Manufacturing is a resilient, innovative, modern sector that drives the British economy. UK manufacturers consistently demonstrate their ingenuity and resilience, providing technological solutions to the biggest societal challenges we face.
However, a potent cocktail of economic issues have left many manufacturing companies in a perilous situation. As such, business confidence with investment and employment intentions are now falling, and rising costs are now becoming ‘business threatening’ for some. Make UK CEO, Stephen Phipson CBE, tells us more.
Historically, what’s been manufacturing’s contribution to the UK economy and where does it sit currently?
Manufacturing is worth £200bn to the UK economy, we employ 2.5 million people and the average salaries are around 30-35% above the average levels in the UK. Also, approximately 65% of all R&D investment in the country goes to the manufacturing sector.
We’re still in the top ten manufacturing countries in the world and most of what we do now is highly advanced, innovative manufacturing which we’ve got a great reputation for globally, so we should be very proud. And it’s something I constantly remind government about; making sure we protect and grow the sector is the mission of Make UK.
Do you think manufacturing (and it’s potential) is often overlooked by the mainstream?
It is a huge problem. We ran a public perception survey last year asking people what they thought of the sector, and it was amazing. Most people’s perception of manufacturing was of smoking, Victorian type factories that they wouldn’t want their sons and daughters to work in; we need to change that. One way of doing that is through local communities. We ran National Manufacturing Day this year, where companies could open their doors to show the public, and particularly parents, what this sector is really like and how interesting it is as a career.
It was a good start to try and address this issue and we’ll be running the day again in 2023, aiming for around 25,000 companies to get involved to help build that public understanding of what a great sector this is. We also do school engagement programmes within different areas of the country, bringing youngsters into our training centre and showing them what it’s like to work with machines, robots and all the interesting parts of modern manufacturing technology. Of course, the number one problem we’ve got to solve in our sector is the labour and skills shortage. And it’s by bringing those youngsters into the sector that we’re going to start to address that in the long-term.
Why has confidence and investment within the sector stalled?
We’ve had a couple of big hits. We’ve had the pandemic, and although many manufacturers stayed open and did great things, it caused huge disruption within supply chains and put costs up. We’ve also got the energy crisis, which is important in manufacturing terms, and we’re not quite sure where that’s going as we’ve only got six months support from government. Investment in manufacturing is on average, a seven year cycle.
So, at the moment, cash is being held on to and investment is not being made. And that’s a message we keep repeating to government; we need stability in order for confidence to return so people can invest in long-term projects. In terms of offering support, the banks are doing a great job. They’re deploying a lot of resource through their regional teams, with manufacturing experts helping and advising companies on how they might mitigate some of this lack of confidence. We do that at Make UK but the local banking relationships are quite important. I’m pleased that a lot of them have recognised just how vital the sector is. We’re seeing a renewed push from the banks in trying to support companies to invest going forward.
What is it that you’re doing to help UK manufacturing?
One of my roles is to speak to ministers to make sure government is fully aware of the challenges facing the sector. We’ve changed quite a lot of ministers recently so we’re almost having to start again with the whole story as to why manufacturing is the best place for the UK to focus on in terms of future growth.
I also make sure the government is fully up to speed and understands the wonderful opportunities that exist in the sector for great employment and wealth generation going forward. We represent about 22,000 companies across the UK and run 11 regional advisory boards, so I travel around the country and speak to our members, understanding face-to-face their issues and challenges. That’s important as I can take that straight back to government and ask the same questions. We have 32 universities in our membership as well, because what’s happening in academia, research and innovation is critical.
How important is building digital talent within the sector?
Technology is great and we talk about it a lot, but the biggest challenge we have is getting the right skills and the right labour force to be able to deliver this growth. Particularly now, when we’re looking at transforming traditional manufacturing processes. That means a proportion of the current workforce will need to be upskilled and reskilled, and that will need support from government. We have challenges at the moment with the further education system, but it’s really skills as a whole that we need to focus on.
In 2023, Smart Factory Expo will become part of Manufacturing & Engineering Week, held at the NEC in Birmingham on 7-8 June. Manufacturing & Engineering Week brings the entire community together for a festival of innovation featuring a dynamic, interactive series of digital and live events to inspire, inform and entertain.
Discover what the immersive, tech-driven event will hold in 2023 and how this will be a memorable experience for all those involved.
Visit www.mandeweek.co.uk to find out more.
For more articles on Leadership, click here