New digital dawn for UK manufacturing

Man­u­fac­tur­ing is a mon­ey­mak­er for the UK. Con­tribut­ing some 11 per cent of total eco­nom­ic val­ue, the sec­tor makes more than £1 in every £10 going into the nation’s pock­et.

What’s more, the pub­lic know this to be true: some 70 per cent agree the UK can­not tack­le future prob­lems with­out a strong man­u­fac­tur­ing sec­tor, accord­ing to a sur­vey car­ried out for Make UK, The Man­u­fac­tur­ers’ Organ­i­sa­tion.

For all its suc­cess, how­ev­er, man­u­fac­tur­ing in the UK needs to devel­op and change, if it is to con­tin­ue as a dri­ving eco­nom­ic force for
future gen­er­a­tions.

The good news is that the sec­tor is not short of ideas. Vis­it­ing hun­dreds of man­u­fac­tur­ing busi­ness­es over the last 12 months, Make UK chief exec­u­tive Stephen Phip­son has been struck by the lev­el of clever inno­va­tion hap­pen­ing all around the coun­try. “Whether big or small, every enter­prise has an inno­va­tion sto­ry to tell. How they have sur­vived and thrived is often down to think­ing dif­fer­ent­ly about both prod­uct and process,” he says.

“As a result, this dif­fer­en­tia­tor comes through very strong­ly for the UK in our brand rep­u­ta­tion with­in export mar­kets. Inno­va­tion is our unique sell­ing point; inno­va­tion in every­thing we do.”

Man­u­fac­tured goods account for about 44 per cent of total UK exports and this rev­enue stream is a mag­net for inward invest­ment. It is why so many house­hold glob­al names are here.

The lat­est fig­ures put the UK ninth in the world for man­u­fac­tur­ing by val­ue of out­put; how­ev­er, this sto­ry is not well under­stood by the gen­er­al pub­lic. In fact, the same sur­vey respon­dents, who con­sid­er the sec­tor impor­tant to the nation’s eco­nom­ic future, actu­al­ly guessed the coun­try came as low as 56th in the rank­ings, a posi­tion cur­rent­ly held by Kaza­khstan.

Indeed, prob­lems with pub­lic per­cep­tions of the man­u­fac­tur­ing sec­tor are prov­ing a sig­nif­i­cant obsta­cle to progress in the UK. For instance, only 17 per cent of peo­ple sur­veyed realise aver­age earn­ings in man­u­fac­tur­ing exceed those in the wider econ­o­my.

This fail­ure to com­mu­ni­cate car­ries poten­tial­ly seri­ous con­se­quences in terms of human resource. Man­u­fac­tur­ing already employs around 2.7 mil­lion peo­ple in the UK and ris­ing demand for engi­neer­ing skills could mean as many as 265,000 new recruits a year through to 2024. Get­ting and keep­ing suf­fi­cient skilled bod­ies on board, there­fore, calls for sig­nif­i­cant uplift in attrac­tion and reten­tion of tal­ent, plus retrain­ing.

The chal­lenge begins with the edu­ca­tion sys­tem, right from pri­ma­ry school lev­el upwards, argues Mr Phip­son. “We need to attract young peo­ple into this pro­fes­sion. How­ev­er, over the last cou­ple of decades, design and tech­nol­o­gy in schools has almost dis­ap­peared, with the sys­tem skewed towards get­ting more and more peo­ple into uni­ver­si­ty. The upshot is a gap in inter­me­di­ate tech­ni­cian-lev­el skills,” he says.

“This skills gap has large­ly been filled by the free move­ment of labour from Europe, with a lot of the 300,000 EU nation­als cur­rent­ly employed in man­u­fac­tur­ing work­ing as tool­mak­ers, machine-set­ters, CNC [com­put­er numer­i­cal con­trol] pro­gram­mers and the like.”

With Brex­it on the hori­zon, how­ev­er, avail­abil­i­ty of this sup­ple­men­tary skills resource hangs in the bal­ance. There­fore, man­u­fac­tur­ers are increas­ing­ly look­ing for learn­ers with a com­bi­na­tion of voca­tion­al and aca­d­e­m­ic pro­files, which is what makes degree appren­tice­ships so attrac­tive.

