Are UK manufacturers ready for the 4th industrial revolution?

Posted on 23 Feb 2015 by Callum Bentley

New research out today shows that Britain is on the cusp of a global, technology-driven 4th industrial revolution, with eight in 10 manufacturers (80%) saying it will become a business reality by 2025.

However, the UK’s ability to be a frontrunner hangs in the balance. In a stark warning to the next Government six in ten manufacturers (58%) say that the UK is in danger of being left behind:

  • Nine in ten manufacturers (88%) say the UK should be taking a leading role in the 4th industrial revolution – 66% say that UK manufacturing’s ability to compete globally will depend on keeping up with advances in technology
  • Little over one in ten (14%), however, say the UK is readily equipped for a leading role – the main challenges are the levels of investment required (70%), impact on skills (59%) and keeping on top of technological advances (58%)
  • Everything to play for: half of manufacturers (50%) believe that the rapid advance in technology will enable more reshoring of production back to the UK – 63% say there will be increased demand for highly skilled workers
  • Over three quarters of manufacturers (78%) say that Government, industry and academia must work together to secure the UK’s role in the 4th industrial revolution.

Britain’s manufacturers are bracing themselves for the imminent impact of a 4th industrial revolution, but raise grave concerns over the UK’s ability to play a leading role, according to new research out today from EEF, the manufacturers’ organisation.

The revolution – dubbed Industry 4.0 and driven by rapid advances in technology – will become a widespread reality of manufacturing life within the next decade, with eight in ten manufacturers (80%) expecting their business to be affected by 2025.

Nine in ten (88%) say the UK should be taking a leading role, seeing clear benefits to the sector and the rebalancing of the wider UK economy. But six in ten (58%) warn that the UK risks being left behind, potentially knocking back Britain’s burgeoning industrial renaissance and prompting calls for the next Government to ensure the right industrial strategy and support framework is in place.

The research supports a key theme of this year’s National Manufacturing Conference and is published alongside a specially-commissioned report – Manufacturing, Britain’s Future – sponsored by leading technology companies Infor and IBM.

The report sets out how the 4th industrial revolution is at hand, and how, in the global battle for dominance, innovative firms can take the lead and help position Britain as the manufacturing and technology hub of Europe.

Seven in 10 manufacturers (66%) say that UK manufacturing’s ability to compete globally will depend on keeping up with advances in technology. However, little over one in ten (14%) think that the UK is readily equipped to be a leading player.

EEF will be revealing its manifesto – Securing a manufacturing renaissance: priorities for Government – at the National Manufacturing Conference on Thursday 26 February.

With Industry 4.0 set to become reality within one investment replacement cycle, seven in ten (70%) see the levels of investment required as the key challenge. Other concerns are the impact on the supply and demand of skills (59%) and keeping on top of technological advances (58%).

Despite these obstacles, there is everything to play for. Almost seven in ten (69%) say the rapid advance in technology will play to Britain’s strength as a high value manufacturer, pointing to benefits such as the ability to produce more bespoke products (56%) and for more rapid and cheaper prototyping (52%).

It will also increase the importance and value of manufacturing within the UK (55%) and result in increased demand for highly skilled workers (63%).

The trend for reshoring is also set for a boost, with half of manufacturers (50%) saying that Industry 4.0 will enable more production to bebrought back to the UK.

As a result, over three quarters of manufacturers (78%) want to see Government, industry and academia working together to secure the UK’s role in the 4th industrial revolution – 85% agree that Britain needs a long-term industrial strategy spanning consecutive governments if it is to capitalise on the opportunities.

Terry Scuoler, CEO of EEF, said: “The 4th industrial revolution will change the global face of manufacturing beyond recognition. The UK must take a leading role if we are to realise our ambitions for a healthy, balanced and growing economy.

“The next decade will bring great and rapid change and the early-adopting nations will maximise the opportunities presented by new technologies and thrive as a result. There will inevitably be winners and losers, which is why we should take note when manufacturers say there is a real danger of the UK being left behind.

“Our sector’s ability to remain on top of the 4th industrial wave hinges on the decisions made now and over the next decade by consecutive governments. We must continue to establish the foundations to support our manufacturing renaissance, particularly alleviating the pressure that Industry 4.0 will place on investment and skills.

It is vital that the Government steps up to this challenge and works hand-in-hand with manufacturers and academia to ensure that the UK is not left behind.”

Pam Murphy, chief operating officer at Infor, commented: “Industry 4.0 is about connecting an increasingly rich and diverse set of information and using it to unlock new insights.

“Through embracing the technological change required to achieve these insights, UK manufacturing is well placed to enhance its reputation for productivity and service-led innovation, cement its platform on the global stage, and take a leading role in this new revolution.”