The fourth industrial revolution – Industry 4.0 – is here.
Britain can be at the forefront of it, just as it was for the first.
It is easy to be pessimistic,
especially in times of change,
but what is not so easy is looking
at opportunities for growth,
development and innovation in a
landscape still dominated by talk
of rising production costs, reduced
access to international markets
and the threat of impending
tariffs. That is precisely what UK
manufacturers continue to do,
however, confounding any fears
that Brexit might have caused
manufacturing to hit the buffers.
The UK Manufacturing PMI remains comfortably
above the 50 mark, which would indicate stagnation in
manufacturers’ investment intentions; the index’s recent
upward trend to 55.9 evidences a clear intention amongst the
UK’s manufacturers to invest and expand their operations to
take advantage of the increase in demand both at home and
abroad. Employment figures are encouraging, as are order
books – at the end of 2016, backlogs of work increased for
the first time since February 2014. On an annualised basis,
manufacturing output is up by over 20% year-on-year.
On the other hand, Brexit continues to present
an uncertain future and the impact of President Trump’s
administration’s protectionist policies are yet to be felt on this
side of the Atlantic. Rising energy costs continue to present a
problem to small and large companies in the UK, as does the
skills shortage in STEM subjects. Private enterprise may be able
to ride out the storm but it will take Government intervention
to properly address the systemic challenges to the sector. The
government’s industrial strategy may be the starting gun for
just such an intervention.
There was a first sign of turbulence early in 2017
when the Society of Motor Manufacturers & Traders (SMMT)
reported slower investment following several years of strong
growth – despite Nissan’s commitment to two new plants in
the North East. Some see this development as the bellwether
for the sector as a whole as it slowly recognises the reality of a
harsher post-Brexit trading environment. Perhaps the glowing
growth figures belie an impending downturn of which the
SMMT’s announcement is a portent. In truth, it remains too
early to tell.
Brexit presents a challenge to the status quo as
UK plc looks to new markets – this is nothing new. But the
changing face of manufacturing is as much, if not more, about
what companies are doing to force change in the sector as it is
about what companies are doing to react to existential threats.
Industry 4.0 – the trend toward automation and use of data
– represents just such a shift and it is one being embraced by
companies and Government alike.
Investment in R&D is up but it still lags behind other
OECD countries. The Government has pledged to invest an
extra £4.7 billion in research and innovation in the next four
years in an effort to replicate and build on the breakthroughs
achieved in recent years by the High Value Manufacturing
Catapult centres. The capability of these world-class centres
of technological and process innovation is an example for
how Industry 4.0 should be embraced; the Government’s
all-party group on Industry 4.0 would do
well to follow the lead of the Advanced
Manufacturing Research Centre
(AMRC) and others.
But innovation cannot
be driven only by Government
or academia; it is the input,
investment and enthusiasm of
private enterprise that funds
the vast majority of the UK’s
manufacturing R&D either
in collaboration with the
likes of the Catapult centres
or through their own in-house
programs. Notably, of Forbes’
list of the world’s most innovative
companies, six are UK-based with
four of them - SAB Miller, Smith &
Nephew, Reckitt Benckiser and ARM Group
- flying the flag for the UK’s manufacturing sector.
Even away from the PLCs, innovation is no less noteworthy;
Islabikes’ Imagine Project is a fantastic vision of the future
with its commitment to developing a closed-loop supply chain.
Many more are likely to follow suit.
The sector’s future will be shaped more by people
than by products or processes. Many would argue that this
is where the sector’s greatest challenge lies, in shaking off
its long-established reputation as the dirty underbelly of
UK plc and presenting it for what it actually is – a beacon
of advancement and achievement. Only by attracting the
brightest minds to the sector can it continue to thrive in a
world where the vast majority of tomorrow’s STEM graduates
– by some margin – will emanate from the Far East. The UK
will inevitably find itself playing catch-up in an effort to deliver
better training and skills but it shouldn’t prove to be too late,
especially given the strong domestic skills base. Perhaps
adopting a regular review structure for skills, similar to the
start-of-parliament defence and public spending reviews would
help focus the Government’s efforts - and investment.
Whilst there remains plenty to be said on the
challenges posed by Brexit, the uncertainty about what
it will entail means we must reserve judgment – and
commentary – for later. Much is said of a
blossoming relationship with Canada
and a potential repositioning toward
India, but at the moment nothing is
known of what form our post Brexit
trading landscape will
take. Our exit from the EU will
undoubtedly be a key part of
what constitutes the changing
face of manufacturing but it is
only part of the puzzle for the
sector today.
Automation will have
an increasingly significant
role in shaping the workforce
of the future, and the extent
to which automation jeopardises
the human role in the manufacturing
process will depend not only on the speed
of technological development but the attitude of
policy-makers. And whilst it might be too early to talk of an I,
Robot-like future where bots are masters of their own destiny,
the speed at which industry is embracing the opportunities
afforded by automation is notable. Factory 2050, on the
site of Rotherham’s AMRC, is just one example of how the
latest advancements are being deployed to demonstrate the
benefits of automation.
With increased productivity, better development of
skills and access to international markets, the sector should
prosper. And driving all of that will be the UK’s continued
innovation and investment toward a changed face of
manufacturing – leading the way on the fourth industrial
revolution just as we did on the first.
Published: 16 May 2017
Focus on Manufacturing - Edition 5
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