CBI: UK is in pole position to benefit from Industry 4.0

The fourth industrial revolution (Industry 4.0) is on our doorstep, and the UK is in pole position to benefit from it, the CBI has stated.

However, the business organisation warns that seizing the opportunity will need a new kind of industrial strategy. As many as 35% of jobs may be displaced by automation and artificial intelligence: new ones will take their place but will require a strategic approach to retraining.

The survey of over 400 firms shows there is strong consensus amongst firms (82%) that the main pillars of a new industrial strategy need to be people, infrastructure and innovation. They say that all three need to be transformed to power a new, modern economy. Uncertainty is taking its toll, with key concerns including: uncertain economic outlook (54%) and what post-Brexit trade will look like (39%).

The CBI recommends the creation of an independent industrial strategy body, similar to the OBR, that could measure, advise and build confidence that this plan will last. Regional industrial strategies are a large part of the solution. Every region of the UK has special strengths that can be unlocked by devolution and tailored strategies. To ensure no part of the UK is left behind, the CBI recommends the appointment of a regional commissioner to oversee delivery, regardless of local political structures.

Carolyn Fairbairn, CBI director-general, said: “As uncertainty continues to bite on the UK economy, there has never been a more important time for the UK to unite behind a ‘leapfrog’ industrial strategy. The aim is to enable British firms to compete and win in the new technology age. It is also urgent. Change is coming at lightning speed and the world won’t wait for Britain.

“This means we can’t afford to let Brexit distract from the long-term action that is so badly needed. What’s at stake is the UK’s future in a global economy redefined by artificial intelligence and automation. Brexit must not be allowed to crowd this out.

“Firms agree on what matters most: transforming the UK’s skills base, modernising its physical and digital infrastructure and accelerating innovation. But they also agree that catching up is not enough.

“A leapfrog industrial strategy is within reach but not easy and will require a partnership of the century between government and business. Nobody wants to have this conversation again in four years’ time, and jobs and opportunity won’t wait around.

“We look forward to the publication of the Government’s strategy and to working with them and across all parties to build an industrial strategy that can stand the test of time and improve lives across the UK.”

Some of the main survey findings include:

• 89% believe that a modern Industrial Strategy could be a significant opportunity to improve living standards across the UK by 2030


• Uncertainty is constraining investment with key concerns including: uncertain economic outlook (54%) and what post-Brexit trade will look like (39%)


• Business is clear that people (28%), innovation (27%) and infrastructure (27%) will drive living standards across regions and sectors. Over 80% are clear that unless we prioritise these, work on place (2%) and sectors (17%) will falter


• Clear risks to its successful implementation include: lack of a long-term vision (35%); lack of attention to Industrial Strategy by Government due to Brexit (29%), lack of cross-party buy-in (15%)


• 42% of firms believe that devolution is a significant enabler to making Industrial Strategy a success, with half (50%) stating that better collaboration between local authorities and business will be essential.

• Build a new style of partnership between government and business, tasked with leapfrog thinking in skills and retraining, infrastructure and innovation


• Set up a joint commission on artificial intelligence in 2018, involving both business and employee representatives, to better understand the impact on people’s lives, jobs and our future economic growth


• Deliver on the recommendations as laid out by the industrial digitalisation review, chaired by Siemens UK CEO Juergen Maier


• Establish an independent Industrial Strategy Office – similar to the Office for Budget Responsibility – to measure and monitor performance and give impartial advice on industrial strategy progress.


• Appoint an independent commissioner to ensure all regions of the UK have appropriate levels of devolution to deliver the Industrial Strategy


• Work across the party spectrum to ensure that strategy sits above political cycles.