* Industrial strategy aims to boost weak productivity
* Merck and Qiagen to expand UK research operations
* Drug industry remains concerned about Brexit impact (Adds Prime Minister, Business Secretary comments, reaction)
By Paul Sandle and Ben Hirschler
LONDON, Nov 27 (Reuters) - Britain pitched a new strategy for industry on Monday, pledging 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 flagged the plan in January, seven months after Britain voted to leave the EU, 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 131-page document aims to reposition Britain so it can profit from the technological revolution by increasing research and development investment, improving technical education and building better infrastructure.
“At its heart it epitomises my belief in a strong and strategic state that intervenes decisively wherever it makes a difference,” Prime Minister Theresa May said in a forward to the strategy, entitled “Building a Britain fit for the future”.
May revived the once unfashionable concept of industrial strategy shortly before she won the top job in the political turmoil that accompanied the shock Brexit vote of 2016.
In an attempt to underscore the importance of the new strategy, Britain said it had secured major investments from global healthcare company MSD, known as Merck & Co in the United States, and German-based diagnostics company Qiagen .
While the Financial Times estimated the value of the investments at more than 1 billion pounds ($1.3 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.
“There is a pipeline of new announcements of investments over the weeks ahead that we now expect,” Business Minister Greg Clark said.
MSD’s UK and Ireland managing director Louise Houson said the company was working in collaboration with the UK government to build on its “forward thinking and ambitious” strategy.
Under pressure to soothe uncertainty over the impact of Britain’s March 2019 EU exit, May said the strategy heralded a new approach to how government and business could work together. The launch, however, was overshadowed by Prince Harry’s announcement that he is engaged to U.S. actress Meghan Markle.
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 he said Britain’s poor productivity - the amount of output per worker over a given period - was one of the weaknesses that it had to address. Employers say it is difficult to find workers with the skills they require and bottlenecks in infrastructure like roads and railways hinder business.
Last week, 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 for generations.
Britain’s economy is expected to grow by 1.5 percent in 2018, weaker than 2.0 percent growth among the world’s advanced economies as a whole, according to forecasts by the International Monetary Fund.
Rebecca Long-Bailey, a business spokeswoman for the opposition Labour Party, said the strategy was short on detail.
“This is a White Paper made up of re-announced policies and old spending commitments, showing once again that this is a Government short on details and new ideas,” Long-Bailey said.
“Nothing in the White Paper will help give businesses the certainty or incentives they need to invest in the face of the government’s catastrophic handling of Brexit.”
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 UK 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. ($1 = 0.7507 pounds) (Editing by Guy Faulconbridge)