With a proper strategy, industrial change can deliver better jobs for all

How can we transition to a regional economy?

In the context of globalisation, this is a big question. We know that in the grand scheme of things transition is natural and positive, but it can be difficult.

When the motor car was invented, horse drawn carriages shrank in number and eventually disappeared.

Today cars are commonplace, but over the next couple of decades those powered by an internal combustion engine will decline as drivers opt for hybrid and electric models.

And whilst drivers themselves won’t “disappear”, they are likely to become passengers as driverless vehicles take over.

Opportunities and risks

Transition is as old as industrialisation itself, and it always brings both opportunities and risks.

The risks are particularly acute when a community is dominated by a particular industry and that industry declines. Mining, shipbuilding and coastal regions have all experienced this.

This isn’t a specifically British problem, but some regions have survived and even thrived in the light of industrial change.

We at the TUC decided to take a closer look at how they did it. The result is the report we publish today:‘How industrial change can be managed to deliver better jobs’.

Three success stories

Based on research by the New Economics Foundation, this report presents three successful transition case studies, and asks what the UK might learn from their experiences.

Bilbao

Bilbao in Spain suffered from the 1973 oil crisis and a disastrous flood a decade later. But today Bilbao has a world-famous culture sector underpinned by a reduced but still present industrial base.

A city-wide strategic plan, strong trade unions at enterprise and sectoral level, and a thriving co-operative sector have all made important contributions to the city’s transformation.

Iceland

Iceland – which is about the size of Bilbao - saw the collapse of its banks after the financial crisis. But in the aftermath, Iceland maintained its social security levels and, along with its strong trade union movement, was able to socialise the recovery.

Iceland is the most gender equal country in the world. It has small but growing biotech and pharmaceutical sectors, enabled by an effective tertiary education system.

Tourism is a part of the industrial mix in Iceland, which is also the largest producer of renewable energy per capita in the world.

Eindhoven

Eindhoven in the Netherlands has a strong industrial heritage thanks to the historical presence of the Philips electronics company and DAF trucks.

But the city suffered from the first wave of global offshoring. In response, its famous “triple helix” approach, which brought together national and regional government, business and knowledge institutions, led to the development of industries such as life sciences, healthcare technology and nanotechnology.

‘Brainport Eindhoven’ (the triple-helix brand) is likened to Silicon Valley but is based on co-operation rather than the cut-throat competition that characterises its Californian counterpart.

High quality jobs

As these three case studies show, there is no silver bullet to industrial transition. Each region has built on its unique strengths and cultures.

But the similarities include creating a sense of place, interaction between state, market and unions, and focusing on social as well as economic outcomes.

From a TUC perspective, the most important lesson from these case studies is a focus on high quality jobs, in both national and local industrial strategies.

A social partnership approach and a strong focus on skills in order to develop new work opportunities are other major objectives.