So here’s the deal for a post-Brexit Britain hoping to compete in the Fourth Industrial Revolution (4IR) – the private sector will retrain a million workers over the next five years, but the public sector needs to deliver a national plan to promote digital tech across the manufacturing sector.
The reward for such a deal? Around 175,000 new manufacturing jobs and £445 billion over the next decade for the UK’s coffers. That’s according to a 246 page government-commissioned review on industrial digitalisation, published today.
The review was headed up by industry chief Jürgen Maier, the UK and Ireland boss of German engineering giant Siemens, with input from the likes of John Lewis Chairman Sir Charlie Mayfield, Cisco UK & Ireland chairman Phil Smith, CBI Director General Carolyn Fairbairn, IBM UK CEO David Stokes, Accenture UK CEO Oliver Benzecry, GSK’s head of global manufacturing Roger Connor and GKN CEO Nigel Stein. Maier said:
The business and academic community has set out a vision for much greater ambition needed for Britain to be a world leader in the fourth industrial revolution. The good news here is Britain is not starting from nothing. The UK has brilliant knowledge, assets and skills in this space but it is sometimes not as organised as it could be. This combined package of measures will boost UK growth and productivity in manufacturing and provide more exports and increased earning potential, which our economy desperately needs.
The review stakes a claim that the UK has the strongest AI and machine learning market in Europe, with over 200 SMBs in the field, compared to just 81 in Germany and 50 in both the Nordics and France). But it goes on to warn:
Other countries are stealing a march on the UK. There are coherent government strategies in place in most developed countries, for example in Germany (Industrie 4.0), China (Made in China 2025), and the USA (America Makes). So, the UK needs to act quickly if it is to harness the potential of this agenda.
That necessitrates shaking off some bad habits and practices that are limiting the UK’s ability to realise its full potential. Three main themes emerge:
Lack of effective leadership of industrial digitalisation in the UK. The review notes:
There is no cross-sector national leadership providing market-focused strategic vision, direction, and co-ordination, so that the UK can maximise opportunities and set out a clear approach and offer for foreign investors. Without that clear vision and narrative the UK is failing to inspire current and future workers with a vision of how they can secure high-quality jobs in a thriving part of the economy.
Poor levels of adoption, particularly among SMBs. The review warns:
One of the identified causes is an ineffective and confused landscape of business support, with no clear route to access help and ambiguity about what ‘good’ looks like. SMEs, in particular, perceive significant barriers to adoption, such as risks around cybersecurity, and a lack of common standards allowing different technologies to connect.
Under-leveraged innovation assest to support start-ups/scale-ups.
In terms of specific recommendations, the reviews calls for a number of actions, including:
- Roll-out of a National Adoption Programme, owned at a regional level by Local Enterprise Partnerships (LEPs) and delivered by accredited regional partners. Investment would be targeted at strengthening both the capability and capacity of regional advisory services in digital technologies. This would hae the goal of increasing SMB engagement by a factor of 10.
- Create a national digital eco-system to give Small and Medium Businesses (SMB) the ability to use shared spaces to explore digital tech that might be used in their own operations.
- Establish “a modern digital delivery platform providing scalable, relevant, timely and easily ‘digestible’ content for upskilling and reskilling”, aimed at all companies, but particularly SMBs.
- Build out 12 digital innovation hubs where start-ups can work with academia and established tech firms.
- Set up a Made Smarter UK Commission to oversee long terms digital strategy across manufacturing. The commission would be staffed by representatives from industry, academia and the public sector.
- Establish a major national brand campaign, delivered by both government and industry, to increase awareness of how new digital technologies can transform industry and counter negative perceptions around adoption inhibitors, such as the idea that they are too costly or will eliminate jobs.
- Create a network of Digital Research Centres (DRCs) based around five areas – Artificial intelligence, machine learning and data analytics; Additive manufacturing; Robotics and Automation; Virtual reality and augmented reality; The Industrial Internet of Things (IIoT) and connectivity (5G, LPWAN etc.)
So what are the chances of the UK government picking up the recommendations of the report and running with them? Well, we won’t know that until December when a white paper will be published – most likely at the last possible day before Christmas! In the meantime, Business Secretary Greg Clark has isssed a bland holding statement:
The UK manufacturing sector has the potential to be a global leader in the industrial digital technology revolution. Government and industry must work together to seize the opportunities that exist in this sector and promote the benefits of adopting emerging digital technologies, as well as cutting edge business models.
But Carolyn Fairbairn, director general of the Confederation of British Industry, urged the government to take heed of the review’s ideas:
The UK must compete with China, the US and much of Europe where there are already advanced plans to embrace the Fourth Industrial Revolution. I urge the government to consider these plans carefully, as they are focused on increasing productivity and wages, especially in smaller businesses.
It’s well worth a read of the full report (here). This is a comprehensive review with a series of pragmatic recommendations, none of which I can find fault with. Whether ministers will be willing to make the necessary investment to deliver on them, we will have to wait for the White Paper in December to see what promises are made.
But having a viable 4IR plan in place isn’t something that can be outsourced entirely to the private sector to deal with. Government has to play a leadership and enabling role here, particularly as the UK prepares to play in a global market, post-Brexit. To focus ministerial minds, the review warns:
As the UK exits the EU and becomes fully exposed to the competitive pressures of the free market, companies will need to focus on productivity to survive. If businesses are unable to stand on their own two feet they will fail, risking entire factories and industry-related supply chains and services. Therefore, the greatest threat to employment is not automation but an inability to remain competitive.
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