China’s changing: and we’ve got what it needs

Posted on 19 Nov 2012 by The Manufacturer

China’s government is holding out carrots and sticks to its manufacturing base to drive forward more sustainable and higher-tech production. As it looks to learn the arts of manufacturing innovation Dr Stephen Hillier, Technology Manager at the Chemistry Innovation Knowledge Transfer Network says there are opportunities for UK companies and explains how his KTN is helping to open them up.

China has a mixed reputation in the manufacturing industry.

Dr Stephen Hillier, Technology Manager at the Chemistry Innovation Knowledge Transfer Network

To some it is a reliable and trusted supplier, ensuring minimal overheads. To others its low prices make competing difficult and its diverse business landscape can be challenging to access and understand – something that can be frustrated by cultural differences, language barriers and an uncertain legislative environment.

As China continues to grow and change its manufacturing industry is beginning the transition to high value manufacturing.  As this transition occurs, mind-sets and reputations change. As they do, opportunities arise for UK technology companies to access receptive companies and work with them for to gain substantial commercial benefits, and to further develop and improve their own world-class technology.

China is the world’s dominant manufacturing economy, and it has become so by allowing the world to outsource to it.

It is full of factories making fairly straightforward, uninnovative products, often in dirty, inefficient environments. This strategy has served them well, but as wages go up and China raises its ambitions, it has recognised the need to develop smarter, cleaner and more efficient manufacturing.

To this end it has introduced legislation to get big manufacturing to go greener.

The government wields a lot of power over China’s big businesses – many of which are state owned enterprises (SOEs) – and is putting serious pressure on them to become better, smarter and cleaner.

China has committed £1 trillion over the next five years across key high-tech sectors, including high value manufacturing. There are significant carrots and sticks.

This presents huge new opportunities for developed manufacturing economies.

To ensure the UK is first among them, The Technology Strategy Board and the UK’s China Science and Innovation Network are funding a Sustainable Manufacturing Mission to China.

The goal is to enable the UK’s high technology SMEs and key large companies to build effective business links with the Chinese manufacturing sector.

We want to establish collaborative research that allows UK companies to develop and commercialise new products and processes.

We can draw on China’s capabilities and resources to advance our own technology offerings, whilst helping China clean up its manufacturing. Resources for R&D in the western world are increasingly limited; partnerships with emerging economies like China are a key way to retain and develop our world-leading manufacturing capabilities.

The UK has the capability that China now wants.

We have expertise in high value bespoke products, we have spent years greening our factories and processes and we understand the latest technology for advanced manufacturing. China has money to invest and people who are keen to work on collaborative projects. We have the capabilities to innovate and skills to benefit from this.

For example UK factories have the latest control systems which can identify and manage how much energy a site is using. These are fairly undeveloped in China but will be essential to meeting emissions reductions targets – there are huge opportunities to develop these collaboratively to ensure the UK benefits from China’s new strategy.

We also have considerable expertise in techniques such as substituting substances with lower environmental impact into existing materials; recycling and re-use of materials; and approaches to decreasing the total mass of material deployed in production. China often works with different materials and different technology, and both parties can benefit from combining their skills and understanding.

Despite its low value reputation, China has plenty of expertise that can benefit UK businesses.

Its commercial landscape, once opaque and poor on intellectual property, is changing.

The Chinese government also has money to invest heavily in sustainable, high value manufacturing projects, and has a demand for our capabilities – something not many people can say right now.

Although not the primary focus of the KTN mission, it is expected that there will also be opportunities to directly sell technology or consultancy to the Chinese market.

The mission is fully funded for UK SMEs, and larger companies will also be generously funded.

It is being managed by the Chemistry Innovation Knowledge Transfer Network, which is responsible for securing interest, managing the logistics and liaising with Chinese partners to identify opportunities and further funding. This will give real opportunities to penetrate the Chinese market.

The approach will be based on the recent Sustainable Manufacturing for the Process Industry funding call, which was successful in developing such projects through collaboration in the UK.

We are looking for delegates with innovative technologies, which are in need of funding and support and could benefit from working with a Chinese partner. Delegates will be accepted onto the mission based on the strength of their technology offering, and the level of interest from the Chinese participants. Those selected will be invited to a funded trip to China in autumn 2013, after which a joint Chinese-UK funding call should facilitate key collaborations to begin in earnest.

Anyone wanting to get involved should email [email protected].