Rethinking Innovation Policy in the UK

The big hubbub over Brexit has distracted us from some other big policy changes now underway in Great Britain.  The new government, led by Theresa May, is also rethinking a number of other government priorities, including some potential new approaches to innovation policy.   Specifically, she has created a new Department of Business, Energy, and Industrial Strategy (BEIS) to oversee British innovation policies.  The use of the concept of “industrial strategy” represents a big change for Tory governments, which traditionally have clung to the tired and overused concept that “government can’t pick winners or losers.”  The BEIS has issued a formal inquiry and is requesting ideas and input, with a deadline of September 27, 2016.    The policy shift is already generating some interesting debate about the appropriate role of the UK government in supporting innovation policy.  (Here are links to a few interesting insights from the Institute for Government,  my colleague, Glenn Athey, and The Economist.)    Britain is facing some thorny innovation policy issues.  Of course, Brexit is a big issue, but other pressing challenges are also at play.  These include the role of foreign investment (triggered by debate over the potential takeover of ARM, a major UK chip maker), and revitalization in Northern Britain.  The Northern Powerhouse was a regional development strategy and leading priority of the previous government, and its status is also under consideration.    This will be an interesting debate worth following, and we can only hope that we in the US undertake a similarly rigorous and serious look at our innovation policy priorities after the November elections.

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