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Despite digitalisation, why is the manufacturing industry due a revival?

Concerns over the Brexit deal and the US trade import tariffs have led to increased scrutiny of the health of the manufacturing sector.
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The outlook for the European manufacturing sector at the moment does not inspire, with the UK in particular at risk of “decelerating”, according to the Purchasing Manager’s Index (PMI) from IHS Markit.

Perhaps the benchmark needs updating, but manufacturing productivity is still seen as a key indicator to the UK and the West’s economic revival.

The report revealed that the sector’s performance had fallen to a two-year low, and indicated that it would likely contribute little to the country’s overall economy in the latter half of 2018.

Given the country’s industrial heritage, it’s not surprising that the UK remains among the world’s ten biggest manufacturing nations. It is currently in the midst of a digital revolution, in which new business models are being built around customer demand, production speed, and enhanced software programming.

Advanced manufacturing technologies such as CNC machining, injection moulding and 3D printing are streamlining efficiencies, lowering costs, and improving time to market. Despite all of this, however, the sector is undeniably experiencing challenges – and these must be addressed.

Filling the gap

Manufacturing in the UK is clearly overdue a renaissance, but a number of factors must first be overcome if we are to achieve this.

For one, the industry faces a significant skills gap. Although it employs around 5.6 million people, the Engineering UK 2018: The State of Engineering report indicates that a further 59,000 engineering graduates and technicians are required each year to fill core engineering roles.

According to the report, a total of 203,000 sufficiently qualified employees are needed per year just to meet the demands of new and emerging technologies.

A separate report from PwC revealed only a third of manufacturing firms believe employees have the qualifications necessary to compete in a digital future. Unfortunately, though, if the results of a US study from 2016 are to be believed, the majority of young people don’t consider manufacturing to be a high-tech career choice.

This perception is shared by UK counterparts, with a quarter of the respondents to our own recent survey stating they still associate manufacturing with terms such as “manual labour” and “assembly lines”.

It’s crucial, therefore, that steps are taken to dispel outdated misconceptions to ensure the next generation have the support from both industry and government, to build on this foundation of engineering and manufacturing and realise a fulfilling and exciting career in the industry.

Education and investment

The German manufacturing industry, whose heritage rivals that of the UK, enjoys considerable pro-active support from its country’s government. In the UK, the focus has shifted away from products to more of a service economy and, as a result, the manufacturing sector enjoys comparatively less government support.

A government-led education scheme, for example, would prove valuable in educating, enticing and enabling new talent to find a career in the industry, and would go a long way to closing the skills gap.

Greater access to investment capital is required too. The sector is driven by entrepreneurial individuals in partnership with highly-skilled engineers. However, should one of these individuals look to set up a new manufacturing company in the UK, they may find it hard to find sufficient financial backing.

The majority of investment in this country currently goes into property speculation and technology startups, with manufacturing often seen as a legacy industry despite its move toward digitalisation.

Without a British backer, the entrepreneur may then sell their idea to China or India, and export their product back to the UK at a later date.

Regional investment is also required to ensure that smaller, local infrastructure needs are met. Adequate roads and railway connections are important to allow manufacturers to meet customer demands for rapidly delivered products.

Public sector and larger businesses in a particular region should play their part in enabling the sector to grow in their areas, by being prepared to support or guarantee investment and loans into developing new and growing local manufacturing companies.

For the manufacturing industry to re-assert its standing, and start to increase its contribution to the wider economy, it will require greater support from the government, both at national and local levels.

With greater investment and education, we will be better able to encourage innovation and attract the talented workforce needed to help the industry capitalise on the opportunities afforded by the latest digital revolution.

Stephen Dyson is special operations manager at Protolabs.

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