Com­pli­cat­ing recruit­ment mat­ters more, though, gen­der bal­ance has also been a work­force issue in man­u­fac­tur­ing, his­tor­i­cal­ly. Nation­al sta­tis­tics show women only make up 24 per cent of employ­ees, bare­ly one in four. They rep­re­sent just 11 per cent of engi­neers and 15 per cent of engi­neer­ing grad­u­ates.

While the sec­tor itself is respond­ing, greater urgency is need­ed, as well as a more sys­temic approach to work­ing with edu­ca­tors and pol­i­cy­mak­ers to address struc­tur­al issues.

The recent Rein­vent­ing the Man­u­fac­tur­ing Work­force report from Make UK revealed the major­i­ty of man­u­fac­tur­ers, some 72 per cent, are intro­duc­ing or con­tin­u­ing for­mal appren­tice­ships to help secure the skills for the future. Slight­ly more are offer­ing agile ways of work­ing to retain exist­ing employ­ees, plus over half offer flex­i­ble forms of employ­ment.

Alto­geth­er, devel­op­ing a mod­ern, youth­ful, diverse and appro­pri­ate­ly skilled work­force fit for 2019, Brex­it and beyond calls for some­thing of an image makeover on the part of UK man­u­fac­tur­ing. Spear­head­ing this charge will be Make UK, pio­neer­ing a proac­tive stance to update per­cep­tions and broad­en appeal.

Core to a new vision for the sec­tor is the pos­i­tive impact of the fourth indus­tri­al rev­o­lu­tion (4IR). Digi­ti­sa­tion is trans­form­ing much of man­u­fac­tur­ing already and its influ­ence will only con­tin­ue to dis­rupt the world mar­ket, in a good way, explains Mr Phip­son. “Over­whelm­ing­ly, 4IR pro­vides a fan­tas­tic oppor­tu­ni­ty for the sec­tor in the UK. In truth, we have lagged behind some­what on digi­ti­sa­tion, but that future catch-up fac­tor only serves to make the size of the prize even big­ger,” he says.

“Digi­ti­sa­tion is not just the domain of major play­ers, though. Invest­ment of £1,000 in smart sen­sors on a CNC machine could har­vest data and dou­ble SME [small and medi­um-sized enter­prise] pro­duc­tiv­i­ty with­in a month.

“Change at scale and pace will, how­ev­er, require sub­stan­tial reskilling of an exist­ing work­force new to such areas as data ana­lyt­ics. There­fore, we are very pleased that gov­ern­ment pol­i­cy under the Indus­tri­al Strat­e­gy is sup­port­ing this with the Made Smarter ini­tia­tive and £147 mil­lion of allo­cat­ed bud­get to help tech­nol­o­gy dif­fu­sion become a real­i­ty up and down the sup­ply chain.”

Make UK research sug­gests 43 per cent of man­u­fac­tur­ers have moved beyond the ini­tial con­cep­tion phase on 4IR into the evo­lu­tion phase, where cur­rent busi­ness prac­tice is opti­mised with new tech­nolo­gies. In short, they have moved from think­ing to doing. That still leaves a major­i­ty yet to invest. For UK man­u­fac­tur­ing to remain a future mon­ey­mak­er, how­ev­er, 4IR is a must. The future is inescapably dig­i­tal.

Mr Phip­son con­cludes: “The effects of digi­ti­sa­tion are going to touch every­thing. Instant mass cus­tomi­sa­tion of prod­ucts means man­u­fac­tur­ing in real time, on demand, using state-of-the-art tech­nol­o­gy, such as 3D print­ing. It will rev­o­lu­tionise the way we make things.

“While the risk is real, the oppor­tu­ni­ty is huge. With our genius for inno­va­tion, backed by a con­sis­tent pol­i­cy frame­work, plus an image makeover, 4IR is a new dawn for man­u­fac­tur­ing in the UK.”

For more infor­ma­tion please vis­it makeuk.org