistical Digest of Rural England Economic Bulletin, the industry with the highest percentage of businesses in rural areas is ‘agriculture, forestry and fishing’ (14%), followed closely by ‘construction, professional, scientific and technical services’ (13%), and ‘wholesale and retail trade including repair of motor vehicles’ (13%). The Green Paper does not reference the predominant industry type in rural areas, and only mentions ‘construction’ four times in the context of planning and development. It also includes 12 references to professional services, which are considered one of eight sectors with the highest growth potential, although the document describes how current sector performance is largely driven by a relatively small number of firms concentrated in London and the South-East. The Economic Bulletin reveals that rural areas have more registered businesses per head of population than urban areas, with the majority of these businesses having fewer than 50 employees. Small and Medium Enterprises, employing fewer than 250 people, account for a greater proportion of total employment in rural areas than in urban areas (70% and 42% respectively in 2022/23). The Green Paper does not contain any references to SMEs. 

According to Defra’s Economic Bulletin, the productivity of major rural local authorities (measured by GVA per workforce job) is around 92% of that for England (excluding London). Relative productivity, which measures the rate of output per workforce, has declined most in local authorities where the majority of residents live further from a major town or city. A report by Pragmatix advisory for the Rural Coalition, predicts that the non-rural economy will be 6.5 times the size of the rural economy by 2040 based on a ‘business as usual’ case. The report outlines four benchmarks that could reverse this trend. Firstly, if rural productivity grows as fast as in cities, GVA could grow by 10% in 30-years. Secondly, if rural areas achieve England average productivity rates excluding agglomeration, productivity could be 13% greater. Thirdly, achieving G7 relative rural performance, where rural England’s productivity rates are currently 20% less than comparator countries, could result in productivity being £11,000 greater per rural worker. Fourthly, achieving Scandinavian relative rural performance could generate GVA worth £278 billion a year, with HM Treasury receiving an additional £9-19 billion annually in tax receipts. According to the report, effective governance is the catalyst for change: 

“If the rural economy is to reach its productivity potential, there is a need to acknowledge the unique challenges and circumstances faced by rural areas and develop a system which allocates funding accordingly to support their sustainable development and prosperity…Empowering local communities, if effectively supported, presents a clear opportunity to leverage local resources and commitment to help increase productivity. Community wealth building and place-based community led solutions can pay back far more than the cost of catalysing them”. 

All of this opens up debates around what constitutes the ‘right’ economic geography – what is the most appropriate spatial unit(s) within which Industrial Strategy should sit, and if place is ‘cross cutting’, how can we ensure the resultant policies consider rural areas? For me, a territorial approach needs to benefit rural places in ways that help people live and work in the countryside. Previous strategies have focused on specific locations or clusters, but their geographical emphasis has not considered rural areas. In terms of governance, will the Advisory Council evolve into a monitoring body that seeks to embed Industrial Strategy into the routine agendas of the current and future Governments? How can rural stakeholders contribute to ensuring the Industrial Strategy is implemented effectively in rural areas? 

In previous Rural Words, I explored how rural England was becoming a ‘white space’ in the devolution agenda, emphasising the importance of ensuring rural areas are given the same opportunities for growth as their urban counterparts. In the 2017 Industrial Strategy, Local Enterprise Partnerships (LEPs) and combined authorities were responsible for delivering local industrial strategies. During the development of these strategies, I highlighted how rural areas became ‘grey areas’ and struggled because of a lack of long-term funding to support local investment, insufficient capacity in local institutions to implement and evaluate strategies, and uncertainty around to what extent central government’s ambitions and vision could be adapted to local circumstances. How will rural areas feature in the Local Growth Plans now being developed by mayoral combined authorities (MCAs)?

None of the Industrial Strategy or productivity documents published so far have presented an ambitious blueprint for rural areas. If we shift our perspective, what is our ambition, our vision, and our compelling offer to Government? The Rural Coalition envisions a rural England in ten years’ time where ‘businesses of all sizes have access to a skilled, local workforce and have options to grow through available finance, premises, training and advice’. What do we want the Industrial Strategy to achieve, and how will rural areas look and feel in 10 years’ time from now if we get it right? What rural assets and levers do we possess that make us stand out and could help current and future Government’s drive for investment, productivity, and growth? 

Where next? Given the current fiscal backdrop, there may be a disconnect between what the Government wants to achieve through its Industrial Strategy and business and industry expectations regarding what the Government can realistically deliver. The next iteration of the Industrial Strategy is being published around the same time as the Spending Review. If we want public, private, voluntary and community sectors to invest, innovate and collaborate like never before, will the next Industrial Strategy provide the necessary statecraft to do this? The Industrial Strategy, growth-driving sector plans, and Spending Review will be accompanied by Government’s long-term vision for local growth, with the goal of targeting funding where it is most needed and empowering local leaders. What more can we do to ensure these documents and their accompanying initiatives contain an ambitious blueprint for rural areas rather than leading to ‘snail crawling’? For we already know that gradual improvements in the business environment, correcting market failures under ‘business as usual’, leads to low growth resulting in rural areas falling further behind their urban counterparts. 

Alongside the Industrial Strategy, Defra has established a ‘Taskforce on Delivery of Government Missions in Rural Areas’. Chaired by a Defra non-executive director, the Taskforce brings together a dozen organisations representing rural businesses, communities, public services and academia. The Taskforce is due to report in July, with its recommendations informing a ‘Rural Missions Delivery Plan’ to be published in the autumn. Will the taskforce unlock the potential of rural areas? Watch this space.  

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Jessica is a project manager at Rose Regeneration and a senior research fellow at The National Centre for Rural Health and Care (NCRHC). She is currently collecting data to highlight the positive impact of relocating NHS clinical services into community settings; developing a community masterplan; and evaluating a heritage skills programme. Jessica also sits on the board of a charity supporting rural communities across Cambridgeshire and is a member of her local Patient Participation Group. 

She can be contacted by email jessica.sellick@roseregeneration.co.uk 

Website: http://roseregeneration.co.uk/https://www.ncrhc.org/ 

LinkedIn: 🌈Jessica Sellick 

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