“2012 has not been an easy year for UK companies to remain confident about their prospects.
The eurozone crisis has dominated the news and will likely do so for some time to come. Growth in the UK economy is flat or negative [ONS figures out July 25 suggest the latter]. Signs of a recovery, or green shoots, have been few and far between.
High tech manufacturing has long been identified as integral to the nation’s future growth. But you would be forgiven for thinking that businesses in this sector were as pessimistic as any about their prospects. Pleasingly though, there are indications that despite the wider economic uncertainty, the sector is confident and is showing some extraordinary resilience.
Every six months GE conducts a survey of high tech manufacturers in the UK, ranging from manufacturers of cutting machines for composite materials in Essex to manufacturers of crane hoists in East Kilbride. The survey checks the temperature of a sector that is a core component of GE’s business in the UK, and of vital importance to the national economy.
The fourth and most recent of these surveys was conducted in June this year. It found that over three quarters of the 400 plus companies taking part were positive about the current performance of their own business. They share this sentiment despite significant concerns about the future of the UK’s economy. It is a trend that has stayed constant over the last 18 months, despite a brief dip in sentiment at the end of last year.
Encouragingly, the latest results also highlight increasing entrepreneurialism amongst these businesses. They are adapting to economic challenges by exploring opportunities for exports to emerging markets. There are also some signs that our high tech manufacturers are sourcing more materials locally in the UK, rather than from countries in the Eurozone.
This all sounds very positive and we are right to feel encouraged by it. But there is no room for complacency. Many of these high tech manufacturers still face significant day to day challenges. These are challenges for which they have to find solutions in order to stay afloat, let alone grow.
The UK’s shortage of engineers is no secret, with 71% of high tech manufacturers retraining new hires and current staff to overcome this deficit. But the sector will not be able to drive the economy forward without an experienced workforce.
In November last year, the National Composites Centre was opened to provide a specialist skills base for advanced composite technologies. The research facility, which is supported by GE, is exactly the kind of initiative that we need to bridge the skills gap.
Access to finance also remains an issue within the high tech manufacturing sector – though according to the latest wave of this survey, businesses are divided on where they stand on this. It is critical that those who want to grow are provided with the means to do so.
Where strong business cases exist for the expansion of high tech manufacturers at home and in their operations abroad, financing has to be made available on terms that are acceptable to both parties.
Notwithstanding the current positive confidence of high tech manufacturers, in the current uncertain times it is difficult to try to predict whether this confidence can be sustained. What is certain is that we must do all that we can to ensure that businesses in this sector are provided with the support they require to drive our economy forward.
This year the London Olympic and Paralympic Games has given us an opportunity to showcase the ‘Best of British’.
Whether we are in a position to do this in 10 or 20 years’ time as well will depend on the backing we give to our high tech manufacturers today. There has been a significant debate about how to go about this. Now it is time to roll out a comprehensive plan of action.”