18 May 2016

  |  CBI North East

Update

Sarah Glendinning: Calling for modern industrial strategy

This column appeared in the Journal on Tuesday 17th May 2016 

Sarah Glendinning: Calling for modern industrial strategy

The UK’s manufacturing base may be shrinking, but it’s also undervalued. By tackling its main barriers to growth – skills, energy and research and development – the sector has a significant role to play in making the UK’s economy more balanced, more diverse and more innovative. 

We are heavily reliant on the sector here in our region with manufacturing providing so many of our jobs both directly and indirectly, so making the most of these opportunities is critical. 

These issues were under the spotlight at the CBI’s “Future of Manufacturing” conference, held on 5 May at the University of Warwick where CBI director-general Carolyn Fairbairn led the charge by calling for a modern industrial strategy to help others achieve the same success as aerospace and automotive.

She cited how in many ways, our recent history is a ‘tale of two sectors’. Steel provides a sharp example of where as a nation we didn’t think long term, where the answers didn’t come until it was too late. Yet the automotive industry provides the evidence that a clear, collaborative approach works.

By listening to the “asks” from the automotive government has helped support investment in people, new technology and supply chains – leading to productivity that’s twice the national average. 

The urgency behind the CBI ask was laid out in the context of the digital revolution. It doesn’t require a particularly long-term view to see the impact that digital technology is having – and will continue to have – on manufacturing.

Martin Donnelly, permanent secretary at the Department of Business, Innovation and Skills, said he was confident that the “fourth industrial revolution” would lead to new opportunities for UK businesses.

But he was also very aware of the speed of change, adding that government was committed to working with business, working closer to find the structures that help.

The scale of the challenge is clear: the UK currently ranks 14th in the world for adopting new technologies, despite being the 5th in the world for the availability of digital.

Where the UK punches above its weight on research, we are slower at putting it into practice. As Brain Holliday, managing director at Siemens Digital put it “We need to move the focus from innovation to implementation.”

So how can firms make change happen?  Technology needs demystifying for many and there needs to be a clear focus on company culture – from risk appetite to engaging everyone in an organisation in the process from the shop floor up.

Looking hard at and learning from both competitors and those in different sectors is key, while collaborating can amplify benefits all through the supply chain too. 

Greater financial support for UK innovation such as expanding Innovate UK’s Catapult network, where funding is currently being squeezed despite proven results, was a key point argued by speakers and attendees at the event. 

Speakers also argued that there should be more open innovation events and transparency from business around the kind of developments they are looking for. Sir Michael Arthur, executive chairman at Boeing UK, highlighted that working with the supply chain helped ensure the innovation efforts of smaller companies were focused on something larger firms can actually put to use.

As you can imagine, discussions were also never far away from the issue of skills. The changing nature of manufacturing requires a changing range of skills, and yet there were worries that core skills such as design and technology are being marginalised in schools. 

The sector also needs to address the persistent and outdated negative reputation of manufacturing as it is affecting the numbers interested in a job – or apprenticeship – within it.

But concluding the day, manufacturing “rock star” and founder of the Warwick Manufacturing Group Lord Bhattacharyya said; “We should stop complaining and do what’s best: innovate”.