CBI outlines manufacturing modernisation plan

Speaking to manufacturers at the University of Warwick, CBI director-general Carolyn Fairbairn says every manufacturing sector should have a plan for its future.

When you say ‘manufacturing’ to people today – most people still think of hard labour and oil-stained clothes, not fighter jets, driverless cars or 3D printing

CBI director-general Carolyn Fairbairn

She says each plan should address three questions.

“First, is the sector strategic for the UK? Second, is the sector currently globally competitive, and if not why not? Does the UK have a competitive advantage? Third, what actions could government and business take to make it more competitive?”

Much of this modernisation would be achieved through the development of digital trends in particular, Fairbairn suggests.

“Manufacturing is evolving...in the years to come, as digital technologies increasingly define what we make and do, I think we’ll see more creative and technology companies doing things which could be classed as ‘manufacturing’,” says Fairbairn.

“But on digital, less than half of manufacturers agreed that adopting digital technologies would boost job creation. Without vision, British firms risk being behind in the digital revolution,” she adds.

She also says industry and government must focus on building skills in the sector, managing energy costs, and encouraging more R&D investment.

Skills

Fairbairn says there is an outdated perception of what a career in manufacturing is actually like.

“When you say ‘manufacturing’ to people today – most people still think of hard labour and oil-stained clothes, not fighter jets, driverless cars or 3D printing,” she says.

“We need to offer young people a true picture of 21st century manufacturing. The Careers and Enterprise Company is helping to do this with Enterprise Advisers – business volunteers – who are heading out into schools and colleges across the UK.”

However, she says industry must also tackle the “chronic shortage” of physics teachers.

“This is holding back an entire generation of STEM (Science, Technology, Engineering and Maths) skills which manufacturing depends on.” 

Energy

Meanwhile, Fairbairn adds, to tackle energy costs in the short term, foundation industries have received appropriate support for the costs of energy and policies that are making them uncompetitive globally.

“But in the longer term, we need a clear plan from government to help develop new energy sources while keeping industry’s costs under control.”

R&D investment

In terms of research and development, Fairbairn says more investment is vital.

“In 2013/14 Innovate UK’s budget was just 0.03% of GDP. Is that really the best we can do? Numbers so small they round down to zero?” she says.

“Our Catapult network – including the High Value Manufacturing Catapult at Warwick Manufacturing Group – is funded one third by government, one third by universities and one third by business. We’ve already seen how the Catapults have helped firms make the leap from ideas to invoices.

“And raising Government investment will help achieve our long term target of a combined government-business R&D spend of 3% by 2020.”

PMI data

CBI’s call comes after figures taken from the latest Purchasing Managers’ Index reveal manufacturing output in the UK fell for the first time since March 2013.

In response to the data, Lee Hopley, chief economist at the manufacturers’ organisation EEF, said: “Following on from the contraction in output in official data for the first quarter, it will require everything that could go right to come good in the second half of the year if manufacturing is to avoid another year of falling output.”