Help from government to invest in new technologies and a better educated workforce top the wish list for UK manufacturing executives, according to a new report from KPMG.
Almost three quarters (70 per cent) of UK manufacturers surveyed by KPMG said financial support from the Government is needed to help them increase investment in emerging technologies, including artificial intelligence, advanced robotics and augmented reality. Access to a better educated workforce came a close second, with 65 per cent of respondents stating that an improvement in the availability of skilled talent could help them increase productivity in their organisations.
Stephen Cooper, UK Head of Industrial Manufacturing at KPMG, said: “The majority of UK manufacturing executives named financial support for R&D as a top priority from the Government to help them boost their competitiveness and prepare for the digitalisation of manufacturing. Clearly there’s an appetite to embrace emerging technologies, as highlighted in the recent industrial strategy green paper. The UK has an opportunity to position itself as a globally attractive and competitive base for advanced manufacturing.
“At the same time, with the gap between supply and demand of STEM talent in manufacturing set to widen, government, industry and educators will need to act quickly to ensure the manufacturing sector is equipped with the right skills for digitalisation. Digital scientists, digital engineers, digital architects, cyber security engineers – none of these existed 20 years ago. Having access to the right skills and investment will be crucial to ensure Britain’s manufacturing sector unlocks its full potential and remains fit to compete on the international stage.”
In light of the Brexit vote, the report also revealed that, encouragingly, almost half (43 per cent) of outward investors are undeterred by the uncertainty the vote has created, and don’t believe that it will make it harder to recruit. A third of respondents are considering relocating some of their operations out of the UK over the next three years, while 67 per cent have no plans to move.
Putting this into context, Karen Briggs, Head of Brexit at KPMG, commented:
“When our survey was carried out in January, two thirds of respondents expected uncertainty around Brexit. However Britain’s makers are an especially resolute group. Although some are concerned about exchange rates, labour pressures and higher indirect taxation, they are also taking a range of practical measures to prepare. These include partial relocation, supply chain management, increased business development, and new sources of financing. UK manufacturers realise that Brexit will demand a burst of innovation from both the private and public sectors if the UK is really going to reach new global markets and deliver on its potential.”
If faced with rising costs, the majority of respondents (65 per cent) plan to make up for these by either saving costs elsewhere, or by absorbing them, while 35 per cent, expect to pass these on to the customer.
“A focus on openness to foreign investment, access to talent, engagement with new markets, a positive regulatory and legal environment, as well as a coherent industrial strategy will drive the UK to new levels of competitiveness and ensure manufacturers are ready to capitalise on Industry 4.0. It’s time for a rethink,” concluded Cooper.
