UK manufacturers ‘losing out’ by not adopting AI
28 November 2024 
Britain’s manufacturers are at risk of missing out on innovation and productivity benefits by not investing in AI and other forms of automation and digital technologies, according to a new report published by Make UK and Autodesk.
The Future Factories powered by AI report examines the opportunities and challenges for UK manufacturers and suggests how Government initiatives and regulation could support the adoption of the new technologies.
It shows that although manufacturers are using AI tools widely across their business – in particular, to manage energy use and reduce waste – only 16% claim to be knowledgeable about AI’s potential uses. As a result, only 36% of companies are using it in their manufacturing operations, with Make UK warning of significant implications for the UK’s efforts to raise productivity.
The 25-page report also reveals that large companies are more than twice as likely as SMEs to be adopting AI (71% and 28% respectively). Barriers cited include a lack of knowledge of how to apply AI, and limited access to technical and digital skills. Lower adoption rates among SMEs are preventing them from achieving the increased profits reported by almost a quarter of companies, and an ability to take on further work reported by almost a third.
UK manufacturers are using AI for applications ranging from predictive maintenance to supply chain optimisation. The biggest benefits they cite are increased efficiency (69%), improved productivity (61%) and the automation of routine tasks (46%).
The report also shows that a quarter of companies are using AI as part of their efforts to decarbonise, with 93% using it to optimise energy consumption, 64% to reduce waste and emissions, and 57% to improve resource efficiency. Three quarters of companies say they are planning to increase their AI investments in the coming year.
While the adoption of AI across businesses is increasing, the report also says the use of digital tools, such as robotics, remains “disappointingly low”. Only 16% of companies use them, with 38% considering using them, and 29% not planning to use them at all. The UK is 24th in the global league of robot users, with 111 robots per 10,000 employees. Just 0.5% of the robots used globally in manufacturing are in the UK, compared to 1.2% in France and 1.6% in Italy – both of which have similar-sized industrial bases.
Benefits reported by UK manufacturers after adopting AI (percentage of users) Source: Make UK/Autodesk Future Factories Survey 2024“AI and automation are driving dramatic change in speeding up manufacturing processes and elsewhere in companies,” says Nina Gryf, digitalisation lead at Make UK. “Their potential to drive economic growth and reshape industries is becoming increasingly clear, and the manufacturing sector and its factories of the future have a central role to play. However, while the uptake of such technologies is increasing, the UK needs a step change in the use of automation, otherwise it risks missing out on vital transformative productivity gains.”
“Taking advantage of new technologies isn’t a one-off investment and the silver bullet for change,” adds Srinath Jonnalagadda, VP of industry strategy for design and manufacturing at Autodesk. “It demands a shift in mindset and an iterative approach over time, especially in the journey towards future, digital factories. A continued and concerted effort will be needed to achieve the industry transformation and workforce with the skills and capacity required to take advantage of new technology, allowing UK industry to emerge as a global leader in AI-driven innovation, setting the new standard for manufacturing excellence.”
According to Make UK, there have been welcome initiatives from Government including the national rollout of the Made Smarter programme and a doubling of the funding for the Alan Turing Institute. However, given the barriers that remain for SMEs in particular, there need to be greater efforts by industry to overcome awareness and cultural challenges by sharing peer-to-peer learning and best practice, Make UK suggests.
In addition, Government should take additional measures including extending the R&D tax relief to cover investment in capital equipment.
The survey of 151 companies was carried out in September 2024.
