Government shows Foresight with report on future of manufacturing

Vince Cable announces his industrial strategy at Imperial College London in 2012.
Vince Cable announces his industrial strategy at Imperial College London in 2012.

The Government has acknowledged the importance of manufacturing to the UK economy and highlighted strategies to ensure it remains competitive with a new report published today (30 October 2013).

‘The Future of Manufacturing: A new era of opportunity and challenge for the UK’ published by Foresight in the Government Office for Science, states that manufacturing is set to enter a dynamic new phase, driven by rapid changes in technology, new ways of doing business, and potential volatility around the price and availability of resources.

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%).

In addition, the report emphasises that economies with strong, export-led manufacturing sectors typically recover from recessions more quickly than those countries without equivalent sectors.

According to the report, looking out to 2050, manufacturing will change considerably by becoming:
• Faster, more responsive and closer to customers: Advances in technologies such as sensors and 3D printing will ‘digitise’ manufacturing. Production will take place closer to the customer, with potential for local and even mobile manufacturing.
• More than just making and selling a product: New sources of revenue will become important, with production and technical ‘know how’ critical. For example, Rolls Royce gained 49% of its revenue from services in 2009, and Arcelor Mittal 29%.
• More sustainable: Manufacturers will need to become more efficient in their use of materials and energy to counter potential volatility in the price and availability of resources.
• More highly skilled: There will be around 800,000 manufacturing roles to fill in the years up to 2020 as people retire or move out of the sector. Jobs will be increasingly highly skilled and well paid.

The report urges government to build on existing initiatives, for example by scaling up 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.

The report also highlights three new areas for government action, which would build on the government’s industrial strategy. These are:
• Better intelligence: Government policy needs to be informed by data which accurately reflects how manufacturing is connected across the economy and how it is changing.
• Better targeting of support: The government has an opportunity to take its industrial strategy to the next level by tailoring policies to specific requirements of industries to support the emergence of new ways of doing business.
• Better capability: The government needs to keep up with the pace of change in manufacturing. A US-style Office for Manufacturing could help government draw together intelligence on the sector to inform policy, evaluate the impact of programmes, and improve coordination across Whitehall.

“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,” said Business Secretary Vince Cable.

Emphasizing an accord between the findings of the Foresight Future of Manufacturing report and government industrial strategy, Vince Cable welcomed much of the content. He highlighted how existing initiatives, including the Manufacturing Advisory Service, and particularly, the Catapults echo and support the trajectories this ambitious report outlines for manufacturing.

Delivering an honest appraisal of the report findings, Cable was however frankly dubious about a suggestion made in the Future of Manufacturing report that UK government should establish a US-style Office for Manufacturing.

“Does changing the machinery of government help?” he asked attendees at the report’s launch. “I feel that one of the strength s of the current government is that it has not played around with the machinery of government.”

In subsequent discussion however, Cable acknowledge that the idea has merit in the context of the multi-departmental, multi-disciplinary stands addressed by a broad vision of manufacturing. “This report makes clear that there’s more to manufacturing than just making things,” he said.

Government chief scientific officer Sir Mark Walport was also keen to emphasize this broader understanding of manufacturing value.

To be competitive in a new era of manufacturing, Sir Mark said UK industry must recognise “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.”

Speaking for and from industry, Dr Hamid Mughal, global manufacturing director at Rolls-Royce plc, urged business leaders to read the full report. “This report will leave manufacturers better informed and better able to define and articulate what their business strategies should be,” he said.

At the report launch Dr Mughal delivered an inspiring presentation on the potential value of embedded knowledge in manufacturing processes – an topic covered in detail in the full report.

“Fault free manufacturing is the ultimate prize,” he enthused before concluding “The future is extremely exciting and plays to our [British industry's] strengths. But it will not come to us of its own accord. We must go out and take it.”

Terry Scuoler of manufacturing body EEF said, “We strongly support the recommendations to increase support for the Catapult centres and expand SME access to them, and the focus on new sources of finance.

“Critically, all parts of government must recognise that manufacturing will continue to undergo a significant evolution in the coming decades and that policies must adapt and evolve with this transformation. Similarly, the report is a must-read for manufacturers to ensure that they too are prepared for the challenges and opportunities that lie ahead. “

Melanie Leech, director-general of the Food & Drink Federation, was pleased that the key drivers identified in the report matched  those identified in 2020, the FDF’s grand plan to deliver 20% sustainable growth by 2020.

Miss Leech said ”To deliver increased rates of sustainable growth will require the industry to attract and retain the best talent.

“We’ll need to ensure that the 170,300 new people we require by 2020 are equipped with the right skills and that’s why the industry is investing in initiatives such as the UK’s first Food Engineering degree to create employment-ready engineering graduates specifically for the food and drink manufacturing industry.”

Download the full report here.

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