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73% of UK manufacturers are planning new products

19 August, 2013

British manufacturers are increasing their innovation in new products, technology and research, and plan to use this to expand their activities in emerging markets over the coming three years, according to a new survey from EEF, the manufacturers’ organisation and NatWest Bank.

The EEF/NatWest Innovation Monitor survey found that 71% of UK manufacturers are planning to move into new markets on the strength of innovation in products and services – a jump from 54% three years ago.

“After a long and slow recovery, manufacturers are looking to drive growth through innovation, developing new products and services for new markets,” says Steve Radley, EEF’s director of policy. “However, the demands of selling into new markets have increased the ‘need for speed’ when it comes to innovation – something that remains a key challenge for manufacturers. Encouragingly, government schemes are well-targeted to help manufacturers, but in order to deliver the stability companies need, there must be a longer-term commitment to innovation funding.”

The survey found that:

•  73% of UK manufacturers plan to bring new products to market in the next three years;

•  75% of them say that speed to market is more important than in the past, but speed of innovation remains a top concern;

•  62% are collaborating with research institutions (an increase from 44% in 2010); and that

•  51% of them are collaborating on research with organisations outside the UK, with a third of companies with fewer than 100 employees being engaged in such collaboration.

Radley: manufacturers are driving growth through innovation

But the survey also highlights that the UK’s expenditure on r&d as a proportion of GDP remains low by international standards, at 1.1%. The UK is 0.4% below the OECD average and further behind the leading countries such as the US, Sweden and Korea.

The survey found that government support is generally well-targeted to meeting companies’ needs, but EEF is urging government to raise awareness and keep access simple. In particular, it should:

•  ensure stability by announcing a long-term commitment to the Technology Strategy Board, and maintaining the breadth of support mechanisms such as the r&d tax credit;

•  simplify and streamline application processes and consider an “innovation active” qualification to fast-track access to support; and

•  improve access to the new network of Catapult centres by streamlining membership models and, in the longer term, helping to ensure SME involvement.

“Manufacturing plays a vital role in the UK economy and is the backbone of real growth, so it is fantastic to see that confidence is growing across the sector,” says Mark Eastwood, NatWest’s head of manufacturing for business and commercial banking. “Investment in innovation and research is key to keeping on top of this global market and manufacturers need stability and certainty as they look to invest in new products and markets. I am hugely excited at the outlook for innovation over the coming years. What is evident is how much knowledge and capability not to mention success, already exists within the UK.”

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