A new approach to industrial policy in Britain is being promoted by the Government.

Lord Mandelson, Secretary of State for Business, writes about the three-pronged approach adopted in Whitehall to ensure the country is ready for the 21st Century.

TODAY the Government is setting out how it will promote a new approach to industrial policy in Britain. It’s part of our strategy for coming out of the recession stronger and ensuring that in the North-East and rest the of the UK, we are equipped for the new opportunities and pressures of a fast-changing world.

In the past we’ve focused on making sure that Britain is a good place for enterprise; that its markets are open and the burden of regulation on business is as light as possible.

We’ve focussed on freeing up enterprise and backing entrepreneurs. It’s a strategy that has worked well – Britain ranks right at the top of global league tables for ease of starting a business.

That’s the right approach, but for a couple of reasons, it is no longer enough. Globalisation provides us with huge new markets to sell in to.

But it will also push our firms and the people who make them successful to be even more productive, specialised and skilled.

In a global economy, where things are no longer made in only one country, keeping the high-value jobs of the future here in the UK has to be our priority.

We’re going to have to work harder to equip our people and companies to compete for the top slots in global value chains.

The second reason we need a new approach is because many of these opportunities are going to be in technologies that are new, and at least at first, expensive and untested.

Low carbon vehicles, lightweight building materials, biotechnology, renewable energy, next generation broadband and advanced technologies such as plastic electronics all fall into this category.

Twenty years from now they will have redefined the way we do things.

The next few years will be the moment when the comparative advantages that will define the 21st Century will be revealed.

We can’t afford to have Britain fall behind because we were not focussed on whether our firms and our markets were equipped to lead these huge transitions.

Other advanced countries will be competing for the same kinds of jobs.

We must not be the odd one out.

To complicate the problem, the recession is putting immense pressure on our companies at the very time when we need to be investing skills and innovation.

So we need a new approach to ensure we come out of the recession stronger and ready to lead.

From today, Government is going to do three big things in a new way.

First, we’ve taken a hard look at some of the basic policies we have in the UK to boost our competitiveness in areas such as skills, innovation and finance for businesses.

These are strong, but they could be even stronger.

In the weeks and months ahead we will be working to give a boost to innovative companies in Britain and exciting new technologies such as electric cars and lightweight aircraft materials.

Second, we’re going to use the huge influence of the Government’s actions in the UK market to much better effect.

For example, we’ll be setting clear strategic targets next year for Britain’s low carbon future, creating incentives for people to buy lowcarbon cars and to invest in energy efficiency at home and work.

With the Government making it clear there is no alternative to a low-carbon future, businesses can start to make their own plans in confidence.

We’re also going to review the way we work in Government so that every time we legislate a change that affects demand in the UK economy – whether it’s by creating new standards for health care or obligations to improve the energy efficiency of your house – Government will be required to think about the industrial opportunities that this creates for UK-based firms.

We will have to set out plans to make sure our firms and workers have the skills and strengths they need to compete for those opportunities.

Finally, we’re going to focus more closely on important areas where the UK needs to retain existing strengths or build new ones.

We will not allow the UK to fall behind in key areas such as composite materials, industrial biotechnology and low-carbon technologies.

These are so central to the next century that we cannot just leave it to the market and cross our fingers.

Where we can build the potential of our firms to compete in these areas by helping ensure they have access to the skills, finance and means to innovate, we must do it.

Even at a time when public spending growth must be tightly controlled, this is a vital investment in our future.

This change will be driven by our regions.

Whitehall can handle the big picture, but it is the local knowledge and expertise of our people that will help make it a reality.

The North-East regional development agency (RDA), and other RDAs will lead on work on the ground to equip you, your businesses and others in the region with what you need for long-term success.

Together, we need to build on these strengths, securing jobs for our people, growth for our economy and developing the innovation and skills necessary to stay ahead of the competition.

Over the next few months we’ll be setting out in greater detail how this picture of a 21st Century Britain will be achieved.

While we focus our energies on ensuring Britain weathers the recession, it’s also time to start thinking about where we need to be when we emerge on the other side.