Living on the edge: How manufacturers can stay competitive

UK manufacturing is often heralded for its innovation, commitment to excellence and pioneering output (to the tune of £183bn), with industry leaders like BAE Systems and Rolls-Royce often cited as prime examples of manufacturing excellence. Maintaining this esteemed position in an increasingly competitive global landscape is by no means an easy feat for the UK, and requires a rethink around innovation, investment and collaboration.

Embracing emerging technologies is critical to long-term manufacturing success. Great strides have been made in developing tech-enabled solutions to improve efficiency, but more must be done to help manufacturers adopt proven, successful technologies. This will ultimately determine how the UK maintains and sharpens its global competitive edge.

Slow adoption is sabotaging competitiveness

The UK is one of the top ten countries for manufacturing output globally, employing more than 2.5 million people, but slow adoption of emerging and Fourth Industrial Revolution technologies (4IR) could risk this position: as it stands the UK is number nine in the world. What’s more, failure to adopt innovation at scale has been highlighted as a significant threat to the UK’s global standing with 94% of UK manufacturers believing that the industry has fallen behind the US due to a lack of investment in digital technology.

Technology is often touted as the silver bullet to strengthening the UK’s manufacturing output and bolstering levels of productivity amid stagnant economic growth. In 2022, the UK manufacturing industry contributed around £206bn in gross value-added (GVA) output which, on the surface, looks impressive. However, in the last ten years the share of manufacturing GVA relative to output for the entire economy has remained stagnant at close to ten percent. This indicates that the manufacturing sector’s contribution to UK economic output has not improved in over a decade.

The consequences of slow technology adoption are thus far-reaching. UK manufacturers are falling behind in terms of cost-effectiveness, product quality and customisation capabilities. Their ability to integrate into global value chains and leverage emerging technologies is also limited, and this is leading to weakened international collaboration and strained commercial partnerships. It’s clear that slow technology adoption is detrimental to the competitiveness of the UK’s manufacturing sector, but it’s equally important to understand why.

Despite the UK being ranked third in the world in terms of technology investment overall, less than one percent goes into industrial digital technology, an indicator that the manufacturing industry is not an attractive area for innovators to grow their business.

The barriers preventing manufacturing from propelling forward

One might wonder why UK manufacturing growth has seemingly stalled in recent years. At Digital Catapult, we’re committed to driving industry growth and delivering for the economy, and we’re keen to assess what’s halting the adoption of new innovations in manufacturing, and how this can be mitigated. With the UK workforce ageing and pay growth slowing down, manufacturing businesses find themselves in a challenging position.

Many are struggling with limited resources and are solely focused on day-to-day operations to keep their doors open. For the most part, manufacturing companies are focused on short-term benefits over strategic growth, decreasing their levels of productivity and operational efficiency. One key issue at the macro level is the industry’s emphasis on short-term incremental innovation rather than long term scaling and successful adoption.

This approach often leads to solutions that are not readily leveraged or applied at the necessary pace to keep up with global trends and demand. It is crucial for the industry to prioritise scalable and adoptable solutions that can be effectively implemented to meet the needs of a rapidly evolving world. By shifting the focus towards long-term scalability and successful adoption, which we endeavour to achieve at Digital Catapult, the industry can ensure that innovative solutions are effectively deployed in a timely and impactful manner.

Sustainable innovation as the key to successful technology adoption

Reducing carbon emissions to meet the UK government’s net zero target by 2050 provides the ideal opportunity for manufacturing businesses to effectively adopt sustainable innovation; it holds the key to breaking the doom cycle, creating a brighter future for UK manufacturing and increasing competition in the global ecosystem. With more companies recognising the urgent need to address environmental challenges, many have made sustainability commitments.

Demonstrating the commitment to meet net zero targets can tap into a significant market opportunity, given that sustainable practices are increasingly sought after by industry and investors. However, sustainability cannot be achieved in isolation. It must be intertwined with digital transformation. Digital technologies serve as powerful enablers of sustainability strategies and practices, from optimising operations, reducing waste and enhancing resource management, to tools for efficient data collection, analysis and monitoring – all helping companies identify areas for improvement and make informed decisions.

This is why Digital Catapult has introduced the Made Smarter Innovation Sustainability Accelerator, a national programme to fast-forward the UK’s technology solutions using AI, distributed ledger technology and Internet of Things (IoT) directly into industry. The programme will accelerate adoption of digital solutions specifically designed to tackle sustainability challenges in the UK manufacturing sector, improving the competitiveness, efficiency and performance of the industry.

The transformative potential of emerging technologies

Leveraging emerging technologies will have a transformative impact beyond achieving key environmental objectives:

• Artificial intelligence and machine learning can allow manufacturing businesses to predict consumer demand accurately, optimising production schedules, inventory management and supply chain operations.
• IoT technology can help cut costs related to energy consumption by using advanced sensors to provide business leaders real-time data on energy usage across operations.

Given the surge in energy prices, emerging technologies can not only meet environmental objectives but can help businesses cut energy costs too. In fact, integrating data from sensors with predictive analytics algorithms can allow businesses to identify energy inefficiencies, detect patterns of excessive usage and optimise their energy consumption.

Embracing innovation and adopting emerging technologies is vital for the UK manufacturing sector to maintain its competitive edge on the global stage. By addressing barriers to technology adoption and focusing on collective responsibility, we can drive industry growth and deliver a more sustainable future. Through initiatives like the Made Smarter Innovation Sustainability Accelerator, transformation of the UK manufacturing space can be enacted, unlocking transformative potential, improving efficiency and ensuring a thriving manufacturing sector that drives global competitiveness.

 

---

For more articles on Digital Transformation, click here