The Building Our Industrial Strategy Green Paper, published on 23rd January 2017, set an ‘open door’ challenge to industry to come forward to Government with proposals to transform their sectors through ‘Sector Deals’, within the context of 'Cultivating World Leading Sectors'.
The Green Paper sets out in broad terms what the Government is looking for from sector deal propositions. Sector deals should be UK-wide and be driven by business to meet the priorities of business, recognising that it is businesses, rather than Government that are best placed to identify what companies need in order to enhance their competitiveness as a sector.
Government are looking for businesses to collaborate with other stakeholders, such as universities and local leaders to produce a clear proposal for boosting the productivity of their sector, setting out detailed plans to address challenges such as:
- delivering upgrades in productivity, including in supply chains;
- promoting competition and innovation;
- facilitating long term investment and coordination between suppliers and primes;
The Government are particularly keen to work with sectors that organise themselves behind strong leadership to help deliver upgrades in productivity and cite examples from the Aerospace and Automotive sectors. With Maritime UK established in direct response to the Government's Maritime Growth Study call for the creation of a single, industry-wide promotional body working in partnership with government to bring together this diverse sector and raise both its domestic profile and effectively market the UK abroad as a place for maritime business, Maritime UK is uniquely placed to provide sector deal leadership.
Sector deals are expected to propose detailed plans to address challenges such as those set out below, and it is within this context that the sector deal should be developed:
- accelerate growth across the value chain, including by identifying where the greatest value can be gained from technology development and investment;
- developing and growing the strengths of particular clusters;
- increasing exports; and looking at how we can use trade and investment deals to help the sector;
- commercialising research across sectors; and
- boosting skills and the number of high value, high productivity jobs.
An industry or sector would need to show how the companies within the sector could take actions to transform their strategic prospects, and how the Government could increase the prospects of success. This could be by:
- helping align government policies around a sector, including training and skills;
- addressing a regulatory issue or deregulating;
- promoting the creation and diffusion of new technology and good practice;
- ensuring existing sources of funding are used most effectively;
- helping address market access barriers with other countries; and
- supporting the creation of new institutions or development of existing institutions to support the sector, whether they are institutions to provide leadership, support innovation or raise skill levels
1. Why a Maritime Sector Deal?
It is recognised that the maritime sector is a vibrant, global sector comprising various successful industries that can deliver against the government’s stated priorities of building a stronger economy by enhancing productivity, exploiting our strengths and extending excellence into the future, increasing exports and making the UK one of the most competitive economies in the world.
The maritime sector has continued to evolve over time, responding to ongoing changes in the global economy, bringing to the forefront expertise in maritime-related business services, as well as marine manufacturing, engineering and technology. Whilst the UK no longer builds the largest commercial vessels we do continue to provide services to the world that support their charter, insurance, sale and purchase. We also design and supply the essential components that are critical to their operation. Our largely private sector-led ports market also remains a global success and the UK’s offer in maritime education, training and research is unrivalled. This core hub of maritime services is exported worldwide and encourages businesses, including ship-owners, to locate and invest here.
Maritime UK has responded to the call from government to bring the industry together to focus on the key issues which are important to the sector as a whole so that the maritime sector does not remain ‘a hidden gem’, but instead takes its rightful place in the UK's Industrial Strategy. This is a now a once in a generation opportunity to enhance the contribution of the UK maritime sector and exploit the expected growth in world trade to help create jobs, raise productivity levels, increase the export of our maritime services and encourage maritime-related investment across the country. This is a sector rich in SMEs and innovation and one that, with the right conditions, can contribute to enterprise, productivity and both national and place-based growth in the UK.
Through Maritime UK, industry leaders have been working with Government to:
- Maintain the UK’s position as a world-leading maritime centre; and
- Exploit opportunities to generate further growth in the sector.
The development of a maritime sector deal is a natural evolution to support the development of a future-facing maritime sector and the development of a sector deal is seen as an opportunity to establish a long term vision and delivery plan to support this. Making this happen will require co-ordinated action through a sector deal to ensure that investment in infrastructure, skills, innovation, and trade and business growth is maximised. Providing the conditions that the maritime sector needs to succeed and grow means working across industry and geographical boundaries to support the sector, and Maritime UK has been working together with local, regional and national partners since 2015, unconstrained by boundaries to support maritime growth. We want to use this experience and knowledge to continue to work with Government Departments on a sector deal for the Maritime sector.
2. Proposal for the initial development phase of a Maritime Sector Deal
It is recognised that the maritime sector is diverse and that this diversity is a strength with new ideas shared across the value chain. At the same time, it is also recognised that the sector does not operate in isolation and that it can both learn from and inform productivity gains in other sectors.
The diverse components of the maritime sector do coalesce around clusters, leveraging off skills and talent, research, knowledge, infrastructure, professional services, amongst others, to share in agglomeration benefits. Further agglomeration benefits are realised as clusters to cluster interactions take place - both nationally and internationally.
In consideration of this, it is proposed that the sector deal proposition is used as an opportunity to initiate on ongoing and iterative dialogue with Government to realise productivity and competitiveness gains across the sector in a series of 'waves'. This is a similar approach to the way in which the more mature local government devolution deals have evolved, with new 'offers' and 'asks' being agreed in successive iterations of deals.
Industry is currently developing and progressing a number of bid proposals and more information, including the opportunity to provide feedback, will be available soon.
Update - June 2018
At the start of March BEIS asked for a stocktake of sector deals in development. On behalf of the maritime sector, Maritime UK provided a summary of developments and a draft proposed sector deal document.
Maritime UK received feedback on those proposals at the end of May.
BEIS have received a huge amount of interest in sector deals. BEIS have now internally completed a stocktake of those developing bids via an internal review conducted by their own assessment panel. They have said that the process is competitive and those bids that are most ambitious will get prioritised.
BEIS believe that there is a good strategic case for a Maritime sector deal and the DfT are keen to align Maritime 2050 with the sector deal process. Initial feedback on the proposal coordinated by Maritime UK has urged the sector to focus on three key areas:
- Technology and innovation. Focused
upon low carbon growth, aligning with the IS grand challenge of clean growth.
- Regional growth. Focused on the maritime sector
driving growth in the regions and coastal communities, this would bring in
connectivity and marine planning as well as plans to develop new regional
- Business environment. Focused on the fiscal and
regulatory environment necessary to attract shipowners to the UK, this would
include any changes to Tonnage Tax and the statutory residency test.
- The three areas of focus will be developed further by Maritime UK and government in June to agree overall vision, ambitions and main asks.
- There will be a workshop with a wider audience - preferably in July. This will include trade associations, regional clusters and other stakeholders and will be linked to the Maritime 2050 work. The main objective of the workshop will be to understand how to shape the asks/offer and how to develop the bid.
- If you wish to attend the workshop, please get in touch.
- If you have an existing initiative that aligns with one of the three areas of focus above, please get in touch. The workshop will ask how most appropriately to package and connect existing activity and add value through collaboration.