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‘Every £1 invested in UK automation could deliver £49 return’

30 November, 2015

Investing an extra £1.2bn in automation and robotics could add more than £60bn to the UK economy over the coming decade – a £49 return on every £1 invested – according to a new report from Barclays bank. Such an investment, it adds, would expand the UK manufacturing sector to reach a value of £191bn by 2025 – a £38bn increase on the current value – as well as safeguarding 105,800 jobs across the economy.

The report, called Future-proofing UK manufacturing, argues that investing in automation and robotics technologies will help to increase the global competitiveness of the UK’s manufacturing sector through increased productivity and efficiency. As a result of the additional investment, the manufacturing sector will, by 2025, be worth £8.6bn more than currently projected, and 19.6% more than it is worth today.

Barclays predicts that a £1.2bn increase in automation investment would create a larger, more productive and competitive UK manufacturing sector by 2025, safeguarding 73,500 jobs in industry. A further 32,300 jobs will be supported elsewhere in the economy by generating extra business in the supply chain, from raw materials to logistics, combined with the effect of the workers spending more. Barclays estimates that, in 2025 alone, this will represent an additional stimulus worth £3.9bn.

“This report highlights the importance of investing in robotics and automation for manufacturers as a potential solution to the on-going ‘productivity puzzle’,” says Mike Rigby, Barclays’ head of manufacturing. But he warns that “to reap these rewards, we need to address some of the barriers to investment including the need for more user-friendly and flexible technology, addressing skills barriers within the sector, and supporting manufacturers to access the funding and information already available to them for robotics investment.” 

Barclays’ research – based on a sample of 639 middle managers and above working in the UK manufacturing sector – reveals that more than half (58%) of British manufacturers have already invested in automation and, of these, two-thirds (65%) feel that they are more productive as a result. But, while 71% of manufacturers with annual turnovers above £10m have invested in automation, the figure drops to 21% for companies with turnovers of less than £1m.

Rigby: barriers need to be addressed

The report makes some comparisons with manufacturers in Germany, where it surveyed 100 middle managers. It shows that British manufacturers are almost as likely to report investing in automation as their German counterparts (58% and 66%, respectively). But while 23% of German manufacturers say that they do not need any external support to invest in automation, just 8% of the UK manufacturers share this view. Some 37% of the UK companies are looking for grants or other financial support from government, 36% would like increased support and advice from suppliers of automation equipment, and 26% want banks to make finance more readily available for such investments.

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