British engineering – World Class comes as standard

[preamble removed]

“Coming back to Wakefield on the train from the Olympic stadium I was thinking about the theme of tonight’s speech when I was interrupted by the conductor – this is a true story – apologising for the slowness of the train.

We were, he said being held up by the weight of the medals that were being carried back up North.

And that got me thinking about what it means to be world class.

And here comes the bluntness of a man from my county.

For never ask a man if he is from Yorkshire.

If he is, he’ll have already told you.

And if he isn’t, then why embarrass the poor lad?

And so my message, bluntly to you tonight is
British Engineering – World Class comes as standard.

Now when we say world class we think of our dynamic aerospace industry, we think of our four UK universities in the world’s top ten, our strong automotive industry, and a sector full of knowledge based high technology operations.

But now we have to take the next step, and make world class come as standard right across our sector.

But how do we do this in a volatile fast changing marketplace?

If the recent economic downturn has had any benefit for our manufacturing sector, it is that there is new recognition that advanced engineering as a world class, wealth creating, research and development intensive, knowledge based sector has a critical role to play in our nation’s economic recovery.

In this respect we are on an upward trajectory.

We have had to work hard for the recognition we have gained.

But yet we still have to be leaner, fitter and more agile to be world class.

In fact for world class to come as standard there are three areas, what I call the three ‘I’s, that I believe are critical.

The first ‘I’ is Internationalisation.

We can be proud of our heritage.

Many of you will have read the Commemorative Book that the MTA has published to mark One Hundred years of MACH in October.

One of the things that struck me when looking at some of the material collected for this publication was the number of international connections our association’s members had developed, even 100 years ago.

And now that many of the trade barriers and borders of the 20th Century have been dismantled, the world is becoming truly global again.

But the difference is that the rules of the game are no longer set by a handful of countries either side of the Atlantic

But by a much larger global group of nations of which we are but one player.

My own company, Group Rhodes exports to 30 different countries around the world every year and looking around the room I can see many of you who need two passports to fulfil your international interests and know just how glamorous business travel is; the lost sleep, the lost luggage, the wondering if the 20st guy in the next seat even knows what a toothbrush is.

But that means that you also know the special thrill of gaining orders in new markets; of beating the best the world has to offer, of walking back into the factory or office on Monday morning knowing that you have secured the jobs and futures of many of the people that greet you.

The MTA has strong track record of working with external organisations such as UKTI to promote overseas trade amongst its members.

I sit on UKTI’s Advanced Engineering Sector Advisory Board and what come across to me time and time again as I visit the most innovative, focused, and agile businesses, many of whom are represented here tonight, is that they have a strong international strategy.

They identify a market need, they work to ensure that their product and business model meets that need and they realise that they must keep flexible and evolve to stay relevant to changing market conditions.

For with an internationalisation strategy comes so much more.

Companies that begin to export see an average 34% productivity uplift and their diversified customer base means that that they are more likely to survive if the economy takes a turn for the worse.

And so of World Class to come as standard in British engineering – you need an internationalisation strategy.

That is the first ‘I’.

The Second ‘I’ is investment.

When we talk about investment, the issues that most commonly come to mind are an investment in people, machinery and research and development.

I will come to people later, but as far as the second ‘I’ is concerned let me say something about research and development, and investment in capital equipment.

As MTA members we pride ourselves on providing the best kit in the world to British manufacturers.

But are we developing the technologies that we need for the future?

Commentators can fall into the trap of believing that innovation is something that only happens in labs carried out by fearsomely clever PhD’s who discover that, with sufficient thrust, pigs fly just fine!

But that is the wrong picture.

There are companies in this room who are already collaborating with the finest minds in the best institutions on the planet.

The new Catapult Centres provide one model of how to manage university/business collaboration.

However it is one of the strengths of our flexibility as a sector that there are many different models that can be followed in order to develop collaborations with Universities.

Knowledge Transfer Partnerships for example are another way forward.

There is no right or wrong way to get to world class;

But to make world class come as standard we must all access the intellectual power that resides in our institutes of higher education.

It is there – tap into it.

It is also true that British companies invest less in R&D than their competitors.

Indeed the UK has underinvested in this area for many years now, with the best standing out against a backdrop that is relatively disappointing.

I believe that our manufacturing businesses need to invest between 5 and 10% of their turnover in research and development.

And there are many companies in the room who can say that they are already doing just that, but equally there are too many businesses in British manufacturing for which such a target represents a challenge they are either not willing or are not able to meet.

