Report

Manufacturing: Securing Scotland’s Future

Our Manufacturing: Securing Scotland’s Future report focuses on the manufacturing sector in Scotland (taking into account the current world economy as well as the challenges of competing) and how well placed it is to compete in a global marketplace.

Manufacturing in Scotland has long been a major contributor to the economy, in terms of output, employment and exports. However, with the emergence of cheaper foreign labour markets, the number of people employed in the Scottish manufacturing sector has halved over the last 25 years. Today, Scotland is unable to compete on the basis of unit manufacturing cost alone.

The current economic crisis exacerbates the challenge for the manufacturing sector. In light of this, we commissioned this report. It offers recommendations to the Scottish Government on strategies to ensure that Scotland’s manufacturing sector adapts. Confident leadership now can position the sector to take advantage of significant future opportunity.

Based on research and interviews with industry stakeholders, in the report we:

• Consider trends within the Scottish manufacturing sector
• Identify strategies for success for a modern manufacturing enterprise
• Outline Scotland’s intrinsic strengths and weaknesses and their perceived importance for future markets
• Make policy recommendations based on the above

Key recommendations

The report makes the following key recommendations:
1. Skills matter – support commercialisation of R&D through the creation of a prototyping Centre of Excellence

Innovation is a high-added-value activity in the product lifecycle that plays to the strengths of Scotland’s universities. A prototyping centre would help commercialise Scotland’s great R&D ideas by developing knowledge of product performance and adapting designs for manufacture. It is envisaged that the centre would be a collaboration of existing facilities. The Scottish government’s role would be both facilitative (selling the concept locally and on the global stage) and financial (to share some of the one-off costs associated with prototypes).

2. Skills matter – create a route map for national infrastructure investment to create a stable demand for skills

One of Scotland’s strengths is the quality of the engineering workforce. This must be maintained. However, future demand for these skills is hard to predict and companies are reluctant to invest in recruitment and training. There is a danger that Scotland may not have the skills to service future opportunities such as the development and deployment of low-carbon energy technologies. The Scottish government can help create a stable, growing demand for skills by preparing a route map of national infrastructure investment. This will ensure continuity of market pull for engineering talent and ensure Scotland has the skills to play its role in engineering the future.

3. Size matters – work with Westminster to build a carbon capture and storage (CCS) demonstrator in Scotland

The skills and resources for carbon capture and storage are resident in Scotland today. However, the size of a CCS demonstrator project is large and should be pursued as a UK project. The Scottish government should work closely with Westminster to build a CCS demonstrator on the east coast of Scotland.

4. Risk matters – encourage competitive in-service support of the emerging renewables sector by funding a reliability data centre

The use of engineering knowledge to manage the risks of asset ownership is a source of competitive advantage. In particular, understanding the reliability of the emerging renewable technologies such as wind, wave and tidal allows competitive in-service support to be offered. The Scottish government should sponsor the formation of a renewables reliability data centre to allow Scottish companies to offer global in-service support to renewable asset owners.

 

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