Can the government’s new industrial strategy kick start a renaissance in UK manufacturing? Does the will exist among politicians, educators and business leaders to make it happen? The consequences of failure could be severe. Editorial Director Nick Peters reports.
In February this year, the UK government issued a green paper calling for consultation from industry on the development of a new industrial strategy for the 21st century.
The consultation process involved research and debate across the entire spectrum of business, from retail to services and, most importantly as far as we are concerned, manufacturing.
The spearhead of the manufacturing consultation is the Industrial Digitalisation Review (IDR), conducted by a team of senior manufacturers, academics and trade representatives, led by the CEO of Siemens UK, Jürgen Maier.
We won’t know the final shape of the package that will emerge because negotiations with government are happening as we speak. The fuller picture will probably emerge with the industrial strategy white paper in November.
What we can offer you is an outline of the Maier team’s interim report (the full interim report is available here), together with thoughts and comments from ourselves and our Editorial Advisory Board.
The need for a new relationship between government and manufacturing has never been stronger. From the 1970s onwards, there has been an assumption in government, and society as a whole, that the driving force of the UK’s future was services, particularly the financial sector.
Manufacturing received precious little attention. Education was skewed towards academia; tech colleges became universities and a skills gap of disturbing proportions opened up.
Government support for business and manufacturing has been piecemeal and uncoordinated: “An ineffective and confused landscape of business support, with no clear route to access help and ambiguity about what good looks like,” as the report says.
While the rest of the industrialised world was getting aboard the robotics revolution, UK businesses proved reluctant to invest.
This could have been the consequence either of a lack of confidence in the direction of economic travel in the UK, a lack of understanding of the benefits, an inability to find skilled workers to use new technologies or the fact that investment could be postponed because low-cost labour enabled short-termprofit taking. Or all of them.
This reluctance to invest has translated into poor uptake by SMEs in particular of new digital technologies broadly assembled under the umbrella of Industry 4.0.
The goal of the IDR team’s negotiations with government is to apply a swift corrective to the mistakes of the past and bring UK manufacturing up to speed with the rest of the world. And given the brilliance of our innovation and design, maybe even get ahead. Can it be done?
The IDR Interim Report
There are three recommendations, but currently in headline form only. The ongoing discussions with government will add flesh to the bones, we are told.
A ‘moon shot’ – the Apollo space programme of the 1960s was the catalyst for advancing a number of new technologies. The Review says the UK needs something similar to project the UK’s ambition to a UK and a global audience via a full-blown messaging and marketing campaign.
This would be supported by a much more tightly integrated ecosystem that plugs many of the resources currently available through the Catapult network and university tech centres, creating a Digital Technology Commission (DTC) and Digital Research and Innovation Centres for key technologies such as additive manufacturing.
From this would flow a series of initiatives aimed at persuading SMEs to adopt digital tools, supported by mentoring and financing. Communication would be via Local Economic Partnerships (LEPs) at the local level.
Industry, government and academia will promote education and training in digital skills via a virtual Institute of Digital Engineering, combined with a much broader outreach programme into schools.
Tax incentives will encourage investment, and the adoption of clearer standards for both digital technologies, to allow different systems to work together, and ownership of data.
Better exploitation of top-flight innovation will be achieved through strengthening connections between start-ups, SMEs, academia and wider industry. Promotion of the opportunities available should encourage greater interest from the investment sector.
The devil, as always, is in the details, and we should all be keenly focused on what package emerges at the end of it. As the IDR Interim Report says: “Industrial Digitalisation is a massive opportunity for the British economy.
“Get it wrong and we will de-industrialise more, and rely on imports even more than we currently do. Get it right and we find the key to rebalancing and strengthening our economy and create many exciting, new and well-paid jobs – leading to a renaissance for the UK as a nation of ‘creators and makers’.”
The view from The Manufacturer
“There is a once in a lifetime opportunity for UK manufacturing to overtake similarly-sized manufacturing sectors in France and Italy and close the gap on Germany. What the sector needs is a radical and bold plan for the future that sees government, academia and manufacturers all working in harmony and striving towards the same goal, a productive, innovative, efficient and world-class manufacturing sector.
“There are alarming discrepancies within manufacturing organisations in the levels of understanding and comprehension of this digital revolution, particularly at SME level. Government really does have to find a cost-effective and efficient way to convey the digital message and encourage SMEs on the journey.
“What we absolutely do not need is more well-intentioned but muddled initiatives that tie small organisations up in red tape,” Henry Anson,managing director, The Manufacturer.
The view from members of The Manufacturer Editorial Advisory Board
“Creating a Digital Technology Commission may serve just to complicate the picture even further, unless it is fully supported by all the current government departments who have interests in this area. But how will we get five ministers and their departments all singing from the same hymn sheet and giving a coherent lead on Digitalisation?
“My fear is that not only will they not have the same hymn sheet they will probably be using different hymn books, possibly in different languages. It is critical they all at least start with a common objective shaped by industry, educating children with the right skills from primary through to HE, development of current staff through upskilling and adult apprenticeships, and a clear strategy to support innovation, particularly from SMEs.
“Specific tax incentives for SMEs would work well to increase adoption (of digital technologies). The system of incentives needs to be simple and clear to be taken up broadly. Some other countries have best practice in this respect that we could follow,” Roy Haworth, Engineering Integration Manager, Airbus Defence and Space.
“I don’t think spending more money on marketing the idea of Industry 4.0 is going to help. Most manufacturers who have any capability are aware of it, they just don’t have the resources, mainly in skills. In terms of leadership, I think there needs to be more hard examples given of how this has worked for companies – preferably not just the multinationals.
“The idea that LEPs are going to be the route for support is laughable. The board of most LEPs is generally dominated by civil servants from local government, and there is not the expertise or understanding for them to raise their game to this level.
“I think the way to go would be to set up a regionally-specific grant awards board, made up of experienced and knowledgeable business people and academics. I would like to see more emphasis on commercialisation – we have a terrible record in the UK. The R&D piece is the start, but the commercialisation is often where it falls over. I can’t see much in this report about support for that,” Jan Ward, CEO, Corrotherm.
“The 10 pillars (outlined in the government’s industrial strategy green paper) look to cover all aspects of business and industry, but to be a long-term strategy they need to be cross party, and have direct input from business leaders, councils and LEPs.
“For a real look to the future, the focus must be on engaging with the next generation, showing what business is, and more importantly showing the opportunities that exist within the manufacturing sector. Only by producing product, only by being the ‘creators and makers’, can this country look to raising GVA, look to supporting its local regions and make sure there are employment opportunities for all.
“Closing the skills gap, engaging with the next generation, and promoting business must all be priorities. So, for me, the most important of the 10 pillars is developing skills. Encouraging free-thinkers and making sure that education prepares our next engineers, business owners, and business leaders is the most important task,” Christopher Greenough, commercial director, Salop Design and Engineering Ltd.