A consultation paper revealed in Parliament yesterday suggested that engineering companies in the UK can benefit from a global market for engineering services worth £1 trillion by 2025.
The research paper, published by the EPSRC Centre in Through-life Engineering Services and debated at a House of Commons event, shows that engineering services are strategically important to the UK with a domestic market worth from £30 billion to £40 billion annually over the next few years.
The Manufacturing Services Thought Leadership Network (MSTLN) consists of manufacturers who wish to learn more about and support others who are moving towards business models orientated around high margin product services as opposed to the traditional make it- sell it models of manufacturing.
The MSTLN Annual Conference will explore how to implement service centric business models through product services with real life case studies.
Engineering services provide high value jobs with wages averaging £42,000 per year, some 50% higher than the manufacturing industry average. There are around 6,000 companies engaged in these support industries, employing some 107,000 people in the UK.
The report also shows these services can save companies millions of pounds in maintenance costs and support industrial sustainability by reducing waste. They promote UK supply chain development as well as creating new revenues from services, with some manufacturing companies already generating over half of their income from services.
A national initiative to define ways that the UK can capitalise on this global business opportunity was debated today at a Houses of Parliament conference involving some of the UK’s leading engineering organisations including Rolls-Royce, Bombardier Transportation, BAE Systems, Babcock International and the UK Ministry of Defence.
Some of the UK’s leading manufacturers agree that more cross-industry collaboration is needed to maintain and grow the UK’s share. “Collaborative development of capability in through-life engineering services will be key to future success in a world where technical innovation is demanded in both products and services,” said Dave Benbow, Head of Engineering for Services at Rolls-Royce.
The initiative will be co-chaired by aero-engine company Rolls-Royce and the High-Value Manufacturing Catapult, the public-private funded technology innovation network. “The value in high value manufacturing is increasingly in the provision of services surrounding the product. There are big opportunities for the UK to exploit new value streams with the guidance provided from a national strategy,” said Dick Elsy, chief executive of the High Value Manufacturing Catapult.
Senior engineering personnel attending the conference maintained that developing the engineering services skills base will provide value to the wider UK economy by more effectively manufacturing and maintaining long-life, high value products, assets and infrastructure, as well as raising national productivity by increasing high-value employment.
A national, strategic approach to engineering services is expected to be developed by late-2016. It will aim to deliver performance improvements in these services over the following three to four years.