Out-Law News | 30 Oct 2017 | 2:40 pm | 4 min. read
The 'Made Smarter Review' (231-page / 3.96MB PDF) identified the potential to boost UK manufacturing by £455 billion over the next 10 years through "faster innovation and adoption" of technologies such as those support the automation, real-time monitoring and reengineering of manufacturing processes, as well as additive manufacturing, data analytics, artificial intelligence, blockchain and virtual reality.
The report said the speedy implementation of these 'industrial digital technologies' (IDT) by businesses could boost industrial productivity by more than 25% by 2025, help create as many as 175,000 new jobs in the UK, and help the country cut its CO2 emissions by up to 4.5%.
It said, though, that there is a "lack of effective leadership of industrial digitalisation in the UK" at the moment and that the country has lower levels of adoption of digital and automation technology than other "advanced nations", particularly among SMEs. The UK is also not making the most of existing strengths, such as its position as a leader in research and innovation, the report said.
The review was led by Juergen Maier, chief executive of Siemens UK and Ireland, and included contributions from a number of representatives from across the manufacturing and business community, including Atkins, GSK, IBM and Jaguar Land Rover. The findings are likely to influence the government's industrial strategy, a draft of which was published in January.
A series of recommendations designed to enable the UK to become a global leader in industrial digitalisation by 2030 were contained in the report, including plans to establish a new a new "National Adoption Programme (NAP)" to encourage and speed up "the development and adoption of IDTs by manufacturing SMEs and across supply chains within the UK regions"
NAP should be piloted for six months in the North West of England to help prove the "proposed operating model", the report said.
"The North West is one of the UK’s largest regional economies. It also has the greatest manufacturing output, producing 9% of the UK’s total exports, with activity in a wide range of industrial sectors such as aerospace, automotive, chemicals, biomanufacturing and agriculture," the report said. "It has a higher proportion of workers in low-paid employment than the national average… Underinvestment in the North West’s infrastructure, skills base and business support and innovation networks, has left much of the region struggling to compete in a rapidly advancing global economy."
The report said "targeted financial incentives", such as tax breaks for those that adopt IDTs, should be implemented to "promote the development and adoption" of the technologies by businesses.
The report also set out industry ambitions to "upskill a million industrial workers to enable digital technologies to be successfully exploited" over the next five years.
To help achieve that goal, the report said a new industry skills strategy and implementation group should be set up to help identify "future skills requirements", and that businesses should be incentivised into retraining their staff to account for the technological changes impacting the industry. The costs of retraining can serve as a "disincentive" for such investment currently, it said.
"We are proposing that retraining/reskilling is incentivised to address the weak demand from employers (currently half the EU average), to encourage organisations to train workers in the next generation of IDT skills, and to engender a culture of continuous workforce development and reskilling," the report said.
"The programme would be targeted at SMEs and those workers whose jobs are most likely to be affected by technology, particularly lower-skilled jobs involving repetitive tasks that are more vulnerable to automation," it said.
Employment law specialist Rob Childe of Pinsent Masons, the law firm behind Out-Law.com, said that the report contained plenty of positives.
"It is good to see the suggestion to pilot the national digital ecosystem in the North West where there is a real opportunity to harness the work of smaller and medium sized engineering companies and experiment with new technologies," Childe said.
"It is also encouraging to see the focus on upskilling workers within the manufacturing sector, in part achieved by the manufacturing and university sectors working together. We have already seen this approach work well in the sector as manufacturers start to work with higher education providers to design apprenticeships to upskill their employees. It is clear from the report that the current skills gap must be addressed as a priority to unlock the potential within the sector," he said.
The report also contained plans to create a network of Digital Research Centres (DRCs), initially in the areas of artificial intelligence, machine learning and data analytics, additive manufacturing, robotics and automation, virtual reality and augmented reality, and the industrial internet of things (IIoT) and connectivity.
Further proposals to develop new standards "to promote the greater interoperability of IDTs", and create new 'data trusts' to boost data sharing among industry were included in the report. Data trusts were also advocated in another recently published report from a government-commissioned review into artificial intelligence.
Other recommendations include those aimed at increasing awareness of the potential of digital technologies to revolutionise manufacturing. They included proposals for a new Made Smarter UK Commission (MSUK).
"[The MSUK] would be a national body, comprising industry, government, academia and leading research and innovation organisations, responsible for developing the UK as a leader in IDT," the report said. "With a chair from industry and a ministerial co-chair this public–private partnership would provide a market-focused view on IDT priorities, and ensure the faster innovation, adoption and diffusion of IDT to drive maximum value for the UK economy. The MSUK Commission would establish and govern a more visible and better-organised ecosystem that will deliver business transformation through innovation."
A recent report by Warwick Manufacturing Group found that many businesses are not ready to take advantage of the opportunities presented by the fourth industrial revolution, 'industry 4.0'.