Richard Hill, NatWest’s Head of Manufacturing & Automotive, looks at how a lack of investment in technology could make a long-term impact on businesses in the UK’s manufacturing sector.
NatWest’s latest manufacturing report, Future Fit: the road ahead for UK manufacturing, suggests that some of the UK’s medium-sized manufacturers are hesitant to invest in technology – despite acknowledging the opportunities it can bring.
One clear message coming from the Future Fit research, released earlier this year, is that the future competitiveness of some manufacturers is threatened by a hesitancy to invest in new technologies and high-value, smart manufacturing.
While we have many excellent manufacturing businesses that are well positioned to take advantage of the UK’s strong foundation of academic and research excellence, the research highlighted that many report feeling overwhelmed by the speed of rapidly-evolving technology.
Karthik Sundaram of UK consulting firm Frost & Sullivan, warned, “UK manufacturers can no longer afford to be conservative in their future strategies. They need new technological thinking and collaborations – or they will be left behind.”
There’s no doubt that the manufacturing leaders surveyed accept this position. More than two thirds (68%) believe that technologists will be the most in-demand skill-set by 2050, yet there’s little evidence for exploring how to meet these needs.
This disconnect between the desire to innovate and the awareness of the tech trends, which are set to shape the industry, compounds into an increasingly complex investment decision-making environment, where manufacturers need more guidance.
Our research, which included a survey of nearly 300 manufacturers and in-depth interviews with a range of industry experts, suggests that this could be because manufacturers experience blind spots regarding the usefulness of some emerging technologies that industry experts identify as key.
For example, only 31% see access to nanotechnology and new materials – cited as major areas of global opportunity for UK manufacturers by industry experts – as a means of future-proofing.
But with costs falling, manufacturers need to be aware that smart production will allow them to establish a global lead in many areas, such as connected, driverless cars, and drone technologies, where the UK’s regulatory frameworks provide natural advantages.
Lee Hopley, chief economist at EEF, feels that UK manufacturers are often paralysed by a lack of advice and support on which new technology will work best for their business.
“The UK’s mid-sized manufacturers haven’t always found it easy to identify the right technological solution for them, and how they implement it, and how they get the most out of it, quickly and profitably,” she says.
“There’s a lot of work to be done to help these manufacturers, using experts to work through their supply chains to make sure that they’re aware which technologies are going to be most appropriate for them.”
We believe that there are many golden opportunities for these manufacturers in relation to new technologies, and it’s important that all stakeholders within the sector work together to help our mid-sized manufacturers make the most of these now and in the future.
For further insight into the future threats and opportunities facing medium-sized manufacturers, download the Future Fit report here.