Andrew Borland, CIO at the Virtual Engineering Centre, University of Liverpool, looks at how digital technologies can help transform UK manufacturing.
In January, UK manufacturing body Make UK published the findings from its Executive Survey 2024 in partnership with PwC – findings which show that, in spite of the challenges of recent years, there are optimistic signs about the prospects for the manufacturing industry in 2024 and the role digital technologies have to play.
Despite the sector’s share of the UK economy dwindling from 25% of GDP in the 1970s to reportedly just 9.4% last year, the survey’s findings suggest that manufacturers now largely believe they are looking towards an era of growth, setting their sights on an increase in manufacturing GDP to 15%.
More than half of the companies surveyed believe the UK to be a more competitive place in which to manufacture, compared with just under a third in the same survey last year, while nearly two-thirds feel that the circumstances and the environment in which they operate are improving.
After a challenging few years through the pandemic and energy crisis, both for the industry and the UK as a whole, it’s easy to forget that UK manufacturing has always fought its way back from hard times, since the dawn of the Industrial Revolution in the 18th century,
Manufacturing made Britain’s economy. Today the sector remains a dynamic and resilient force, built on a rich heritage that was hard won. Make UK’s findings prove the renewed sense of confidence in prospects for the industry, in part thanks to a growing consensus among political leaders and a growing sense of commitment to the sector’s long-term success. A fundamental shift in government attitude is in the air.
Geopolitics risk, the need for environmental sustainability, regional inequality in the UK and a stagnating national economy – all these challenges can only be tackled by prioritising a pivot back to manufacturing. However, what are the tools needed to drive this growth? How can we shape a brighter, more sustainable and competitive future for UK manufacturing?
Facing barriers to change
There’s no doubt that the sector continues to face challenges and barriers to adopting technological innovations as tools for strategic growth. Forty percent of UK manufacturers believe the industry is falling behind competitor countries including the US due to a lack of investment in digital projects, which are vital for companies to be able to compete on a global market.
Skills gaps across the industry remain at the top of the list of challenges, creating a shortage of talent equipped for the demands of modern manufacturing. Recent research by Made Smarter found that eight out of ten manufacturers recognised that gaps in skills and knowledge were impacting on their ability to adopt digital technologies. Upskilling manufacturers will play a pivotal role in bridging this gap, allowing employees to gain crucial skills and adapt to a constantly changing industry.
Investing in training the next generation of manufacturers and reducing knowledge barriers is essential, granting businesses and individuals a deeper understanding of the possibilities and benefits that digital innovation can offer, while giving them the tools to access such benefits. Being more ambitious on the automation front, attracting young talent and helping older talent that want to remain in the workforce will help as well.
Crucially, we need to be more creative in our approach to finance and investment. A scarcity of finance means manufacturing companies are focusing efforts on keeping afloat rather than on strategic growth, as a result compromising on investment into boosting productivity and operational efficiency.
Outdated systems which haven’t adapted to the needs of modern manufacturing are slowing down progress, but many businesses don’t have the financial capital to innovate in the current economic climate. If the government and investment community could show manufacturing some of the patience, risk appetite and creativity they show the tech start-up community, we might be onto something.
Building a thriving future
Digitalisation is one of the biggest challenges facing the industry, but equally one of the greatest opportunities. In fact, another survey from Make UK found that 80% of manufacturers believe that digitalisation will be a reality for their businesses by 2025. In the automotive sector alone, it’s predicted the industry could add £8.6bn in value to the UK economy every year by 2035 if it continues to embrace digital manufacturing and shift to fully digital vehicle manufacturing factories.
In an increasingly competitive global market, the successful adoption of digital technologies is critical in order to allow our country’s manufacturing industry to become a global leader in advanced digital capabilities.
With the UK government’s commitment to reaching net zero by 2050, organisations face increasing pressure to evolve to more sustainable production and practices, and the manufacturing industry has a leading role to play. Manufacturing is responsible for 17% of the UK’s greenhouse gas emissions, and to meet the government’s net zero target, industrial emissions must be reduced by at least 90%. Decarbonisation is therefore one of the industry’s greatest challenges, but it also offers a significant opportunity.
Digitalisation and sustainability go hand-in-hand – digital innovation will play a fundamental role in the mission towards decarbonisation and net zero through the advancement of cleaner technologies. Embracing digital solutions allows businesses to optimise operations, reduce waste and enhance resource management. One such example is additive manufacturing, or 3D printing, which can create complex parts on-demand, such as automotive parts or customised medical implants, reducing waste and streamlining supply chains.
The use of tools such as artificial intelligence (AI) and machine learning can also offer data-driven insights, allowing organisations to track metrics and leverage data to analyse and demonstrate environmental impact. By helping to identify energy inefficiencies and optimise consumption, adopting digital technologies can form a key part of companies’ energy efficiency strategies and reducing carbon footprints.