Personally, I do not think that there is a choice.

If we do not invest at this level we will not remain world class.

The technology change cycle is getting faster, markets never stand still and so how can we?

We can’t.

There really are no excuses.

And speaking of excuses, we recognise that in today’s economic environment the Chancellor of the Exchequer has a thankless task, but in my speech at our House of Commons Reception in December, I had cause to thank him and his colleague, our guest Michael Fallon MP.

By increasing the Annual Investment Allowance to £250,000 in the Autumn Statement he made the biggest single improvement to the UK’s lamentable investment tax regime for a generation.

I am proud that the MTA played a key role in securing that change, keeping ‘on message’ when larger, cross-sector organisations felt it expedient to let it fall by the way side.

But the changes the Chancellor made to the annual writing down rate still mean that the UK’s overall position in this area is worse than it was five years ago, and more importantly worse than it is in most of our competitor countries.

That is not a way to increase productivity, that it is not a way to improve competitiveness, and that it is not a way to become World Class.

Government and industry need to step up to the investment challenge now, and we at the MTA will keep pressing for change.

Internationalisation and Investment are two of the three ‘I’s, critical if world class is to come as standard.

The third and final ‘I’ is Inspiration.

This is the most difficult ingredient to capture; it is in effect the secret sauce of this world class dish.

I am passionate about engineering, about the skills of our people and the innovation of our firms.

I want to know how things work and how they can be made better.

A couple of years ago I went back to school, not primary school as one of my friends suggested at the time, but business school, to improve my knowledge of manufacturing.

The reason why I did that was because I felt challenged by some of the young graduates that we were employing, many from India, who were coming into my business with new ideas and questions, new theories on product development, and new paradigms on structures to optimise innovation.

They led me to ask myself how, as a business we could do things differently.

They inspired me, gave me clarity and made me aware of new possibilities.

Inspired engineering is how we as human beings make our world a better place to live.

It is how engineering retains its position as a major part of our national economy, and it is why British Engineering = Best Engineering.

And there are incredible innovations coming out of Britain from the world’s best engines to the world’s thinnest materials,

Engineering is something we are good at, and I want to take the opportunity of my Presidency to shout about it, and shout about it all over the world.

My legacy as President will be to ensure that we link into the creativity, the invention, and yes, the inspiration that is at the heart of our culture as a sector.

I want to do that by encouraging networking and best practice, by providing access to external intelligence, and by helping you as members develop your employees.

To paraphrase the strapline of the Olympic Games, we need to inspire a generation… a generation of engineers.

If we do not train our people, if we do not inspire them to achieve, how can we expect them to perform as we would like them to?

And if we do not develop them as individuals, how can we expect to stop them going to someone who will?

We hold the future of the industry in our hands.

Take a quick look around the room.

I think the average number of women on each table is a number which is nearly one.

We are, I read, 27th out of 28 EU countries in terms of the number of female engineers we employ.

And as I thought that there were only 27 countries in the EU,
I was trying to work out which traditional nation we were ahead of.

Bad news – after the Papal election this month – I reckon it’s still the Vatican City.

We are facing a shortage of good engineers and technicians, and we are not tapping into half our population.

To be world class we need to inspire our young people, both male and female to come into engineering and manufacturing at every level – that is something for which we must all take responsibility.

It is also essential that we inspire the talent that we already have in our companies to be world class.

That is why the MTA has taken the decision to fund the accreditation of an Apprenticeship Framework aimed at our future commercial engineers.

These people are the world class value-adders of the future.

We have worked with the Advanced Manufacturing Research Centre to come up with a programme that we believe will pay dividends to many MTA member companies, and I was delighted that the Deputy Prime Minister was able to attend last month’s launch.

The Government has challenged Business to get involved in developing new approaches to apprenticeships;
to inspire the next generation; to instil world class as standard.

The MTA has done just that.

We have risen to that Challenge.

I want to finish by crystallizing the challenge that I see.

The three ‘I’s critical to our world class success;
Internationalisation,
Investment,
and Inspiration
are what will enable us to go out and beat the best.

I want Britain’s entire engineering based manufacturing sector to be the envy of the world.

I don’t want second best
I don’t want ‘well it’s always worked before’

What I want is; Our companies, Our technologies, Our Association

to be confident that when we say ‘British Engineering’ – World Class Comes as Standard.

Thank you.”