Ben Carpenter Merritt
Policy Manager, Manufacturing, Policy Connect
With trade wars and waves of nationalistic discontent impacting global markets, British industry faces serious challenges. Government and industry must act now to avoid falling behind.
From rising material costs to skills shortages, manufacturers are having to work harder than ever to stay competitive.
Traditional industry in the UK is also experiencing a productivity-growth slowdown, which has seen it fall behind its European peers.[1] This gap is now being further accentuated by the advent of digitisation, as other countries seize the opportunity posed by this fourth industrial revolution.
We must support SMEs
While huge leaps have been made by many of our global companies, the UK still has a ‘long tail’ of less productive companies – typically smaller businesses – who are lagging behind their international competitors.
We must act to support our SMEs, close the gap with our competitors and grasp the opportunity to address our productivity challenge. To do so will require positive action by both business and government.
Affordable industrial digital technologies present an incredible opportunity for our manufacturing sector.
The Industrial Strategy provides a strong base from which to strengthen the UK manufacturing sector, but government must take it forward proactively regardless of external events or changes of government.
To ensure the Strategy is used over the long term to drive the solutions needed, the Industrial Strategy Council should be relaunched as a statutory body, drawing on the learnings of the huge successes of the Committee on Climate Change.
Uptake of digital tech will bolster production
However, providing stronger oversight and continuity is only part of the solution. We also need to solve the issues with adoption of industrial digital technologies (IDTs) among that long tail of less productive companies.
To do this will require more manufacturers to be magpies, rather than ostriches; that is, to look for the opportunities in technology adoption, not stick to what they know.[2] But to do this, businesses and their leaders will need support.
Two things now need to happen, as a matter of urgency. Both build on the successes of the Made Smarter pilot in the North West, where the first 60 businesses engaged are already forecasting an additional £45 million in gross value added to the region’s economy[3].
First, the government should add to the Made Smarter programme drawing on the learnings of other models that have sprung up across the country such as Liverpool’s LCR 4.0 and the Sustainable Advanced Manufacturing programme, in Sunderland. And then, very quickly, this up-rated Made Smarter programme must be rolled out across England.
The advent of affordable industrial digital
technologies presents an incredible opportunity for our manufacturing sector,
but government must act to support adoption among the SME industrial base. The
countries who seize this opportunity will shape the future and those who fail
to do so will be shaped by it.
[1] McKinsey, 2018. Solving the United Kingdom’s productivity puzzle in a digital age. McKinsey Global Institute. Online. Available at: https://www.mckinsey.com/featured-insights/regions-in-focus/solving-the-united-kingdoms-productivity-puzzle-in-a-digital-age [Accessed 28 October 2019]. | [2] CBI, 2017. From Ostrich to Magpie. CBI. Online. Available at: https://www.cbi.org.uk/articles/from-ostrich-to-magpie-increasing-business-take-up-of-proven-ideas-and-technologies/ [Accessed 28 October 2019]. | [3] Made Smarter, 2019. Figures supplied directly.
