The competitiveness issue no one in the UK is talking about

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The Germans say it is an integral part of their economic strategy. The US says it’s about competitiveness. The Europeans say no manufacturer can stay competitive without it.

The it? Access to a sustainable and secure supply of raw materials.

How we obtain, use and reuse the materials that flow and circulate within the economy matters to manufacturing. Materials are the lifeblood of the sector, accounting for approximately 40% of manufacturers’ costs.

Highly volatile costs and growing supply risks have heightened concern within the import-dependent UK manufacturing community in recent years. Changing material demands driven by technological development and deployment, the rise of the consuming middle classes, environmental factors and geopolitical risks are among the factors underlining this concern.

It has been several years now since the Government published its Resource Security Action Plan, a collaborative plan developed by BIS and Defra. We wanted to look afresh at progress and look at how other countries were responding.

The results are published today in our latest report, Materials for Manufacturing: Safeguarding resources.

Our analysis was clear:  manufacturing nations have developed sophisticated strategies to shield their economies from current and future material supply risks that put ours in the shade.

What shocked us was the political support, the financial backing and the level of ambition that other countries placed on this agenda. Countries like Japan, Germany, the US, South Korea and China have strategies that band around three key pillars:  reducing supply risks; improving resource productivity and diversifying supply through secondary resources. All elements explicitly linked to a security of supply goal.

As the UK once again attempts to position itself as a country where manufacturing is supported and can thrive, the supply of feedstock to support those industries must feature more heavily as part of our industrial strategy. It is not enough to rely on the actions taken by the European Commission and a competent national strategy may be a means by which countries compete for inward investment in future.

What might that strategy look like?

Well at the heart of it we think there needs to be an Office of Resource Management, a dedicated policy unit comprised of experts within BIS to drive a coherent vision and policy response to resource security. It should, we believe, act as a central point of expertise for Whitehall.

Once established, it should lead on work to regularly review and assess supply risks and work with stakeholders to mitigate them.

We also desperately need to improve our data infrastructure. At the moment we really don’t have a good understanding of how resources flow through the economy or where the opportunities are at the end of life, particularly for commercial and industrial waste.

The ORM should also drive innovation. This was a key focus of activity by our competitors and we should also be taking a more strategic approach to innovation in this space. In the short term, we call on BIS to support developing proposals for a Network of Excellence in Remanufacturing.

We also think more can be done to incentivise resource efficiency by moving responsibility for the economic opportunities from waste to BIS, conducting a resource efficiency “Red Tape Challenge” and extend tax breaks to investments in resource-efficient technology. Responsibility for waste regulation should remain with Defra.

Finally we call for greater efforts to regulate waste to enhance its economic value.  A lot of this will depend on better data. But there are things that can be done now. Among our recommendations, we call on government to work with industry to consider collaborative options to improve reverse logistics. We argue for greater consistency in recycling services provided by local authorities so manufacturers have greater clarity when designing for recycling. We want to see more waste “swapping” between companies and we advocate a review of regulatory barriers hindering the reuse of waste.

Read our recommendations in the full report.

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