Today is our first of many weekly sector blogs. For the next couple of weeks we will be blogging about a different manufacturing sector each Friday.This week the focus is on Electronics
. The electronics sector includes the manufacture of computer and office equipment, telecommunications equipment, electronic components, electronic measuring devices and consumer electronics.About the SectorSome facts
- In 2012 the Electronics sector contributed around £8.2 billion of output to the UK economy.
- Electronics makes up almost 6% of UK manufacturing.
- The sector employs around 138 thousand people, who work in over 6000 thousand electronics firms.
- Manufacturing companies in the UK electronics sector range from small contract manufacturers to full scale semiconductor production.
The UK is known as a niche manufacturing location and over the years has developed a competitive advantage in the production of precision and high value electronic instruments.While only small on a global scale – UK produces approximately 1.2% of global electronic production – the UK electronics sector has a number of strengths. An important strength is the UK's well-developed university and research base. This has, over time, led to the development a strong design community and turned the UK into a global hub for electronics and IT hardware component innovation and the UK is now home to around 40% of Europe's electronics design industry.The UK electronics manufacturing sector is also backed by a robust IPR framework and legal system which provides confidence that innovation and intellectual property can be protected.Opportunities and challengesLooking ahead to the future, there are many opportunities for the UK to use its strength in meeting some of the demand trends of the future. The UK needs to keep an eye on some of the trends coming from a growing middle class in emerging markets including demand for mobile technology, smart infrastructure and medical/assisted living equipment. And we can also expect to see some big opportunities in energy saving technology and equipment as technology gets smaller and energy prices keep rising.But there are big challenges facing the sector as well, including skills, which are a challenge for many manufacturing firms, not just electronics. Increasing competition from emerging and BRIC economies will likely continue to be a challenge as high salaries and rising costs of energy risk reducing the competitiveness of the UK in the future. The UK will also need to manage the challenges of distance from markets as demand for faster product innovation puts pressure on shorter time to market for electronic goods.