Most articles on British manufacturing reminisce about the industrial revolution and how we were the world’s leading commercial nation by the 19th century, dominating the mass production of textiles, steel, machine tools and so forth. Then there is often a consideration of how this developed into assembly lines and into computer-driven automation.
All the above is correct as far as it goes – and it is reasonable to say the cliché-driven mantra about the UK not being a manufacturing economy today is hugely overstated and part of a media-driven myth. Look at Toyota in Deeside, where a workforce of more than 500 people manufactures a new car engine every 57 seconds. Siemens in Hull is building wind turbine blades for Horsea Project Two, which will generate power for more than a million homes.
British manufacturing is alive and well. The UK ranks in the top ten manufacturing nations in the world, with the sector employing 2.7m people and representing 69 per cent of business research and development. We want to continue to build on our manufacturing heritage and strengths. However, what I have seen in my travels throughout the UK in my capacity as the Minister of State for Business and Industry is that UK manufacturing can succeed under foreign ownership with foreign capital and management techniques imported from home countries such as Japan and Germany. Our test is to see if a new generation of startups can morph into large companies with UK capital and a modern management system aided by AI and a hugely upskilled workforce.
In November 2017, this government launched its modern Industrial Strategy. Its mission is simple: to boost productivity by backing businesses, creating good jobs and increasing the earning power of people throughout the UK. Our Industrial Strategy will play a huge role in preparing the UK manufacturing sector for the Fourth Industrial Revolution.
In July 2018, the prestigious Farnborough International Air Show presented us with an opportunity to showcase our support for the future of UK aerospace. As part of our modern Industrial Strategy, government and industry committed to invest almost £4bn in UK aerospace from 2013 to 2026. More than £340m of this investment will support 18 revolutionary projects, including the development of hybrid electric engines, so that we can increase opportunities for smaller businesses, boost the productivity of the sector and develop cutting-edge technologies to help the UK lead the world in aerospace manufacturing.
When we look at our manufacturing industry today, it has been transformed in both scale and sophistication to an extent that our ancestors could never have imagined. Now with the digitisation of manufacturing transforming our industries, the future is already upon us.
Take Ocado, a British online-only supermarket leading the charge in digital manufacturing and artificial intelligence. On the outskirts of a small town in Hampshire sits “The Grid”, an automated distribution centre spanning 240,000 feet. Digital technology presents our manufacturing sector with huge opportunities to further increase productivity, and to create new markets, but we must be active to seize them.
To help businesses grasp these opportunities, we are backing the Made Smarter Review, an independent, industry-led review chaired by Juergen Maier, CEO of Siemens UK, with input from over 200 businesses, setting out how UK manufacturing can be transformed through the adoption of industrial digital technology (IDT), supported by a strong government industry partnership. The review identifies a wealth of opportunities, boosting UK manufacturing by £455bn, creating 175,000 jobs and reducing harmful CO2 emissions by 4.5 per cent over the next decade.
In February, we announced a Made Smarter Commission, and asked Sir Mark Walport, chief executive of UK Research and Innovation, to work with Juergen Maier on the development of a funding proposal. In May, we announced £20m of new funding for a pilot scheme in the North West to provide support for up to 3,000 manufacturing SMEs to adopt digital technology.
Those organisations that have already embraced digital technology have already made transformational improvements to UK manufacturing. But the technology alone is not enough. We have to ensure we have the right people in the right roles. To do that we need to address skills shortages. This is why we have made new investments in excess of £400m in maths, digital and technical education, helping to boost science, technology, engineering and maths (STEM) skills.
We’ve also developed a National Retraining Scheme targeting sectors with skills shortages. They will initially focus on digital and construction skills and establishing Skills Advisory Panels to identify current and future local skills needs, shaping the provision and funding of 16+ education, training and careers guidance. This includes expanding construction training programmes across the UK, and increasing apprenticeships starts to 25,000 per year and offering 1,000 T-level placements by 2020.
In February, we announced a £184m investment in the next generation of scientists and engineers. This will help to create more successes like YASA Motors, an Oxford University spin-off which has created a new electric motor production facility to supply the worldwide growing demand for high-quality UK products.
The new site will help deliver the next generation of environmentally-friendly hybrid and pure electric vehicles, 80 per cent of which are destined for export around the world. With these investments, we are putting the UK in the driving seat to lead the Fourth Industrial Revolution. A revolution where workers will be properly supported with the skills and expertise needed for the future, one where these skills will inspire future generations and help build a Britain fit for the future.
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