Dr Nick Wright, Director of Industry Engagement at Digital Catapult, outlines what must be done for the UK manufacturing sector to adopt emerging technologies and maintain its competitive edge.
With an average output of £183bn, British manufacturing is often heralded for its innovation, commitment to excellence, and pioneering output. Global analysts point to the likes of BAE Systems, Rolls-Royce, and other industry leaders as prime examples of manufacturing excellence.
It must be noted however, that maintaining its esteemed position in an increasingly competitive global landscape is by no means an easy feat for the UK, and requires a rethink around innovation, investment, and collaboration.
Critical to the country’s long-term manufacturing success is its embrace of emerging technologies. The current landscape has taken great strides in developing tech-enabled solutions to improve efficiency, but more must be done to help manufacturers adopt technology that has proven successful. This will be a determinant of the UK maintaining and sharpening its global competitive edge.
The UK manufacturing sector’s low adoption of new technologies is sabotaging competitiveness
The UK sits within the top ten countries for manufacturing output globally, but slow adoption of emerging and Fourth Industrial Revolution technologies (4IR) amongst manufacturers could risk this position.
As it stands, the UK is number 9 in the world, employing over 2.5 million people across the country, but failing to adopt innovation at scale has been highlighted as a significant threat to the UK’s global standing.
In fact, 94% of UK manufacturers believe the industry has fallen behind the US due to a lack of investment in digital technology, and other major economies are making significant investments in the development and deployment of emerging technologies, to advance the output of their manufacturers.
Technology is often touted as the silver bullet to strengthening the UK’s manufacturing output and bolstering levels of productivity amid stagnant economic growth.
Last year, the UK manufacturing industry contributed approximately £206bn in gross value-added (GVA) output. On the surface, this looks impressive, but in the last ten years, the share of manufacturing GVA relative to output for the entire economy remained close to 10%. This indicates that the manufacturing sector’s contribution to UK economic output has not improved in over a decade.
The consequences of slow technology adoption are thus far-reaching. UK manufacturers are falling behind their global competitors in terms of cost-effectiveness, product quality, and customisation capabilities. Their ability to integrate into global value chains and leverage emerging technologies is also limited, and this is leading to weakened international collaboration and strained commercial partnerships.
It’s clear that the slow adoption of emerging and 4IR technologies is detrimental to the competitiveness of the UK’s manufacturing sector, but it’s equally important to understand why.
Despite the UK being ranked third in the world in terms of technology investment, less than 1% of that investment goes into industrial digital technology, representing a missed opportunity. As it stands, the manufacturing industry is not an attractive area for innovators to grow their businesses.
The barriers preventing manufacturing from propelling forward
With a legacy of innovation and manufacturing excellence, one might wonder why UK manufacturing growth has seemingly stalled in recent years. At Digital Catapult, we’re committed to driving industry growth and delivering for the economy, and we’re keen to assess what’s halting the adoption of new innovation in the manufacturing space, and how this can be mitigated.
With the UK workforce ageing and pay growth slowing down, manufacturing businesses find themselves in a challenging position. Many are struggling with limited resources and are solely focused on day-to-day operations to keep their doors open. This means that for the most-part manufacturing companies are focused on short-term benefits over more strategic growth, decreasing their levels of productivity and operational efficiency.
One key issue at the macro level is the industry’s emphasis on short-term incremental innovation rather than long-term scaling and successful adoption. This approach often leads to solutions that are not readily leveraged or applied at the necessary pace to keep up with global trends and demand.
It is crucial for the industry to prioritise scalable and adoptable solutions that can be effectively implemented to meet the needs of a rapidly evolving world. By shifting the focus towards long-term scalability and successful adoption, which we endeavour to achieve at Digital Catapult, the industry can ensure that innovative solutions are effectively deployed to tackle global challenges in a timely and impactful manner.
Sustainable innovation as the key to successful technology adoption
As every industry looks to cut its carbon emissions and meet the UK Government’s target of net zero by 2050, it presents the perfect opportunity for manufacturing businesses to effectively adopt sustainable innovation. Sustainable innovation holds the key to breaking the doom cycle and creating a brighter future for the UK manufacturing sector, increasing competition in the global ecosystem.
With more companies recognising the urgent need to address environmental challenges, many have made sustainability commitments. By demonstrating that they are accelerating net zero targets, companies can tap into a significant market opportunity, given that sustainable practices are increasingly sought after by industry and investors.
However, sustainability cannot be achieved in isolation. It must be intertwined with digital transformation. Digital technologies serve as powerful enablers of sustainability strategies and practices. They provide tools for efficient data collection, analysis, and monitoring, helping companies identify areas for improvement and make informed decisions. Embracing digital solutions allows organisations to optimise their operations, reduce waste, and enhance resource management, all contributing to a more sustainable future.
This is why Digital Catapult has introduced the Made Smarter Innovation Sustainability Accelerator (MSISA), a national acceleration programme, set to fast forward and shape the UK’s technology solutions directly into industry. The programme will accelerate the adoption of digital solutions specifically designed to tackle major sustainability challenges in the UK manufacturing sector, improving the competitiveness, efficiency, and performance of the industry.
By embracing sustainability, leveraging data to demonstrate impact, and utilising digital technologies as enablers, companies can position themselves at the forefront of the market, driving positive change and creating a more sustainable world.
The transformative potential of emerging technologies
The MSISA will leverage emerging and 4IR technologies including AI, distributed ledger technology and Internet of Things (IoT) to help businesses optimise their energy and resource efficiency, demonstrating the transformative potential of emerging technologies. While these technologies can help manufacturing companies to embrace and adopt sustainable innovation, the solution will have a transformative impact beyond achieving key environmental objectives.
Leveraging emerging technologies such as Artificial Intelligence and Machine Learning for example, can allow manufacturing businesses to predict consumer demand accurately, enabling them to optimise production schedules, inventory management and supply chain operations, improving overall efficiency.
IoT technology can also help manufacturers to cut-costs related to their energy consumption by using advanced sensors in factories, offering business leaders real-time data on energy usage across operations.
Given the surge in energy prices recently, not only can emerging technologies meet environmental objectives but can help businesses to cut energy costs where possible too. In fact, integrating data from sensors with predictive analytics algorithms can allow businesses to identify energy inefficiencies, detect patterns of excessive usage and optimise their energy consumption too.
Embracing innovation and adopting emerging technologies is vital for the UK manufacturing sector to maintain its competitive edge on the global stage. By addressing barriers to technology adoption and focusing on collective responsibility, we can drive industry growth and deliver a more sustainable future.
Through initiatives like the Made Smarter Innovation Sustainability Accelerator, transformation of the UK manufacturing sector can be enacted, unlocking transformative potential, improving efficiency, and ensuring a thriving manufacturing sector that drives global competitiveness.
