Businesses and government must adapt to ensure manufacturing continues to play a powerful role in the UK economy, or risk being left behind international competitors, according to a new report published today.
‘The Future of Manufacturing: A new era of opportunity and challenge for the UK’ published by Foresight in the Government Office for Science, urged the government to build on existing initiatives.
The report called for the scaling up of funding for the high value manufacturing Catapult Centre, the UK’s key technology and innovation body for manufacturing, to make it even more accessible to small businesses and to enhance the role it plays in connecting academic expertise to industry.
It also said that government policy needs to be informed by data which accurately reflects how manufacturing is connected across the economy and how it is changing and urged the government to draw together intelligence on the sector to inform policy, evaluate the impact of programmes and improve co-ordination across Whitehall.
The report shows manufacturing currently makes significant contributions to the economy, accounting for over 10% of the UK’s gross value and employing around 2.5 million people. It accounts for more than half of the UK’s exports (53%) and around three quarters of business research and development (72%).
It also emphasises that economies with strong, export-led manufacturing sectors typically recover from recessions more quickly than those countries without equivalent sectors.
Business Secretary Vince Cable said: “Britain has a proud manufacturing tradition and the government wants to ensure the sector stays ahead of the curve, leading global innovation and developing, once again, a worldwide appetite for British-made goods. The manufacturing sector is crucial to building a stronger economy – supporting 2.5 million jobs, over half of our exports and about three quarters of research and development. I don’t share the fatalistic view that it will inevitably decline; rather the reverse.”
Government chief scientific adviser Sir Mark Walport added: “The global landscape is changing rapidly, with the rise of new powerful economies like China and India, and the revolution in technology.
“Manufacturing is no longer about just making and selling. It’s about designing, making and serving, with production sitting in the middle and each stage of the process contributing value to the economy.
“To be competitive in the new world, the UK needs to take full account of this and look at manufacturing in an integrated way. This includes recognising the different stages in value creation, keeping up to date with the changing nature of manufacturing and the associated skills needs, and providing a constant policy framework that supports long-term decision making.”
What are the implications for Government?
Improving the speed and co-ordination of the technology pipeline for UK manufacturing: Given the pace of change in technological developments and international competition, the UK needs to strengthen the extended system that identifies and supports new technologies and their applications. The UK’s HighValue Manufacturing (HVM) Catapult Centre, established
in 2011, has a key role in the near term, and is an example of a step that the Government has taken to develop a more systemic approach across research, innovation and industrial policy.
Immediate priorities should be to scale up funding for the HVM Catapult Centre, to promote much stronger involvement of small and medium enterprises in the member centres, and to enhance the role it plays in connecting academic expertise to industry. Longer term, there is potential for the Centre to support international collaboration between manufacturers, for example by establishing a presence in key emerging economies.