The UK faces some major economic and productivity challenges. We’re currently ranked 5th out of the G7 countries for productivity, 85th in the world in terms of macroeconomic environment in the World Economic Forum Global Competitiveness Index and only just make the top 20 for spending on research and development as a proportion of GDP; lower than countries such as the Czech Republic, Austria, USA and Slovenia. We need to make up ground, fast.
The challenge is clear, but how can the UK manufacturing industry help to turn the situation around?
In considering the productivity issue in the UK, we must also take into account the shortage of engineering skills and, of course, the uncertainty from the constant backdrop of Brexit. In addition, many companies have yet to invest in adopting new and innovative digital technologies or replacing ageing equipment and assets. These factors create additional pressure, preventing industry from realising the necessary efficiencies and holding back potential economic growth.
The UK manufacturing sector is in a prime position to revolutionise itself. Today, with the spotlight firmly placed on innovation and change, UK manufacturing has a unique opportunity to explore new ways of working, update its image and ultimately improve its global attractiveness and competitiveness.
Balancing technology and human capital
Technology will play a crucial role in the future of the sector and will need to be at the forefront of driving process improvement and efficiency in core productivity. However, in scaling operations, perhaps one of the biggest challenges for manufacturing lies in the skills gap.
To truly address these issues and remain competitive, the sector will need to tackle the productivity challenge through the lens of the ‘employee journey’ and hand in hand with the implementation of digital solutions. Therefore, here are three key aspects that need to be considered by employers within the manufacturing sector:
- Location: Well-located facilities with good connectivity to public transport or amenities play a vital role in the health and wellbeing of people, promoting a healthier lifestyle and, as a result, making them more efficient.
- The right conditions: Companies need to create inspirational work environments to motivate their workforce. Key to this includes investing in and introducing new technology across all aspects of the facility, updating equipment and physical assets, as well as providing regular maintenance and training for employees. This will ultimately improve the working environment, help the sector to stay competitive in an innovative market and attract the brightest talent.
- Use of data: Once manufacturing facilities incorporate the above points, then they must build smart technologies into their core. This is the greatest area of opportunity. However, this needs to be more than simply collecting data. The manufacturing sector will need to go beyond this, with analytical assessments of the data that’s been captured to establish important patterns, trends and the impact of other external factors. This will allow for the continuous reviewing and improving of processes as the sector moves towards greater productivity.
Ready for the change?
In spite of its relatively low levels of productivity, the UK has many positive aspects – it scores well for higher education and training, innovation and business sophistication, and it has the strongest artificial intelligence and machine learning market in Europe. This provides the UK with a new and exciting recipe for success, as we can use technology to boost overall efficiency, providing the sector keeps up to date with the pace of change.
Advances in technology and the digital revolution, coupled with Brexit, like any big change in the economic landscape, actually provide a great opportunity for us to look at British productivity. It will be hard to predict where the UK economy is going, however, the productivity challenge must be embraced by thinking long-term and looking at the big picture if the UK is to continue to be a major player in the global manufacturing industry.