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How manufacturing can emerge stronger: Policies to support industrial recovery and growth after COVID-19
Published on October 1st 2020
Key messages
- Governments around the world have attempted to seize the COVID-19 crisis as an opportunity to modernise, improve the sustainability and strengthen the resilience of their manufacturing industries.
- While new measures have been established, a more common approach has been to provide additional funding and relax the eligibility criteria of existing programmes. Institutions and initiatives established prior to the crisis have been used for the rapid delivery of emergency support.
- Our international review identified five priority areas in the international manufacturing policy agenda to support industrial recovery and growth.
Figure 1. Priority areas identified in the international manufacturing policy agenda
The policy mix employed by the countries reviewed includes:
- More resilient – Trade facilitation, capability mapping studies, supply–demand coordination, business advisory services and reshoring incentives.
- More sustainable – “Green New Deals”, R&D incentives, “green” infrastructure investment, consumer incentives, public procurement of energy-efficient products.
- More innovative – Start-up support, R&D grants, training subsidies, capital investment allowances, relaxation of regulations.
- More global – Export advice and finance, market intelligence, insurance financing.
- More inclusive – Preferential support to most affected regions, industries, firms and workers; consumption incentives; expansion of digital infrastructure; training grants.
Key emerging messages, with implications for the UK Industrial Strategy, include:
- Critical contribution of the manufacturing sector to crisis response and long-term economic resilience. Across the countries reviewed, there is broad recognition of the critical role that manufacturing firms, and related engineering capabilities, have played during the crisis. In countries such as South Korea and Singapore, there is also clear recognition that manufacturing industries have offered “pockets of resilience” that have prevented a more pronounced recession and which will be critical to long-term economic recovery.
- New evidence for future industrial strategy. New manufacturing know-how is required to inform recovery strategies that account for the heterogeneous impacts and needs of different industries and regions. Forward-looking studies will be needed to gain insights into how COVID-19 might reshape industries for years to come.
- Renewed interest in industrial innovation and digital technology deployment. National strategies are being developed to support the transformation of industries such as automotive, aerospace and pharmaceuticals through R&D and innovation. Initiatives to accelerate the deployment of digital technologies have been announced in most of the countries reviewed.
Others in this series
This policy brief is part of a series of studies produced for the Department for Business, Energy and Industry Strategy (BEIS), which include:
The contributors to this briefing note are: Jennifer Castañeda-Navarrete and Carlos López-Gómez.
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