Forging the Future of UK Manufacturing: A Blueprint for Government Action

As the UK approaches the July General Election, the manufacturing sector is issuing a rallying cry to the incoming government: prioritise economic growth and innovation through a comprehensive strategy that places manufacturing at the forefront of national development.

Despite its pivotal role in the economy, design, production, and manufacturing seem to be marginalised in governmental agendas. Yet, for every ￡1 invested, the manufacturing industry supports an additional ￡1.80 in the broader economy. So what concrete steps can the incoming government take to further bolster this crucial sector?

The Essential Role of UK Manufacturing: Employing 2.6 million people, UK manufacturing remains a cornerstone of the nation's economy. Despite a declining share, it contributes significantly to the UK’s total exports, accounting for 49%. With a substantial leap in output to ￡224 billion, the UK has climbed from 9th to 8th place in the global manufacturing rankings, solidifying its position as a key player in the industry. Notably, the UK's manufacturing exports exceed ￡290 billion, with top destinations including the United States (￡56.7bn), the Netherlands (￡37.0bn), Germany (￡33.3bn), and The Republic of Ireland (￡30.3bn).

Navigating Present Challenges: UK manufacturing has weathered significant shifts, from post-war nationalisations to 1970s privatisations. Despite setbacks such as the post-1998 employment decline and a 13% output drop during the 2008 credit crunch, the sector exhibits remarkable resilience. Projections suggest Britain could rank among the top five industrial nations by 2025, propelled by advances in automation, AI, and smart factories. However, realising this potential requires addressing significant challenges and robust governmental support. So just what are these critical challenges that require government focus?

Skills Shortage and Workforce Development: Addressing the significant shortfall in STEM skills (43% of vacancies remain unfilled) through comprehensive workforce development programs is imperative for boosting productivity and facilitating technology adoption. A key theme that manufacturers keep telling me, is they are always struggling to find the right people with the right skills required, and recruitment times are taking much longer than before.

Navigating Post-Brexit Uncertainty: With nearly half of UK manufactured exports destined for the EU, ensuring frictionless trade post-Brexit is paramount to mitigate supply chain disruptions and maintain market access. Changes in legislation and tax regimes post-Brexit also pose challenges, necessitating robust strategies to navigate regulatory complexities and safeguard competitiveness. Right now, there seems to be an overbearing amount of unnecessary red tape, bureaucracy and lack of direction and support from UK Government. How are manufacturers to improve their global output without comprehensive guidance and framework from which to do it?

Closing the Productivity Gap: Despite technological strides, UK manufacturing productivity lags behind other G7 countries, necessitating targeted interventions to enhance efficiency and competitiveness.

Tackling Rising Costs: Escalating wage bills, driven by the National Living Wage, exert pressure on manufacturers to sustain profitability amidst mounting operational expenses. While this increase is welcomed, additional support or tax reliefs should be expected for manufacturers in certain situations.

Looking ahead, I'm hoping that the next government will act on these issues and provide a multifaceted approach:

Long-term Industrial Strategy: A comprehensive industrial strategy, articulated within the first 100 days, with cross-government commitment and mechanisms for ongoing implementation oversight. This is of paramount importance and is severely lacking at the moment. There are also calls within the industry for a Minister for Manufacturing which I whole heartedly support.. (providing its someone actually from industry).

Skills Revolution and Talent Development: A radical transformation of the education and training landscape to nurture talent, upskill the workforce, and foster a culture of lifelong learning conducive to embracing technological advancements. Whilst I support the governments focus on STEM learning, it appears that its just not enough. We still have a severe lack of STEM and digital skills in the sector and the shift in focus from more creative subjects has harmed education in young people of the recent years. I'd also like to see a focus on design thinking being taught at early ages and a resurgence and renewed focus on creative subjects, particularly that of D&T.

Apprenticeship Levy Review and Apprenticeship Reform: Conducting a comprehensive review of the Apprenticeship Levy and apprenticeship system to ensure they effectively meet the evolving needs of modern manufacturing, facilitating seamless workforce integration and skills development.

Revitalising Manufacturing Advisory Services: Reinstating and modernising Manufacturing Advisory Services to provide tailored support and guidance to manufacturers in navigating technological transitions, enhancing productivity, and fostering innovation.

Facilitating Industry Consultation and Regulatory Alignment: Establishing robust mechanisms for ongoing industry consultation to inform policymaking and regulatory alignment decisions, ensuring responsiveness to sectoral needs and facilitating agility in adapting to regulatory changes post-Brexit.

Global Trade Efforts and Leveraging Manufacturing Strengths: A concerted global trade effort is essential to maximise and leverage Britain's strengths in key manufacturing areas. From automotive and aerospace to pharmaceuticals and advanced engineering, the UK possesses robust manufacturing capabilities that can be further bolstered through strategic trade partnerships and market diversification initiatives. We should also be further supporting Made in Britain products, and offering subsides and grants for companies that champion this.

Its also imperative that we craft a forward-looking vision that transcends immediate challenges and anticipates future manufacturing trends:

Robust Industrial Strategy: Extending beyond 2030 to navigate disruptive transitions, capitalise on emerging opportunities, and harness technological advancements to drive sustained growth and competitiveness.

Embracing the Net-zero Imperative: Seizing the economic opportunities inherent in transitioning to a net-zero economy, driving sustainability, and positioning UK manufacturing as a global leader in clean technologies and sustainable practices.

Accelerating Digital Adoption and Automation: Prioritising digital adoption and automation initiatives to enhance productivity, drive operational efficiencies, and foster competitiveness in an increasingly digitalised global marketplace. This includes a focused effort on AI technologies and digitisation, leveraging their transformative potential to revolutionise manufacturing processes, optimise supply chains, and unlock new business models.

Fostering a Favorable Investment Climate: Arguably one of the most important focuses needs to be creating and enabling an environment conducive to business investment, innovation, and growth by streamlining regulatory processes, incentivising R&D, and crucially bolstering access to finance for manufacturers.

One last wildcard, I'd like to see the government take some of the brightest minds in manufacturing and put them to work with leading healthcare experts on optimising and enhancing the workflows and process's of the NHS.

What next?

The UK manufacturing sector stands at a critical juncture in its evolution. With proactive government support, it can navigate present challenges and emerge as a global leader in innovation and competitiveness. Embracing a bold economic vision centred on manufacturing is essential for driving sustained growth and fostering innovation. As the nation charts its course forward, lets hope that the next government (whoever it is), can provide stability, direction and seize the opportunity to unlock the full potential of UK manufacturing and shape a future defined by resilience, ingenuity, and prosperity.