UK manufacturers call for Industry 4.0 focus from Govt

The UK government’s strategy could do more to support regional manufacturing development in engaging with these technologies, new study shows.

Manufacturers - Prime Minister Theresa May will use her first regional Cabinet meeting to launch a modern Industrial Strategy.

Investment into UK research and development remains a priority for the manufacturing industry, with the emerging technologies of Industry 4.0 seen as key to the future development of the industry, according to a KPMG study.

The UK manufacturing industry continues to exhibit a relatively positive outlook, with a low pound boosting exports globally.

The study reveals, that the industry remains in a period of acute uncertainty, however, driven by sector specific and wider government policy factors relating to Brexit, alongside the disruption from automation and Industry 4.0 which are lurking on the horizon.

As it stands, British investment in manufacturing R&D lags behind other developed countries. The UK invests around 1.7% of its GDP into manufacturing innovation, well behind the OECD average of 2.4%.

The US and Germany, key competitors, stand at 2.79% and 2.88% of their GDP respectively, while Japan and China invest 3.49% and 2.1% respectively.

In a new report from KPMG explores key themes affecting UK manufacturing, from Industry 4.0, to Brexit, as well as wider government focused sector specific support – including recently launched new measures to boost R&D efforts in the sector.

Disruption on the horizon

 The report notes that British manufacturers are increasingly aware of the impact of disruptive technologies on their industry, from automation to 3D printing.

These technologies, which are often integrated into a wider ‘Industry 4.0’ transformation of the factory floor and supply chain integration, may result insignificantly improved efficiencies, while cutting long-term costs.

When UK manufacturers were asked about the impact of Industry 4.0 on their operations, there was broad agreement that they would ‘present an unprecedented opportunity to revitalise UK manufacturing’, to 22% strongly agreed and 34% somewhat agreed.

In terms of impact on business model, around 40% at least somewhat agreed to a major impact, while 44% said that they neither agreed nor disagreed to it having a major impact.

Around 45% of respondents said that they somewhat agree that their organisation has a coherent strategy when it comes to Industry 4.0, with a further 46% being neutral on whether they have a coherent strategy.

Finally, 43% of organisations note a lack of talent and skills necessary to capitalise on Industry 4.0’s potential, although 20% said that they have such skills on board.

Innovation

The noted importance of Industry 4.0, reflects manufacturers’ continued embrace of innovation. When asked if innovation is and will remain the bedrock of the UK sector, 29% of respondents strongly agreed, while 49% said that they somewhat agree – 1% of respondents said that they somewhat disagree.

Yet while businesses are keen to innovate, with Industry 4.0 by many as the next level of innovation, getting there appears to be difficult.

When it comes to expected changes in research and development (R&D) over the coming three years, 40% said that they expect activity to be stagnant, while 12% expect a decline.

Those that think activity will increase somewhat come in at 38%, while those that think it will increase a lot stand at 10%.