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Western Europe / UK

Opinion: UK manufacturing’s £53m injection is a promising start

The UK manufacturing sector is still struggling with Brexit and Covid-19, making the government's £53m injection a welcome move. More is needed, however.

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UK manufacturing has endured a bumpy ride since the Brexit vote, but the government’s injection into the sector offers a glimmer of hope. (Photo by Paul Ellis/AFP via Getty Images)

If the UK government had a favourite child, it would certainly not be the country’s manufacturing sector. In fact, manufacturing could be characterised as the forgotten, overlooked middle child of its economic market. The sector has a long history of neglect, suffering from ‘window dressing’ industrial policies that are quickly dropped, less than favourable trading conditions, mishandlings by politicians with only an eye on the short term and a long-ignored skills gap. All of this has contributed to a long-term decline in UK manufacturing.

Those who follow the UK’s manufacturing sector closely could be forgiven for rolling their eyes at the announcement in late July of a £53m ($73.78m) injection into the sector through the Made Smarter programme. Manufacturers and supply chain workers have become well versed in having the rug pulled out from under them.

Perhaps this is too cynical a viewpoint, although any mistrust of the UK government from the manufacturing sector is understandable given the lack of direction or leadership it has been offered since the 2016 Brexit referendum.

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The injection could be viewed as a case of ‘better late than never’, however, given that it is intended to increase productivity in supply chains by using digital technologies such as machine learning, blockchain and digital twins.

Research centres popping up in UK universities

Approximately £25m of the funding will be used to create five new industry-sponsored research centres in UK universities.

The research centre for smart, collaborative industrial robotics aims to eliminate barriers to adopting robotics and accelerate their widespread use in manufacturing. It will be based in Loughborough, Strathclyde, Cranfield, Bristol and Warwick Universities.

The many impacts of the Covid-19 pandemic have also been taken into consideration with the creation of a research centre for connected factories, which will be based in universities in Nottingham, Cambridge and Sheffield. These facilities will look to create a ‘morphing factory’ where production can be easily repurposed to meet changing market demands.

In a similar vein, the digital medicines manufacturing research centre will be designed to create digital supply chains that enhance medical and medicinal resources to meet demand and to enable clinical trials to become more flexible.

The people-led digitalisation programme based in universities in Bath, Nottingham and Loughborough will target productivity by expanding awareness of digital solutions across manufacturers.

Lastly, the Materials made Smarter Research Centre, which will be based in Strathclyde, Cambridge and Loughborough universities, will support the adoption of advanced technologies and new materials, and will have sustainability at its heart.

Wanted: students, skills and sustainability

This move to create research centres within universities is a promising one, particularly when the skills gap that plagues UK manufacturing is taken into consideration. The centres will hopefully create an awareness of what a career in British manufacturing actually looks like: varied, skilled, awash with opportunity. It could also help to rid the sector of its outdated image of smoke-filled factories with grimy floors.

While the decline in British manufacturing is often lamented, it should be remembered that the sector accounted for 17.83% of the UK’s GDP in 2020, according to Statista, in spite of the havoc wreaked on it by Covid-19 and Brexit. On top of this, the forecasted recovery for gross value-added (GVA) in UK manufacturing looks promising, with a steady increase expected up until 2026.

It is an incredibly resilient sector with a passionate workforce and a legacy implanted into many of the country’s cities and towns.

One such city that demonstrates this resilience is Sunderland, with its Nissan factory. The factory shouldered weighty concerns for its future in the wake of Brexit, but has recently been churning out ‘good news stories’.

Nissan has recently announced plans for its factory to become the largest electric vehicle plant outside of Japan. The factory will support the production of roughly 100,000 battery cars every year on top of creating approximately 6,200 new jobs. Furthermore, Nissan has committed to producing a new electric model in Sunderland with an investment of up to £423m expected.

Let the investment continue…

Some £18m of the £53m injection has also been awarded to 37 projects that aim to enhance innovation and strengthen sustainable supply chains. Bolstering various projects such as PragmatIC’s Sort-It project (which will use technology and automation to recycle packaging waste) and Perpetual Labs' digital model (which aims to create one standard language across supply chains to make information more accessible) is a smart move from the UK government.

Many of these companies and innovations have felt as though they are pushing a boulder uphill trying to gain traction for their innovations, so this lift from the government is a much-needed breath of fresh air for many.

This £53m investment is certainly a step in the right direction. It is a long-awaited indication that the UK government understands that meaningful investment is required in order for the country's manufacturing sector to stay globally relevant. This move is particularly salient given the uncertainty that UK manufacturing has endured in the past five post-Brexit years. Long may the spotlight shine on UK manufacturing.

Ruth Strachan

Ruth Strachan

Senior reporter

Ruth Strachan is a senior reporter at Investment Monitor, focusing on manufacturing, mining and commodities.