NOTE: As part of a three-part series, Stephen Radley, EEF's Director of Policy and External Affairs, is assessing the future for UK manufacturing. The first installment looked at how UK manufacturers weathered the recession, this second piece looks at the prospects for growth and the third - which will coincide with the launch of EEF's Manifesto for Manufacturing - will set out what the next government can do to rebalance the economy.
In my initial piece, I set out how UK manufacturing changed itself to remain successful - and survived the recession - despite facing competition from low-cost economies, a strong pound and rising costs.
Having weathered the worst of the last ten years, UK manufacturing is already preparing for the challenges and opportunities of this decade. At the end of the coming decade, manufacturers in the UK will need to have changed yet again.
In our vision for UK manufacturers, they will be large and global or small and capable and ambitious enough to grow into the multinationals of tomorrow. Their close relationships with customers and suppliers, investors and innovators will allow them to respond flexibly and quickly to market demands. And their innovative outlook will give them a sustainable competitive advantage and make them an attractive career option for engineers and entrepreneurs alike. In sum, they will need to become more diverse, agile and innovative.
The opportunities for generating growth will depend upon our openness to global markets, our focus on knowledge plus high value products and services, and our exploitation of fast growing markets. But given the challanges facing the sector, it will undoubtedly evolve in fits and starts, matching the disruptive tendencies inherent in global, open and flexible markets. Only a stronger, globally-focused manufacturing sector will help generate the wealth needed to correct our economic imbalances and contribute to broader national prosperity.
Indeed, the challenges facing our society - dramatic demographic shifts, strategic security challenges and serious environmental concerns - are also the potential markets for manufacturers. At the same time, we can’t be complacent that we can sit back and let these markets come to us. Manufacturers will need to be alert, agile and ambitious.
UK manufacturing is extremely well placed to take advantage of the markets created by the major challenges facing the world.
In the low carbon economy, we have significant strengths in areas such as low carbon vehicles, engine technology, nuclear power and renewable energy such as offshore wind and marine. But in other areas such as global security, we have significant strengths in aerospace and defence and electronics, as we do in healthcare technology and pharmaceuticals to meet the challenges presented by an ageing population.
The UK needs an economy that is diverse enough to prevent the future build up of economic imbalances, robust enough to face its long term challenges and dynamic enough to turn those challenges into opportunities.
In short, we need an economy that draws more heavily on productive, high value sectors with greater export potential.
While it may seem a daunting challenge, manufacturers are well placed to put themselves at the heart of healthy economy.