LONDON (Reuters) — Britain pitched a new strategy for industry on Monday that sees greater state intervention to tackle weak productivity and to help the world's sixth largest economy cope with the upheaval of leaving the European Union.
Prime Minister Theresa May first flagged the plan in January, seven months after Britain voted to leave the European Union, adopting a hands-on approach to business that had largely been abandoned by her predecessors from the time of Margaret Thatcher in the 1980s.
The government said it had secured major investments from global healthcare company MSD, known as Merck in the United States, and German-based diagnostics company Qiagen ahead of the publication of the strategy.
While the Financial Times estimated the value of the investments at more than 1 billion pounds (C$1.7 billion), MSD said it was too early to give an investment figure and Qiagen also gave no number.
Life sciences is one of four sectors being targeted by the government, which will also focus on construction, artificial intelligence and the automotive industry.
Business Minister Greg Clark said Britain has some of the world's best universities and research institutions, as well as leading companies in sectors ranging from advanced manufacturing to financial services, life sciences and creative industries.
"But any serious strategy should address the weaknesses that stop us achieving our potential, as well as our strengths, and this Industrial Strategy does that," he said.
"Britain's productivity performance has not been good enough and is holding back our earning power as a country."
Last week Britain's budget forecasters cut the country's growth estimates for the next five years, largely because of reduced projections for productivity, the Achilles' heel of the economy since the financial crisis.
Clark said the new industrial strategy would strengthen infrastructure and the business environment in an effort to improve productivity.
Britain's economy is expected to grow by 1.5 per cent in 2018, weaker than 2.0 per cent growth among the world's advanced economies as a whole, according to forecasts by the International Monetary Fund.
MSD said it would open a state-of-the-art life sciences discovery research facility in London by 2020, focusing on early bioscience discovery and entrepreneurial innovation.
MSD said it viewed Britain as a world-leader in science, although a spokeswoman said Brexit raised "some very real concerns" for the supply chain, drug regulation and the ability to attract talent to Britain.
The U.S. drugmaker intends to create 150 new research roles in London and move around 800 existing U.K. jobs to the capital.
Qiagen said its plans to develop a genomics and diagnostics campus in Manchester, northern England, had the potential to create 800 jobs.
The vote of confidence in Britain's life sciences sector was welcomed by the government after the news last week that the European Medicines Agency would move from London to Amsterdam when Britain leaves the EU in March 2019.
Brexit remains by far the biggest concern for British companies and multinationals with operations in Britain. With only months to go before many businesses need to make decisions on future investment, they are eager for clarity on how Brexit will work.
However, talks with the European Union have made slow progress, and the government has only been able to reiterate its plan to seek a transition deal as soon as possible.
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