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UK manufacturing and the Industrial Strategy – what’s the hold-up?

by Heat Recruitment

Founded in July 2016, the Department for Business, Energy & Industrial Strategy released their commitment to UK manufacturing. The Industrial Strategy detailed, quite specifically, how the government intended to “boost the productivity and earning power of people throughout the UK”.

Key criteria of this included a major upgrade to the UK’s infrastructure, a repositioning of the UK’s business environment to encourage new businesses and creating an environment where innovative ideas were enabled to flourish. In short, “building a Britain fit for the future”.

The strategy, in essence, has been designed to close the well-reported productivity gap between the UK and its G7 rivals. Indeed, output per hour worked in the UK, according to recent ONS figures, was 15.1% below the average of advanced G7 economies.

The move to increase productivity was undoubtedly a welcome one. In theory, it would increase competitiveness, boost profitability, and increase employment prospects for those involved.

So why has nothing happened yet?

Originally, the creation of an Independent Industrial Strategy Council was pinned to begin activity in spring of 2018, with Lord Taylor of Warwick confirming his concern over the lack of action, questioning Her Majesty’s Government on May 8th as to what steps had been taken.

In addition to this, the EFF – the trade body which represents 20,000 manufacturers across the UK – has entered the discussion. Representing its members, the organisation has now called on the UK government to deliver on its pledge. This follows the end of a near year-long growth in manufacturing output which ended towards the start of this year.

Speaking on the decision, Lee Hopley, Chief Economist at the EFF, confirmed that the council was needed “urgently” to not only ensure the strategy was actually implemented, but also to “identify how the overall strategy can improve productivity.” This was called for in addition to the implementation of recommendations from the “Made Smarter Review” – a strategy to improve the UK’s productivity through the use of digital technologies.

Despite the clear benefit to implementing the strategy, particularly around Brexit uncertainty, the EFF iterates that the UK government has yet to take up the review’s proposals – despite pledges that the strategy would be ready for adoption by this point.

Releasing their own report on the subject of Britain’s manufacturing industry, the figures noted that the sector’s productivity had fallen – from a rate of 4.7% between 2000 and 2007, to less than 1% per year since the last recession.

The reasons for the delay between identification of the issue and actually making changes, however, are currently unclear. Speculating, the EFF advised these delays could be attributed to poor leadership and management capabilities. An alternative reason suggested by the body was under-investment.

Regardless of when this white paper will translate to verifiable productivity gains, one thing is clear – the UK is in desperate need of a productivity boost to remain competitive. Juergen Maier, CEO of Siemens UK & Ireland, spoke on the topic, advising: “When you start connecting railway infrastructure, turbines and other industrial equipment, then you uncover massive opportunities for optimisation. You can really use this convergence of the physical and digital to better model predictive breakdowns and movements … We can create more jobs through artificial intelligence, additive printing and other data-intensive manufacturing processes – and these jobs will be higher-value, better-paid jobs.”

If you’re looking for your next top-tier employee, or a candidate seeking a change of career, get in touch with our team at Heat Recruitment today. We’re experts in the Engineering & Manufacturing sectors and are here to help.

By Dan Whitmarsh