Almost all UK manufacturers regard digital transformation as ‘essential’
19 May 2026 
The vast majority (87%) of UK manufacturers now regard digital transformation as essential, with 48% identifying AI as the technology with the greatest operational impact. The figures come from Rockwell Automation’s 11th annual State of Smart Manufacturing Report, based on interviews with 1,500 manufacturing leaders in 16 countries – including around 200 from the UK.
The report says that the UK has moved beyond early-stage adoption of digital technologies into a phase where digital investment must translate into operational performance. The manufacturers report that they are allocating an average of 27% of their operating budgets to industrial technologies, with 49% having already invested in AI, and 38% planning further investment in this area. Cost remains the biggest barrier to wider adoption, cited by 27% of UK manufacturers, followed closely by data security concerns (26%).
More than a quarter (27%) say they have deployed digital twins, and a further 47% are planning to invest in the technology. These tools are enabling organisations to test scenarios, optimise processes and reduce operational risks before making changes on the factory floor.
“UK manufacturers are moving beyond experimentation into a phase where digital technologies must deliver consistent operational outcomes,” says Rockwell’s UK managing director, Phil Hadfield. “The challenge is no longer access to technology, but the ability to embed it into production environments in a way that improves performance, resilience and competitiveness.”
Cybersecurity has emerged as the leading AI application for UK manufacturers (cited by 48% of them), followed by quality control (42%), process optimisation and product design, reflecting a growing emphasis on protecting and stabilising increasingly complex production environments.
Half of UK manufacturers report experiencing at least one cyberattack in the past year, despite 62% saying they have invested in cybersecurity technologies. Cybersecurity is no longer a supporting function, but a central pillar of industrial strategy, according to the report.
Workforce dynamics are becoming a defining factor in how quickly digital transformation can be adopted in the UK. Rising labour costs are cited as the top workforce challenge by 40% of manufacturers, followed by change management on 36%. Rather than cutting jobs, manufacturers are focusing on reskilling and developing their workforces, with more than a third of employees now involved in training programmes designed to support digital roles. Approaching half (44%) of UK organisations report adopting technologies that create more engaging roles for their staff, while 43% are introducing more flexible working models.
This shift is closely linked to the growing importance of AI. A majority of manufacturers (76%) now see AI skills as being critical to attracting the next generation of talent, highlighting a structural change in how industrial workforces are being shaped.
The value of the digital technologies is being constrained by the availability of data, with UK manufacturers reporting that they use less than half (45%) of the operational data they collect, suggesting a gap between data generation and decision-making. Closing this gap is likely to be one of the most important factors in determining future competitiveness, according to Rockwell.
Operational data is most commonly used to support process optimisation (36%), product quality monitoring (35%) and AI models (33%).
Almost half (43%) of UK manufacturers report that they are already using elements of smart manufacturing technologies – this is higher than the European and global averages of 37%. A further 21% say they are already deploying these technologies at scale, while 15% are currently piloting them.
Adoption is expected to accelerate rapidly with 37% of manufacturers planning to deploy smart manufacturing technologies within the next six months, and 74% within the coming 11 months.
The report’s findings suggest that UK manufacturing is entering a new phase of digital transformation. The foundations have been laid, investment is established and adoption is widespread, it says. The next challenge is execution – turning digital capability into consistent, scalable performance in an increasingly complex industrial landscape.
