2025 was a difficult year for UK manufacturing. Economic pressures, US tariffs, global uncertainty and supply chain disruption hit every sector large and small. Yet, as Make UK’s Impact Report 2025 shows, manufacturers didn’t fold. They adapted. They invested. They led. And at the heart of that resilience were SME manufacturers, the businesses often described as the backbone of the British economy. Their people and their agility, tenacity and willingness to innovate are the reason UK manufacturing continues to move forward, not backwards.
SMEs: The quiet majority driving a major industry
The UK remains the world’s 11th‑largest manufacturing economy, responsible for 42% of all goods exports and 2.6 million jobs. Of the 250,000 active manufacturing businesses in the UK, 99% are micro or SMEs. Their contribution isn’t just economic, it’s deeply local. They sustain towns, support families and supply chains in every region of the UK.
As a business we’ve continued to invest in new facilities, equipment and capabilities. And we’re not alone. Across the sector, SMEs are upgrading, expanding, and adopting cleaner, more efficient technologies.
Philippa Glover, Managing Director, Rakem Group
As someone leading a chemical distribution and contract toll manufacturing SME in Bury, Greater Manchester, it’s no surprise to Philippa Glover, Managing Director of Rakem Group, that the North West consistently tops the charts for manufacturing output. Nor is it surprising that the chemical industry is one of the UK’s biggest investors in R&D, but unfortunately is woefully lacking support from the government and this is something that needs to fundamentally change. SMEs like Rakem Group have survived and thrived because our people and the willingness to pivot, invest and evolve.
Resilience built through adaptation
The last few years have tested SMEs like never before. Global shocks, supply shortages, volatile markets and shifting customer expectations have all taken their toll. But SMEs have something larger companies often lack, the ability to move fast.
SMEs can:
- Pivot production quickly.
- Adopt new technologies without years of bureaucracy
- Enter niche or emerging markets at speed
- Innovate in response to real‑world customer problems
This agility has helped stabilise the wider manufacturing ecosystem. Many SMEs operate in high‑value sectors of automotive, defence, clean energy, and advanced materials, where precision, compliance and innovation are non‑negotiable. Their ability to keep delivering, despite the turbulence, has helped maintain the UK’s reputation for world‑class manufacturing.
Investment: the lifeblood of SME innovation
One of the most overlooked stories of the last few years is that manufacturers have continued to invest even when it would have been easier to retreat. In 2024, manufacturing accounted for around 49% of all business R&D expenditure. Chemicals and pharmaceuticals alone invest roughly £10bn annually.
Rakem’s investment isn’t just helping businesses scale; it’s driving innovation and has the potential to drive innovation and decarbonisation across entire supply chains. SMEs often take on the work that larger companies don’t want to do, and their products underpin everyday life from the paint on our walls and home cleaning products to the adhesives in construction and the lines on a football pitch.
There’s frequent talk about building new R&D centres, but the truth is many SMEs already have pretty cool facilities and they’re using them every day to solve real problems. Through collaboration and partnership, SMEs support each other as well as major household brands.
People: The greatest investment of all
Skills remain one of the biggest challenges in manufacturing, but SMEs are also one of the biggest contributors to solving it. They invest heavily in apprenticeships, training, and career progression. They retain engineering expertise and they create high‑quality jobs paying wages around eight per cent higher than the UK average.
Many of these businesses sit at the heart of communities in regions like the North East, Wales and the North West — areas that rely on manufacturing not just for economic output but for identity, opportunity and community.
At Rakem, people is one of the ‘4Ps’ which the company’s business strategy is built on alongside planet, partnerships, and profit. Strong relationships with clients and suppliers are essential, but none of that works without a skilled, empowered and motivated people. Much of Rakem’s growth over the years has come from its people and long‑standing partnerships built on trust, problem‑solving and shared ambition.
The hidden power of SMEs
Manufacturing SMEs are the unsung heroes of UK industry. They are the driving force behind many of the major brands they supply, yet they often remain invisible in the supply chain. Their knowledge, skills and resilience keep production lines moving, keep innovation alive and keep communities thriving.
SMEs across the UK are manufacturing’s best‑kept secret, quietly powering the economy, adapting to change, supporting people and places, and driving innovation from the ground up.
It’s not just giants like BAE Systems or Rolls‑Royce that will keep UK manufacturing moving. It’s the thousands of SMEs working behind the scenes every day. If we want a strong manufacturing future, we must ensure these businesses get the recognition, support, and investment they deserve.
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