It's official – making things is critical to the UK economy. The latest two year review on the future of manufacturing by the Government Office for Science points to the role the sector can and must play in the UK's long term growth and economic resilience.
Today UK manufacturing is diverse, innovative, productive, export focused and highly skilled. The factory of 2050, however, may be unrecognisable.
The review is a product of a world of evidence from industry and academia; pulling together global trends and technological changes that will drive an evolution of manufacturing from the one we see today.
Four key future characteristics of manufacturing are identified:
- Technology could radically change production meaning companies will need to be faster, more responsive and closer to their customers.
- Continuous change in market opportunities will pose new questions on where demand opportunities lie and where and how to meet those demands.
- There will be profound changes to production driven by environmental sustainability, from the risks to supply chains to volatility in the supply of key materials.
- The skills needs of industry are moving in only one direction and manufacturers will rely more on highly skilled employees, but this will be in the context of an ageing workforce.
But this report isn't just about painting a picture of what the future might look like, its about what all this means for policy makers and companies. Here's our five take-aways:
- Manufacturing is for the long term, not just until the recovery gets goingManufacturing can play a big role in rebalancing the economy towards more export and investment led growth, the report also notes that economies with large export focused manufacturing sectors are more resilient and recover faster from downturns.
- Manufacturing is more than making thingsManufacturers are also service providers and over time companies will continue to find new sources of revenue and ways to capture value - such as bundling services with products; selling technical know-how; remanufacturing; and more rapid exploitation of technology.
- The right policy environment needs all of government working togetherThose developing policies to support manufacturing must not only recongise the breadth of manufacturing activity, but act together to create the right conditions for the whole spectum of manufacturing value chains.
- Sectors are good, systems are betterPolicy must look at how it supports not just sectors, but emerging technologies and capabilities. These sectors and companies of the future will drive disruptive growth and must not be overlooked in policy decisions.
- Good institutions should have a long shelf life and be well resourcedThere are some really positive actions already taking place in the UK, such as the High-Value Manufacturing Catapult Centre. Stability, ease of access by SMEs and the right level of funding are critical to our manufacturing ambitions.
Across UK manufacturing today there are great companies and immensely talented people, but the challenges and opportunities we face means everyone will need to hit the accelerator to keep up with the competition. Government can provide the right framework, but it's companies that do the growing. So here are five actions for manufacturers:
- Be active in developing the skilled workforce of the futureBy 2020 we'll need another 80,000 additional skilled people in manufacturing positions. The education system has a big role to play, but employers must get involved to promote the benefits of a career in manufacturing and to shape the continuing development of the workforce.
- Be ambitious in new marketsNew opportunities are opening up all the time, this report identifies just a few of the potential opportunities for UK manufacturers. Companies can strive to be world class and compete with the rest of the world.
- Keep ahead of technological developmentWe must not be contect with being early adopters of developing technogies that the rest of the world can capitalise on. Manufacturers need to be continously reviewing how they can invest for now and the future.
- Know where the risks as well as the opportunities areIt's not just about the opportunities, it's also the bumps in the road ahead - particuarly in ensuring supply chain resilience and managing environmental change and sustainability.
- Get involvedThis project is a process and the report published today isn't the end of the road. Manufacturers will need to work with policy makers to get the right framework for industry to thrive and grow.
"The Foresight report has done an excellent job of identifying what manufacturing brings to our economy and what it can contribute in the future. There are some clear messages for government on how it can ensure that UK manufacturing is well placed to take advantage of these opportunities, particularly in supporting the development of new technologies. It is also important that manufacturers use this report to look at how well prepared they are for the challenges facing them in the coming decades."
Terry Scuoler, EEF CEO