UK manufacturers are calling for a formal debate on the UK’s membership of the EU, together with coherent government policies addressing the cost of energy, skills shortages and investment in research and development, according to a new report released this week by global law firm Squire Patton Boggs. The report gauges levels of confidence within the manufacturing sector and what businesses want to see from the government during the next 12 months to sustain growth.
Key findings
- 83% of respondents want to see the UK remain part of the EU
- 60% cited the skills gap as the most significant issue for them
- 96% think there should be a greater focus on STEM subjects (Science, Technology, Engineering and Maths) in schools and colleges
- 58% do not think there is enough support for research and development (R&D)
- 55% believe new technology and digital intelligence are likely to have greatest impact on future growth
Top of the agenda was membership of the EU, with manufacturers expressing concern that the UK’s exit from the EU would halt growth and damage the sector. Many manufacturers believe there is a need for a strategy to enable them to collaborate and voice these concerns to the government.
Squire Patton Boggs’ manufacturing partner, Rob Elvin, says: “As a nation, we’re in limbo at the moment as we wait for the referendum to take place and this is undoubtedly affecting overseas investment flowing into Britain.”
Manufacturers are concerned that negative issues surrounding EU membership will be whipped up by those with a vested interest or agenda in the months before the referendum, and consequently the right questions will not be addressed. Elvin says: “There is a real fear that the electorate will not have been provided with sufficient information to allow them to make an informed decision.”
Furthermore, a break from Europe is likely to lead to a greater widening of the skills gap. Elvin comments: “Our report highlights how much of an issue the skills gap has become for manufacturers; whilst the UK is working hard to develop the STEM agenda, manufacturers are still reliant on Europe to fill their skill requirements. Free movement of people is essential to support growth in what is still a fragile sector in the UK.”
Meanwhile, many manufacturers are calling for a root-and-branch review of educational policy to ensure schools can teach future generations that a career in the manufacturing sector is one that should be aspired to. “Some of the very good ideas from the coalition government – like the creation of the National College for Advanced Manufacturing – appear to have been put on ice, and it would be a boost to the sector if the new government could support the previously announced initiatives,” Elvin says.
He adds that politicians need to find common ground on a coherent energy policy that will meet the future needs of “UK Plc”.
“For years, there have been calls on successive governments to create a coherent energy policy, and this – combined with escalating energy costs – is a source of major concern to many manufacturers. There needs to be an energy policy that has cross-party agreement so that it won’t falter if there’s a change of government in the future.”
The future for manufacturing according to respondents to the survey lies in research and development and investment in innovation. “While there is awareness about the various funds available to support R&D and investment, many manufacturers shy away from applying for them because of the sheer amount of box ticking required to access them,” comments Elvin. “Consequently the whole process of applying for grants needs to be streamlined and simplified and better promotion of the wide range of external help that is available to business is equally important too.”
When it comes to achieving growth, embracing technological innovations – such as smart and highly connected factories, 3D printing/additive manufacturing and digital manufacturing, robotics and use of drones and next-generation power sources to name but a few – remains of fundamental importance according to survey respondents.
“Now is the time for manufacturers to ensure that they’ve looked seriously at how they can prepare their factories for tomorrow to harness emerging intelligent and connected technologies, as well as innovations which have the internet at their heart,” says Elvin.
The report makes the following recommendations:
- EU Referendum: The government must lead a coherent and informed debate about the UK’s future in the EU.
- Energy: The cost of energy in the UK is on average, about 35% more expensive than the rest of Europe. We back the EEF view that the government needs to commit to keep UK energy costs at, or below, the EU average
- Skills: Positive government policy around the STEM agenda and increased collaboration between manufacturers and education to build the brand of manufacturing as a sector offering interesting and challenging careers.
- Government support for R&D: Manufacturers need to work more closely with government to focus on creating a long term strategic plan to drive the sector forward.
‘Manufacturing 2015’ has been produced by Squire Patton Boggs in partnership with TheBusinessDesk.com. To download the North West Report click here, the West Midlands Report click here and the Yorkshire Report click here.