UK poised to be a world leader in innovation, but only if it solves productivity gap

Posted on 2 Dec 2020 by Tom Lane

Investment in digital manufacturing can turn the UK, and the Midlands in particular, into a science superpower.

Digital industrialisation could be worth as much as £455 billion to Britain’s economy over the next decade. This is according to a new report by the Midlands Manufacturing Resilience Commission (M2R), Manufacturing Confidence, which shows Britain will become a world leader in innovation if it embraces digital manufacturing.

The research finds digital industrialisation could be worth as much as £455 billion to Britain’s manufacturers over the next decade. In addition, the UK manufacturing sector could grow up to 3 per cent a year and create 175,000 new jobs if the country’s industry embraces emerging technologies. However the country is failing to capitalise on this opportunity.

As manufacturing becomes increasingly automated, the UK trails behind other European nations in deploying the technology needed to increase the nation’s productivity and compete in the global marketplace. For instance, it takes a UK worker 40 hours to produce the same output a German counterpart would produce in three-quarters of that time, partly because there are four times more robots in a German production line.

Birmingham has maintained its position as one of the top ten in the country for employment growth - image courtesy of Depositphotos.
image courtesy of Depositphotos.

Due to its ideal geographic location and its industrial experience, the Midlands has the potential to become the UK’s manufacturing ‘engine’. In recent years, the region’s tech ecosystem has been growing. In Birmingham alone, more than 20% of total employment comes from tech jobs. In order to build on this and secure prosperity for the region, more public sector support is required.

The report introduces a roadmap of concrete steps the Government can take to build manufacturing resilience in the Midlands and the UK as a whole. These include:

  • Match private sector investment in the Midlands at the same levels it does for the rest of the UK
  • Address the fragmented support for manufacturing across the Midlands
  • Provide financial protection for SMEs to take on bigger challenges to move from start-up to scale-up through an improved growth capital programme: a Midlands Equity Fund
  • Establish a Gigafactory in the Midlands, drawing from our local supply chain as part of the levelling up agenda
  • Create SME clusters in the region, creating supply chains for emerging markets and help SMEs pivot away from markets in decline
  • Create an internship programme for graduates into SMEs to provide:
    • Bandwidth for SME leadership to be strategic as well as operational
    • Vital industrial experience for graduates at a time when employment opportunities are scarce

The Chair of the Midlands Manufacturing Commission, Dr Clive Hickman said: “The Midlands can become the UK’s industrial engine but only if we get proper investment in the manufacturing sector. By embracing emerging technologies and equipping people with the right skills, we can improve our productivity and provide prosperity for the Midlands and UK as a whole.”