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The Future of Manufacturing: a New Era of Opportunity and Challenge for the Uk

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The Future of Manufacturing: a New Era of Opportunity and Challenge for the Uk THE FUTURE OF MANUFACTURING: A NEW ERA OF OPPORTUNITY AND CHALLENGE FOR THE UK PROJECT REPORT THIS REPORT SHOULD BE CITED AS: Foresight (2013). The Future of Manufacturing: A new era of opportunity and challenge for the UK Project Report The Government Office for Science, London For further information about the Project please visit: http://www.bis.gov.uk/foresight THE FUTURE OF MANUFACTURING: A NEW ERA OF OPPORTUNITY anD CHALLenGE FOR THE UK PROJECT REPORT THIS REPORT IS INTENDED FOR: Policy-makers, legislators, a wide range of business people, and the professionals and researchers whose interests relate to the manufacturing sector. This Report focuses on manufacturing as a whole with a particular emphasis on the United Kingdom. The Government Office for Science would like to thank the Project’s Lead Expert Group who oversaw the technical aspects of the Project and were particularly involved in writing this Final Report. They were led by Sir Richard Lapthorne, and are Professor Nicholas Crafts, Professor Steve Evans, Professor Anne Green, Professor Richard Harris, Professor Alan Hughes, Professor Chris Lowe, Dr Hamid Mughal, and Professor Sir Michael Sterling. Particular thanks are also due to the Project’s High Level Stakeholder Group which was chaired by the Rt. Hon. Vince Cable MP (the Secretary of State for Business, Innovation and Skills) and the many officials, experts and stakeholders from the UK and around the world who contributed to the work of this Project, who reviewed the many Project reports and papers, and who generously provided advice and guidance. The Foresight project team was led by Paul McCaffrey and also included Michael Andrea, Tomasz Ciuksza, Emily Eakins, Derek Flynn, Sejal Mahida, Lucy Martin, Chris Miles, Moh Shabier, Professor Sandy Thomas and Emma Tredgett. The Foresight Programme in the UK Government Office for Science is under the direction of the Chief Scientific Adviser to HM Government. Foresight strengthens strategic policy-making in Government by embedding a futures approach. The contents of this Report do not represent the views or policy of the UK or any other government. 6 A NEW VISION FOR UK MANUFACTURING Manufacturing in 2050 will look very different from greater opportunities will be balanced by greater today, and will be virtually unrecognisable from that competition. The UK needs to radically change its of 30 years ago. Successful firms will be capable approach to providing a constant and consistent of rapidly adapting their physical and intellectual framework within which all firms aspire to prosper. infrastructures to exploit changes in technology as manufacturing becomes faster, more responsive to A business-as-usual approach will not deliver that changing global markets and closer to customers. outcome. Other economies are already ahead, and catching up will require an adaptive capacity that Successful firms will also harness a wider skills base, the UK has not yet demonstrated. Achieving this with highly qualified leaders and managers whose is essential, as the future competitiveness and health expertise combines both commercial and technical of UK manufacturing will affect many other parts acumen, typically in science, technology, engineering of the economy through its numerous linkages. or mathematics. The key message is that there is no easy or immediate Constant adaptability will pervade all aspects of route to success, but action needs to start now manufacturing, from research and development to build on existing support, and to refocus and to innovation, production processes, supplier and rebalance it for the future. Above all, policy design customer interdependencies, and lifetime product will need to address entire system effects. This maintenance and repair. Products and processes will Report sets out many areas where action is needed be sustainable, with built-in reuse, remanufacturing at both strategic and more detailed levels. However, and recycling for products reaching the end of their the following should be particular priorities. useful lives. Closed loop systems will be used to eliminate energy and water waste and to recycle The quality and skills of the workforce will be a physical waste. critical factor in capturing competitive advantage. It is essential that UK policy makers focus on the These developments will further emphasise the key supply of skilled workers, including apprenticeship role of physical production in unlocking innovative schemes, support for researchers, and the supply new revenue streams, particularly as firms embrace of skilled managers. Firms will need to pay much ‘servitisation’ and manufacturers make use of the more attention to building multidisciplinary teams increasing pervasiveness of ‘Big Data’ to enhance to develop increasingly complex products, and also their competitiveness. innovative business models. In the public sector, policy frameworks that affect It will also be crucial to address the current image the manufacturing sector directly and indirectly will associated with manufacturing. Here government need to recognise the extended nature of value and industry should work together to further creation and the new ways it is being developed. promote and market the opportunities for careers Public planning cycles should match the timescales in manufacturing industries at all levels of education. of firms’ own long term planning requirements. And it will be important that flows of highly skilled Financial challenges for the sector include a shortage workers, patient capital, and support to promote of risk capital. This is particularly evident as a funding critical mass in small and medium sized enterprises gap between research and early development and the are all internationally competitive. funding for proof of concept that is usually required before the market steps in. There is also a shortage The implications for UK manufacturing firms and the of funding for applied research and development in UK Government are substantial. Some businesses are some areas such as the development of advanced already adapting and are world class, but many are green energy sources. So although there are excellent not positioned to succeed in a future world where schemes for public support such as Knowledge The future of manufacturing: A new era of opportunity and challenge for the UK 7 Transfer Partnerships, funding of the Technology In summary, manufacturing is too important to Strategy Board, and public private partnerships such leave to its own devices. The Lead Expert Group as the Energy Technologies Institute, these are much for this project, comprising Academic and Industry smaller than in competitor nations. Addressing this leaders commend this Report to Government, mismatch should be a priority. together with its associated analysis and evidence underpinning its conclusions. Recent years have seen a resurgence in the development of industrial policies by governments in the UK and overseas. In the UK, industrial policies have been developed in 11 sectors, led in most cases by groups from the public and private sectors, with many of these encompassing manufacturing industries. One specific development has been the creation of the Catapult Centres. In particular, the High Value Manufacturing Catapult provides a strong base on which to build substantial further effort. It is recommended that its funding is substantially increased, and used in part to encourage the greater involvement of smaller firms in particular. Whilst specific initiatives are essential in areas mentioned above, more is needed. Recognition Sir Richard Lapthorne that the UK’s national infrastructure suffered from Chair, Project Lead Expert Group fragmented policy making led to the creation of Infrastructure UK (IUK). Manufacturing suffers from similar challenges and is no less strategic for the future strength and resilience of the UK economy. The Lead Expert Group of this Foresight Project considers that a similar office to the IUK is needed for Manufacturing. This would be responsible for helping Government to formulate long-term policies that would take into account the extended value chain associated with manufacturing industries. It should be staffed by experts, preferably with substantial successful industry experience. They would consider all of the issues highlighted in this Report, and develop and assist Government with piloting new policies. A UK Office for Manufacturing would need to work closely with IUK, in view of the importance of infrastructure to manufacturing. Sir Mark Walport It would also need to work closely with industry, Government Chief Scientific Adviser particularly to improve skills and increase the ability of companies to innovate by working with relevant partners. Other countries including the United States and Australia have developed relevant offices from which the UK can learn. 8 PREFACE It is surely unique in Europe, if not globally, for There are many UK manufacturing firms that a Government to commission a strategic look at are world class. Indeed, manufacturing leads the future of manufacturing as far ahead as 2050. other sectors in many areas, including productivity, exports and research and development. There This report – involving some 300 leading is no room for complacency, however. business people, experts and policy makers from 25 countries – sets out a vision of manufacturing that The analysis and advice contained in this report is very different to what we recognise today. Clearly, will help Government to take its support
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