Virgin Media Business, the arm of Virgin Media that provides products and services to UK businesses, has released a major research report from Oxford Economics that outlines the huge potential of digital technologies to boost manufacturing companies.
The report – The UK’s £92 billion Digital Opportunity – reveals that investment in digital technologies could provide am £8.7bn boost to manufacturing businesses, as well as creating more than 98,000 new jobs.
Looking at the next two years, manufacturers are optimistic about the potential of digital to continue to drive growth.
The report was compiled by Oxford Economics, following interviews with senior executives at over 1,000 UK-based companies who together represent 470,000 workers.
More than 120 companies from the manufacturing sector took part in the survey. When examining the impact of digital capabilities on their business, manufacturing firms said that they increased their revenues by 3.2% in the past year.
While digital is expected to result in some job losses (approximately 51,000 jobs from manufacturing companies), 38% of manufacturing businesses expect no jobs at all to become obsolete from the increasing use of digital.
Overall, expected job losses are far outweighed by the number of employees companies anticipate hiring as a direct result of digital investments, which aggregated across the sector are expected to total 98,000 new jobs.
When it comes to growth, if all manufacturing companies had access to the best digital capabilities available, the economy could be boosted by a further £8.7bn per year.
Digital Leaders show the way
The research also found that 19% of companies in the manufacturing sector are Digital Leaders – defined as those firms who are prioritising investment in a broad range of digital capabilities: technology infrastructure; digital workforce; digital information; digital strategy and leadership; open and collaborative partnerships, and digital customer engagements.
Digital Leaders as a whole are more profitable, faster-growing and more confident in their ability to compete than other businesses.
While on average Digital Leaders don’t spend any more money on technology than other firms, they spend it more wisely and achieve better results.
When asked how digital is providing benefits to the business, survey respondents from the manufacturing sector cited factors such as robotics; CAD and 3D design technology; digital printing, and improved collaboration throughout the business.
Managing Director of Virgin Media Business, Peter Kelly, said: “Digital technologies are transforming the face of business and the wider UK economy, and it’s clear that manufacturing companies see the huge potential that digital has for growth.
“However, the incredible pace of change means there is no place to hide, or room to stand still. Any business with ambitions to grow through digital needs to invest in the right technology and skills, while the Government and industry have to deliver the infrastructure and support to help them.
“Over the coming years we’re investing £3bn to bring the fastest broadband to more businesses of all sizes, to help them seize the chance to become digital leaders.”
CBI Director-General, John Cridland noted: “Both the public and private sectors have much to gain from harnessing the benefits of digital technology.
“The UK is the tech capital of Europe, but digital advances never stop. If we want to stay ahead we need more young people studying computing to a higher level.
“Looking into the future, the proposed EU digital single market, if delivered well, would be great news for both business and consumers, reducing barriers to e-commerce across the continent.”
Digital Economy Minister Ed Vaizey MP said: “The significant digital opportunity for businesses of all types and the economy as a whole is one that we can’t ignore.
“Government will continue working alongside companies like Virgin Media to transform the UK’s digital capabilities and laying the foundations for a thriving, digitally-led future.”