Digital transformation will also help to improve efficiency and flexibility, helping to streamline work processes and allow businesses to adapt to industry demands. The adoption of technologies such as digital twins, for example, can help manufacturers simulate real situations and their outcomes, ultimately allowing them to make strategic decisions and enhance performance, while speeding up design cycles. We need to make more of these technologies and approaches which are available to smaller businesses at low or no cost.
Another example of this is the Industrial Internet of Things (IIoT) – embedding sensors in machines that constantly monitor operations, enabling real-time data analysis which can then be applied in decision-making, allowing organisations to optimise processes and strategies for improved results. Leveraging these emerging technologies can also allow manufacturers to accurately predict consumer demand, and as a result optimise product development, inventory management and supply chain efficiency.
Meanwhile, the introduction of robotics and automation, where the UK is currently behind the global average in terms of robot density, to handle repetitive tasks like welding and assembly has the potential to free human workers’ time for more complex problem-solving and oversight roles.
Digital technologies can become a supportive tool, empowering manufacturers to make informed decisions and solve problems, improving efficiency and productivity – which will prove not only advantageous for the sector, but for the country’s economy as a whole. These technologies will not replace humans, but work with them, to help build a thriving manufacturing sector for the UK.
Innovation and commitment
Digital technology and innovation are a journey, not a destination – a constant process within the businesses, not a revolution; competitiveness and productivity enabled by technology but delivered by people’s vision and commitment.
The industry is already collectively moving in the right direction towards a digital future, evidenced by the commitment and adaptability of manufacturers during the height of the COVID-19 pandemic, when industrial digital technologies (IDTs) were rapidly adopted.
Businesses were also forced to adopt remote and flexible working policies, necessitating the use of new digital platforms and technologies in order to continue to carry out business. Despite the challenges it brought, the pandemic vastly accelerated this shift, with rollouts of digital programmes which would under usual circumstances have taken years to achieve being adopted in a matter of months out of necessity.
The sector has without doubt proved its resilience and ability to adapt to unanticipated and challenging circumstances, but beyond this, a culture of continuous improvement is vital to ensuring a thriving future for the UK manufacturing industry.
Embracing this future requires a concerted effort. Collaboration is key, not just within individual companies, but across the entire manufacturing landscape and in partnership with government. Governments need to hear directly from manufacturers what they need, from skills to investment.
Government initiatives are crucial in providing funding, infrastructure and skills development but they must be informed by manufacturers. Academic and research institutions have a role to play, propelling innovation through cutting-edge research and technology transfer, working for and together with their local industries, but SMEs must be front and centre.
For too long innovation has been reserved for larger-scale, global businesses, who have the knowledge, workforce and financial power to adopt new technologies. Moreover, many of the challenges faced by the sector more widely are amplified for SMEs, who may lack the support and funding to innovate, leaving them lagging behind at the digital starting block.
To tackle these setbacks, bespoke, dedicated support and investment for SMEs is crucial. These programmes have to informed by SMEs and focused on the practical support that they need and want. Through this we have the potential to foster growth and revitalise our manufacturing industry from the bottom up. It’s within these businesses that the government is now looking to concentrate its efforts to ‘level up’, yet a lack of knowledge and awareness of available support schemes is further holding back progress.
With finances and time stretched among SMEs, access to bespoke advice to help choose the most appropriate technologies is fundamental to enable businesses to make the best choices and most efficient investments to facilitate innovation and drive growth.
It’s this innovation that the VEC is supporting with the Horizons project, a partnership between the University of Liverpool’s VEC (Virtual Engineering Centre), Liverpool John Moores University (LJMU) and Edge Hill University to support business innovation across the Liverpool City Region.
Led by the VEC, the £5.1m Horizons programme is funded by the government through the UK Shared Prosperity Fund (UKSPF) and will support more than 100 SMEs in its pilot phase, providing the expertise, facilities and funding businesses need to drive innovation. Critically, it is targeted support administered across the region in partnership with local universities that understand the nuances of regional businesses and the unique challenges and pressures they face.
By supporting UK manufacturers on their innovation journey and in embracing digitalisation, projects like Horizons have a vital role to play in helping businesses find smart solutions to improve capacity and productivity, maximise efficiency and boost economic growth.
Conclusion
In a global landscape facing rapid technological advancements and increasing global competition, it’s crucial that the UK manufacturing sector evolves, or it risks stagnation. Embracing digital technologies and innovation is a necessity for the UK manufacturing industry if it’s to meet the GDP projections outlined in Make UK’s report, starting with emerging sectors and SMEs to drive upward growth.
With the positive sentiment indicated by Make UK’s survey signalling that 2024 could be a pivotal moment of change for the sector, manufacturers have the opportunity to ride this wave of optimism and positive momentum and take advantage of the support available to them. With the right support and investment, UK manufacturers must seize the moment and embrace digitalisation to help build a new, prosperous digital economy.
The original ‘The Manufacturer’ piece can be found here.
