Brexit, regulation & the changing landscape

Posted on 23 Feb 2017 by The Manufacturer

The latest of The Manufacturer’s Directors Forum dinners held recently in Sheffield, discussed what changing legislation and Brexit could mean for British manufacturers.

We brought together some of the leading lights from industry in the North of England, with discussions chaired by Professor Sam Turner, chief technology officer at the Advanced Manufacturing Research Centre (AMRC), and Dorrien Peters, a commercial litigation partner at Irwin Mitchell LLP.

The evening began with an introduction from Professor Turner to Industry 4.0 and the opportunities that it presents to manufacturers. Industry discussion is dominated by the new technologies coming through, the uses for them and how they can change the entire business landscape for manufacturers. Also, we have recently seen that disruptive technologies and business models can throw up huge questions about regulations and legality.

The Manufacturer hosted a dinner in Sheffield alongside Irwin Mitchell to discuss legislation.
The Manufacturer hosted a dinner in Sheffield alongside Irwin Mitchell to discuss legislation.

Inevitably, the discussion turned to this year’s hot topic – Brexit. While there was a consensus that much of industry has seen their exports become more competitive, industry leaders in the room also agreed that there will always be fluctuations in export competitiveness and that the real issue facing manufacturers when it comes to Brexit is its impact on regulation.

One of the biggest questions in the room was how manufacturers can ensure products remain compliant with EU standards post- Brexit. Delegates said that this is a common topic at board meetings, but also one which is largely left alone on account of there being so much uncertainty.

One delegate described the lengths their firm went to in order to comply with European regulations only 18 months ago; they bought new equipment, retrained staff and even had to rearrange the shop floor. Their worry now is that the substantial outlay on re-tooling and the time spent on re-training could all be in vain.

There was also a common concern that statements on changes to legislation could be hidden in over-arching statements about the post- Brexit landscape which risked making it difficult for manufacturers to extract the information relevant to them. Clarity and communication from government as to what regulatory changes may be in the offing, was agreed as being paramount to maintaining the confidence of British manufacturers.

There was a split around the table regarding export regulations; some delegates were unconcerned and foresaw no significant changes to regulation, while  others believed the government would marry up British standards to those of continental European, therefore having little effect on business.

Some delegates were less optimistic and predicted a huge issue with regulation in the pharmaceuticals and food manufacturing sectors in particularly that could be potentially ruinous to British manufacturers. The government has regularly made the point that the sector needs to export more, but with no certainty as to policy, it remains difficult for manufacturers to plan appropriately.

The discussion also touched on regulation of new technology and business models, in particular the “sharing economy”.  Companies such as Uber, AirBnB and Deliveroo have grown exponentially under this new business model, becoming hugely successful in their respective fields without the cost bases associated with their competitors of owning taxis, hotels or having employees, respectively.

Regulation has come to the fore recently, however, and both Uber and Deliveroo have found themselves under pressure about their employment practices.

Our thanks go to Irwin Mitchell LLP, the UK’s largest full-service law firm, for hosting  The Manufacturer’s Directors’ Forum, and to all of the guests for contributing to the discussions.

To carry on the conversation and discuss what the changing regulatory landscape may mean for your business please contact Dorrien Peters of Irwin Mitchell on 0114 274 4947 or at [email protected].

Opportunities and threats was a theme among delegates: 3D printing was another new technology which the sector had begun to embrace, but which also presented its own challenges; most notably the risk of blueprints for weapons being leaked online and falling into the wrong hands.

This is a threat to innovative manufacturers in particular; blueprints for products could be leaked, similar blueprints become available, presenting businesses with the difficult task of enforcing IP rights internationally and against potentially anonymous sources. Regulation needs to be put in place to protect manufacturers from these kinds of situations happening to them and to promote the utilisation of potentially defining new technologies such as 3D printing.

Delegates discussed how it is not only technology changing in the sector, with business models undergoing a complete overhaul. Servitization has come to the fore; this business model has the potential to secure ongoing business for manufacturers for years to come with the right agreement. Manufacturers need to understand the opportunity; the issue that these long-term service relationships are new to many in the sector and ensuring proper precautions are taken is paramount, effective contracting being just one aspect.

There was unanimous praise among delegates for what organisations such as the AMRC are doing, and their critical function in helping the growth of British manufacturing, by allowing the nation’s manufacturers to do what they do best, which is innovating and created by freeing them of the uncertainty of legislation.