British industry still lags behind on digitalisation and deployment of robotics despite decades of warnings, said chief economist Dr Seamus Nevin at a media briefing on 5 September – but policies used by leading nations show a route forward, he said.
A recent report by the organisation, Making it Smarter: Global Lessons for Accelerating Automation and Digital Adoption in UK Manufacturing, explores how targeted innovation and digital investment could add £150bn to the UK’s GDP by 2035.
“While this country is home to world-class research, cutting edge tech firms and leading digital tools, the manufacturing sector has been slow relative to other countries to adopt these advanced technologies, compared to our international benchmarks, and that's leading to us falling further and further behind,” Dr Nevin said.
Despite remaining the sixth largest economy and having the 11th largest manufacturing economy in the world, the UK also scores low on the robotic density index, ranking 24th in the world.
“Sluggish adoption of these technologies of the future means that we are falling further behind when it comes to things like productivity and economic growth, and that is a worry for the future, if left unaddressed… our industrial performance continues to lag behind our global peers, from the early stages of automation to today's frontier technologies,” he said.
“While our products are world class and our companies are often world leading… when it comes to things like digitalisation and robotics, we're punching way behind where we should be. We have about 112 industrial robots per 10,000 workers, which is half the EU average and well behind our global peers.”
Those issues have implications far beyond industry, Dr Nevin continued, with negative effects on living standards, wages, job creation and domestic security.
There are “vast” potential benefits for companies that do deploy them, however, including higher productivity, higher revenue per worker, better profitability in the medium to long-term and enhanced agility.
Thankfully, Dr Nevin said, there are opportunities to improve through government support. “We see this as a key area where there needs to be significant improvement, particularly among SMEs, who are the harder-to-reach cohort of the manufacturing sector.”
The recent study looked to other countries around the world for solutions, including Germany, Singapore, South Korea and the US. “By examining their experience and comparisons to the UK, we believe there are significant and valuable lessons that can be learned and applied here to help grow our own economy,” he said.
In Germany, for example, Dr Nevin highlighted the success of the Fraunhofer Institutes, which were founded in 1949. More than 60 years later, the UK modelled its own Catapult network on Fraunhofer’s success. The British network faces issues including uncertainty from short-term funding cycles however, Dr Nevin said.
A key lesson from Germany is to build a more integrated national support infrastructure, Dr Nevin said, and to make research and development partnerships work for small and medium firms.
“[Those] 75 separate institutes, as opposed to the five or six that we have in the UK, shows that there's much more comprehensive coverage, and it's much more accessible, but it also is built around strengthening local industrial-innovation linkages and fostering closer collaboration between these institutes and universities,” he said.
“We have a great many world-leading research institutes and universities in the UK, but we're not aligning them with our industrial producers effectively.”
Other countries also show promising ways of accelerating automation and digitalisation. “Like the UK, Singapore no longer competes in high-volume, low-cost production. Instead, it has built a global leadership in high-value advanced manufacturing,” Dr Nevin said. “The sustained success is no accident. It reflects decades of deliberate state-led industrial strategy that has placed manufacturing at the heart of the country's long term growth and resilience, recognising the spillover benefits that manufacturing can provide.”
That success is partly based on a focus on specific skills needed for industrial strategy success, he said, as well as institutionalising researchers into small and medium-sized firms.
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