A new report out today is urging the government to accelerate plans for a new industrial strategy in order to support manufacturers’ post-Brexit growth ambitions.
The report, published by EEF and Natwest, calls on the government to speed up plans to introduce a “consistent and coherent long-term” industrial strategy to ensure that manufacturers’ growth ambitions are fully supported across the pre- and post-Brexit divide.
A copy of the report– Manufacturing Ambitions: an industrial strategy for a stronger economy – can be downloaded here.
It makes clear that swift implementation is vital if growth ambitions are not to be allowed to fall by the wayside, particularly while the UK steers its tricky way towards Brexit.
The report’s call is reinforced by a recent 2,000-strong poll which revealed that 90% of UK adults agree that the UK needs a comprehensive, long-term industrial strategy, and 86% also said that they want the government to promote a stronger manufacturing base in Britain.
Industrial strategy – goals for growth
The report welcomes the fact that a UK-wide industrial strategy is back on the government’s agenda and says that it must clearly set out the government’s goals for growth, backed by policies which deliver a more skilled workforce; more resilient infrastructure; a lower cost of doing business, and better support for growing businesses.
The study shows that 76% of manufacturers are going for growth, while 71% have a three to five-year business plan in place to back up their ambitions. The sector already has a strong track record on productivity and, encouragingly, there is every indication that this is set to continue; with 63% focussed on driving up productivity, while margins (71%) and sales (64%) are also key targets in growth plans.
Innovation and the introduction of new business models are coming to the fore as companies pursue growth. More than 90% are either already increasing innovation efforts (63%) or plan to do so within the timeframe of their current business plan (29%).
Manufacturers have also been quick off the mark in spotting the growth opportunities from servitization (providing services to complement product sales), with more than 40% already actively providing services, while a further 27% have it targeted within their business plans.
Collaboration is vital
Supply chain collaboration is, however, seen as even more critical to growth, with 52% already enhancing cooperation in areas such as production, design and development, and a further 26% planning to do so. The depth of collaboration may be a surprise to those outside of industry, with 67% of manufacturers already working with their supply chain on product design and development.
Other key areas for supply chain co-operation are in customising offers to customers (67%) and forecasting demand (60%). And while manufacturers see a range of activities as having a positive impact on productivity, 10% say that greater supply chain collaboration would provide the biggest boost.
While identifying some strong positives, the report also points out that the current trajectory of manufacturers’ business plans still falls short of where the sector needs to be by 2026.
And, while companies can innovate and work hard to tackle many of the internal and supply chain challenges they face, creating the right business environment through an ambitious, comprehensive and long-term industrial strategy spanning all government departments will be critical to support growth.
CEO of EEF, Terry Scuoler explained: “It is not enough to talk about an industrial strategy – it is time for the government to draw a line under the stop-go efforts of the past and to demonstrate its commitment to industry by putting some much-needed flesh on the bones.
“Manufacturers are not just talking about future growth – they have firm plans in place to make it happen. Their ambition and drive will help get the sector and our economy on the road to stronger, better-balanced growth, but this must be matched by government. If we are to stay the distance and realise the full benefits for the UK then complacency is not an option.”