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‘Manufacturing must continue to play a key role in UK economy’

04 November, 2013

If manufacturing does not continue to play a powerful role in the UK economy, the country risks being left behind its international competitors, a new Government report has warned.

The report – The Future of Manufacturing: A new era of opportunity and challenge for the UK, published by the Foresight department in the Office for Science – says that manufacturing is entering a dynamic new phase, driven by rapid changes in technology, new ways of doing business, and potential volatility around the price and availability of resources.

The report predict reports that by 2050, manufacturing will change dramatically, becoming:

•  faster, more responsive and closer to customers: advances in technologies such as sensors and 3D printing will “digitise” manufacturing, and production will take place closer to the customer, with potential for local and even mobile manufacturing;

•  more than just making and selling products: new sources of revenue, such as services, will become important;

•  more sustainable: manufacturers will need to become more efficient in their use of materials and energy to counter potential volatility in the price and availability of resources; and

•  more highly skilled: around 800,000 manufacturing roles will need to be to filled before 2020 as people retire or move out of the sector, and the jobs will be increasingly highly skilled and well paid.

The report urges government to build on existing initiatives – for example, by increasing funding for the High Value Manufacturing Catapult Centre, to make it even more accessible to small businesses and to enhance its role in connecting academic expertise to industry.

The report also highlights three new areas for UK government action, which would build on its industrial strategy. These are:

•  better intelligence: government policy needs to be informed by data that reflects accurately how manufacturing is connected across the economy and how it is changing;

•  better targeting of support: the government could take its industrial strategy to the next level by tailoring policies to specific requirements of industries to support the emergence of new ways of doing business; and

Foresight report
The Foresight report says that manufacturing is vital to Britain's future

•  better capability: the government needs to keep up with the pace of change in manufacturing. The report suggests that a US-style Office for Manufacturing could help the UK government to draw together intelligence on the sector to inform policy, evaluate the impact of programmes, and improve coordination across Whitehall.

“Britain has a proud manufacturing tradition and the government wants to ensure the sector stays ahead of the curve, leading global innovation and developing, once again, a worldwide appetite for British-made goods,” says business secretary, Vince Cable. “The manufacturing sector is crucial to building a stronger economy – supporting 2.5 million jobs, over half of our exports and about three-quarters of research and development. I don’t share the fatalistic view that it will inevitably decline; rather the reverse.

“Through our industrial strategy we are giving businesses and investors the long-term security and confidence they need to invest in the UK and drive growth,” he adds. “Foresight’s strategic analysis is a valuable addition to the information available to government and the industry as we plan for the future.”

The Government’s chief scientific adviser, Sir Mark Walport, points out that “the global landscape is changing rapidly, with the rise of new powerful economies like China and India, and the revolution in technology. Manufacturing is no longer about just making and selling. It’s about designing, making and serving, with production sitting in the middle and each stage of the process contributing value to the economy.

“To be competitive in the new world,” he continues, “the UK needs to take full account of this and look at manufacturing in an integrated way. This includes recognising the different stages in value creation, keeping up-to-date with the changing nature of manufacturing and the associated skills needs, and providing a constant policy framework that supports long-term decision-making.”

Manufacturing currently accounts for more than 10% of the UK’s gross value (£139bn in 2012) and employs around 2.5 million people. It represents 53% of the UK’s exports and 72% of business research and development. 




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