Can technology investments potentially restore the UK's dominant status in global manufacturing?
The UK's manufacturing sector is facing challenges, with slow growth primarily due to negative business sentiment caused by factors such as a high tax burden, weak domestic and export sales growth, regulatory challenges, and sluggish capital expenditure. However, there is optimism for future improvement, and the government is urging a shift in focus from ad campaigns to investment in innovation and skills to increase exportation, enhance manufacturing growth, and improve productivity.
The current economic climate necessitates flexible planning and budgeting on an annual basis. Technological innovation, including improving internal production processes, increasing automation, and implementing modern software such as ERP solutions, can help firms achieve growth. For instance, the chemical manufacturing sector, which has shown a 31% sales growth in Q1 2015, has been able to adopt automation and process improvements more quickly, leading to higher productivity and efficiency.
Technological innovation and investment can boost productivity in UK manufacturing. Adopting automation technologies, such as robotics, AI, digital twins, and industrial IoT, can reduce labor costs, energy consumption, and operational disruptions. Embracing digital transformation can enhance process optimization, predictive maintenance, and real-time monitoring, thereby improving productivity and competitiveness. Increasing R&D investment, although currently subdued, is expected to outpace national averages and support innovation-driven growth.
The government is encouraging manufacturers to become reinvigorated to invest in innovation, training, and industry-specific tools. Modern ERP platforms can help organizations analyse business conditions, develop improved business plans, monitor progress, and provide visibility into day-to-day operations. The government is also considering helping companies partner internationally in technology innovation.
The UK launched its 'Exporting is GREAT' campaign, aiming to get 100,000 British companies exporting by 2020. The government is pledging to help the chemical manufacturing sector do more business internationally. By harnessing UK employees' technical abilities and evolving strong research and development capabilities, UK manufacturers can use innovation to achieve a unique competitive position.
However, challenges remain. High inflation, energy costs, Brexit-related issues, and uneven adoption of digital technologies are causing a regional digital divide. The government is responding by facilitating technology adoption and upskilling the workforce through initiatives like UK’s "Made Smarter". Fostering investment in startups and emerging technologies specialising in AI-driven manufacturing, IoT automation, 3D printing, and digital twins, which promise long-term efficiency gains and new capabilities, is also a priority.
If effectively implemented, these strategies can help stabilize the sector, close regional productivity gaps, and drive sustainable growth even amid economic uncertainties and structural challenges. The message is clear: the UK has real strengths in technical skills and innovation, and these should be leveraged to position the UK as a global manufacturing powerhouse.
[1] Source: CBI Industrial Trends Survey, Q4 2015 [2] Source: The Manufacturer, "The future of UK manufacturing: automation and innovation", November 2015 [3] Source: The Financial Times, "UK manufacturing: the challenges and opportunities", January 2016 [4] Source: TechUK, "The Digital Economy Council: Digital Manufacturing", February 2016 [5] Source: Epicor Software, press release, "Epicor Software Urges UK Manufacturers to Embrace Digital Transformation", March 2016
- To overcome the sluggish growth in the UK's manufacturing sector, technology can play a crucial role, particularly through adopting automation, modern software such as ERP solutions, and investments in research and development for AI-driven manufacturing, IoT automation, 3D printing, and digital twins.
- The government's initiatives, including fostering investment in startups and digital technologies, facilitating technology adoption, and upskilling the workforce, aim to reduce regional productivity gaps, drive sustainable growth amid economic uncertainties, and position the UK as a global manufacturing powerhouse by leveraging its technical skills and innovation.
