Sector plans: why they matter and how to deliver them effectively

The Cambridge Industrial Innovation Policy (CIIP) team welcomed the opportunity to contribute to the UK Government’s Industrial Strategy Green Paper consultation. This response presents an evidence-based analysis to address critical aspects of sector plans and industrial strategy.

Informed by the latest academic insights and international best practices, our note highlights the importance of sector-specific strategies in fostering industrial transformation, competitiveness, and sustainable growth. By outlining key recommendations, this note aims to inform policy design that effectively aligns with the UK’s strategic goals, including economic resilience, net-zero ambitions, and technological leadership.

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Summary: Sector plans – why, what and how

• There are compelling reasons to adopt a sector-based approach to promote economic growth. Economic conditions, such as size, market structure, and investment levels, vary significantly across sectors. Sectors also contribute differently to national strategic goals, with some playing pivotal roles in areas like economic growth, national security or net-zero ambitions. Additionally, sector-specific evidence enhances the design of horizontal policies, allowing for more targeted and effective interventions. Businesses naturally organise themselves by sectors, as seen through industry trade associations, which facilitate collaboration between government and industry. Lastly, international examples – ranging from Taiwan’s semiconductor success to Singapore’s biopharma growth – underscore the effectiveness of sector strategies in driving industrial transformation.
• The evidence generated by sector plans is crucial to inform and shape industrial strategy decisions. Sector analyses provide a detailed understanding of how policies address barriers to growth and help design more nuanced interventions.
• Sector plans and missions are complementary elements of an effective industrial strategy. Far from being substitutes, missions rely on strong sectoral and technological systems to succeed.
• Rather than the government independently developing sector plans, a process should be established to enable the joint public-private development of the sector plans with industry and other sectoral stakeholders. Industry plans should be both government- and industry-led, ensuring its alignment with broader national objectives and industrial innovation capabilities. They should involve bottom-up participation of a broad range of stakeholders to agree on a shared ambition for growth and innovation. The government must also be wary of not focusing too much on the interests of a few influential stakeholders, neglecting the needs of smaller ones or those that do not yet exist. The ideal relationship is well encapsulated in the concept of “embedded autonomy,” which describes a situation in which the government works close to industry and society, but still retains its autonomy and is not captured by interest groups.
• Sector plans should establish concrete value-added and export growth targets to improve the UK’s competitiveness performance. Some UK sectors and subsectors have become less competitive and lost global market shares over the last two decades. Reversing this trend should be at the heart of sector plans.
• Sector-specific studies are essential to effectively underpin sector plans. The evidence base required for effective sector plans include value chain analyses to map the sector structure and identify key high-value-added subsectors, strategic foresight exercises to anticipate future trends and disruptions, and sector competitiveness studies to assess the UK’s strengths, weaknesses, and opportunities in the global market.
• There are opportunities to learn from international experience on sector plans. While the specific needs of each sector can only be determined through a robust evidence base, several recent initiatives in leading industrial countries provide insightful examples of the diverse analyses, objectives, and implementation strategies that can shape effective sector plans. At the very least, these initiatives provide insights into the actions and strategies being employed by the UK’s competitors.