As we’ve said before, the 4th Industrial Revolution (4IR) is happening and will be happening quickly.
Today the European Commission published a plan to support this transformation, or digitisation of European industry, as part of its Digital Single Market strategy.
In our view the plan lands in the right place.
Digitising matters for the future of UK industry
This digitisation matters. The benefits of 4IR will be maximised where supply chains are joined up digitally and given the dense supply chain networks across the EU – any action at this level to speed up integration is welcome.
European industry can’t afford to wait to play catch up on this agenda. Other countries are forging ahead and while the digitisation of industry will deliver benefits in the UK, including making it a lower cost location for manufacturing, these benefits will be available to any country.
First mover advantage matters. While not a total zero sum game, playing catch up will be more difficult and costly than keeping pace with our main competitors.
There are also risks to not keeping pace including parts of the UK manufacturing base which feed into international supply chains missing out on future orders as supply chains become more digitally integrated.
What’s in the plan?
The action plan rightly notes that the role of EU institutions should be to build on, complement and support the scaling up of national 4IR initiatives.
The areas identified for action that will be of particular interest to UK industry include ICT standardisation, the challenges and opportunities from the Internet of Things, digital skills and a European Cloud initiative to support scientists and engineers in boosting Europe’s capacity to collaborate on innovation.
The benefits of the industrial transformation of UK industry will be maximised where UK companies have access to a supply chain that is digitally enabled, using common standards – this is where action at the European level will add benefit.
That benefit helps to explain why 3 in 4 UK manufacturers want the UK government to push for the completion of this Digital Single Market across Europe.
But the UK government could go even further and set out a modern industrial strategy (as we summed up after the Budget) to ensure UK industry can quickly capitalise on this agenda, putting us in the frontline of European countries taking this seriously.
EEF is exploring what the future holds for UK manufacturing. Last week we launched a survey to seek to understand company ambitions, what investment will need to take place to make these ambitions a reality, how operations will be structured and what good supply chain collaboration might look like.
We want to see manufacturing leading the drive towards new technologies and playing a central role in future growth across the economy. We need the evidence from manufacturers to position manufacturing as a strategic industry for the future and make the case for the right policies from government to make it happen.
If you want to take part in this important research project and help EEF to explore the future for UK manufacturing please contact Amanda Norris, Survey Manager