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  • New report considers lessons for UK from industrial transformation in Bilbao, Eindhoven and Iceland.
  • Communities must be in control of change resulting from automation and decarbonising the economy, says TUC.

A report published today (Monday) by the TUC, based on research conducted by the New Economics Foundation, looks at successful models for industrial transformation at local level.

The government intends that each part of the UK should be covered by a local industrial strategy by early 2020.

Major changes to industry are expected from automation and the move to a low carbon economy. The local strategies can play a vital role ensuring a just transition to a green economy, and a fair share of the gains from automation for working people, says the TUC.

The report provides partners such as local government, local enterprise partnerships, business and trade unions with evidence and ideas to help make their local industrial strategies successful.

It identifies four critical factors for successful industrial transformation that genuinely benefits communities:

  1. People feel secure and have a genuine stake in their local area
  2. Working people have a meaningful role in decision-making
  3. A realistic sense of long-term opportunity and social mobility
  4. Positive engagement between government, unions and business

And it recommends steps for national government, local government and employers to take that will enable local industrial strategies to be successful, including:

  • Job quality: the core measure for success should be supply of good quality jobs, supported through local employment charters (as are being devised already by some local authorities including Greater Manchester, Liverpool, North Tyne and London).
  • Social partnership: government, business and trade unions should sit on joint industrial strategy councils and unions should have permanent places on local enterprise partnerships and skills advisory boards.
  • Long-term planning: the government should aid long-term planning in the interests of the communities where businesses operate through corporate governance reform, including a mandatory requirement for worker representation on company boards.
  • Lifelong learning accounts: with major industrial disruption from automation and the move to decarbonise the economy set to change many jobs and industries, it will be essential to the success of local industrial strategies that the local workforce has funded opportunities to re-train in new skills.
  • Public procurement: in addition to public investment, government at all levels should use procurement to support good quality work and wider social benefits, including a target for 25% of central procurement to SMEs.

TUC General Secretary Frances O’Grady said:

“Automation, artificial intelligence and the need to decarbonise the economy are set to make sweeping changes to industry. But that must not mean communities being swept aside.

“When working people and communities are involved in making plans, industrial transformation can mean positive change.

“The main goal of local industrial strategies must be the creation of good jobs. And the foundation must be cooperation between government, industry and unions, with workers and communities taking part in making plans.”

New Economics Foundation Head of Work and Pay Alice Martin said:

“The UK has an appalling track record on managing industrial change in a fair and just way. Given the critical juncture we are at with climate change and accelerating automation, leaving impacts on UK jobs and industries to the whim of global market forces will only deepen existing divides and inequalities.

“It is important now more than ever that politicians take steps to understand the nuts and bolts of industrial change in practice, and how it can be shaped by the state, employers and unions representing the workers and communities affected.”

Editors note

- Report: The full report Industrial transformation in practice can be found here: https://www.tuc.org.uk/sites/default/files/IndustrialTransformationinPractice.pdf

- Summary of case studies in the report:

Bilbao: Bilbao, the de facto capital of Spain’s Basque region, has transformed itself following the 1973 oil crisis and a catastrophic flood a decade later. A world-famous culture sector – symbolised by the Guggenheim Museum – now sits alongside a reduced but still present industrial base. Leadership, collaboration across different levels of government, and the continued role of trade unions have all been important for Bilbao’s journey. Identity and culture, solidarity and co-operation have been key concepts in its success.

Eindhoven: Its previous success based on two major companies, Philips and DAF, Eindhoven began to suffer with the first wave of global offshoring. Yet it has now largely reinvented itself as a major technology node, a textbook example of a knowledge region built on an existing industrial base. Eindhoven’s “triple helix” approach aims to strengthen and accelerate collaboration between national and regional government, business and knowledge institutions in the region. Brainport Eindhoven is seen as a cooperative equivalent to Silicon Valley.

Iceland: Dangerously exposed to the financial services industry, Iceland saw the collapse of its banks after the 2008 financial crisis. During the decade since, Iceland’s recovery has coincided with it becoming the most gender-equal, the most unionised and reportedly one of the happiest places on earth. Small but growing biotech and pharmaceutical sectors sit alongside tourism as key industries. Influenced by trade unions, the Icelandic government maintained high levels of social security after the crisis. This commitment to equality, as well as prosperity, has underpinned Iceland’s recovery.

- A just transition to a greener, fairer economy: The Paris Agreement of the United Nations Framework Convention on Climate Change included a commitment to a ‘just transition of the workforce and the creation of decent work and quality jobs’. As of May 2019, the agreement has been signed by 194 states including the UK. Last week the TUC published a roadmap report for a just transition. The full report is here: https://www.tuc.org.uk/sites/default/files/A_Just_Transition_To_A_Greener_Fairer_Economy.pdf