Tuesday, 02 September 2014
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Manufacturing a recovery

With the UK economy flatlining and warnings about profits, credit ratings and unemployment a weekly if not daily occurrence, it’s hard to argue that the government’s growth strategy is working.

Widespread public sector cuts, the rise in VAT and a failure to get banks lending again are all contributing to companies’ reluctance and inability to invest in their business and create jobs.

But, while it may not be of much comfort to those desperately seeking work or trying to keep their business afloat today, the coalition’s long-term plans for reinvigorating UK manufacturing are taking shape in a promising form.

Among the cuts of last autumn’s comprehensive spending review, the government allocated £200m to establish a series of Technology and Innovation Centres (TIC) – the first of which was launched this week to support high-value manufacturing – to help Britain commercialise its world-class scientific research.

Last week, George Osborne found a further £50m to support the development of graphene from a Nobel Prize-winning discovery made in Britain to a cutting-edge technology that boosts the UK economy.

And today the Department for Business, Innovation and Skills (BIS) announced a revamped Manufacturing Advisory Service (MAS) that it claims will focus on supporting SMEs’ advanced manufacturing capabilities to create £1.5bn in economic growth and 23,000 jobs, and safeguard a further 50,000 jobs.

These figures ­– based on the experience of four successful firms applied to the whole manufacturing sector – may be dubious, but there’s a sense that the government is serious about practical ways of seeding a slow but long-lasting rebalancing of the economy.

The TICs, overseen by the Technology Strategy Board, are a major part of this strategy and the high-value manufacturing centre holds particular promise. Incorporating seven existing university research departments under one management structure, it aims to help SMEs develop new manufacturing processes without the financial and technical risk this usually involves and that can inhibit smaller companies from expanding or commercialising their ideas.

Dick Elsy, chief executive of automotive technology firm Torotrak, which has received TSB funding, is a firm supporter of the idea and thinks it could prevent UK firms from taking their manufacturing facilities abroad.

British investors and larger companies are too risk-averse to developing innovation, he argues, and Torotrak moved its manufacturing abroad not because of lower labour costs but because the company had to find foreign partners to expand.

‘The opportunity to pool resources to access manufacturing technologies to try and bridge this gap between prototype and derisking the manufacturing process, would be a fantastic enabler in the UK. If these had existed five or 10 years ago it could have led to a lot more added value and my business being in the UK.’

Similar TICs for cell therapy and offshore renewable energy are due to open next year and a further three will be chosen from a selection of areas including space, sensors, digital media and future cities.

These will build on the already substantial work by the TSB over the last four years to aid companies with good ideas that needed a financial boost. We’re not yet far enough along to judge how successful the organisation really is at turning research into market-leading products and creating jobs and wealth in the process. But the signs are positive, with numerous companies on the cusp of bringing impressively innovative products to market.

It would be great if the government’s strategy produced a manufacturing equivalent of the MP3, the data format that has revolutionised the music industry and that still generates millions of Euros in revenue for the German Fraunhofer Institutes where it was developed.

But more fundamentally, it needs to create an environment where no one says that Britain is good at inventing things but not at commercialising them. If this massive obstacle can be overcome, it could become this government’s most lasting and celebrated legacy.


Readers' comments (10)

  • "The opportunity to pool resources to access manufacturing technologies to try and bridge this gap between prototype and derisking the manufacturing process, would be a fantastic enabler in the UK. If these had existed five or 10 years ago it could have led to a lot more added value and my business being in the UK.’"

    IMO the manufacturing risk for volume production will always be present due to the IVT disc and rollers failing with this design, IMO this is down to the fundamental design and shown with updated patents over the last decade.

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  • It's not just British companies that have declined to take the risk on Mr Elsy's company's technology, the list includes the USA, Germany, Japan and Italy.

    The TSB seem happy to publicise their competitions, but never seem to publish any hard results.

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  • That's because it's only four years old and the companies that benefited from its first competitions are only just coming to market. Hence why it's too early to really judge.

  • With all of these acronyms, I'm supprised we can actually produce anything....
    LMAO

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  • The Engineer is in complete agreement. Several acronyms were actually removed during the making of this article.

  • This is a positive article and I agree I think something fundamentally good for the future is being done. So often I read about great British innovation on this web site and I aways comment that the vital step is to commercialise it in such a way that it can be manufactured here in the UK. I sincerly hope that this and any future government continue to recognise this is the key to our long term prosperity.

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  • The Technology Strategy Board published the results of the impact of its major mechanisms, the collaborative R&D scheme, in September this year http://www.innovateuk.org/content/news/evaluation-of-collaborative-rd-published.ashx. For instance, The gross value added (GVA) to the economy generated by the projects was estimated at £6.71 per £1 of government funding for the whole programme.

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  • 200+50 million. Is that enough, I mean that's the same amount Pickles just found in his office drawer and gave away to the LAs to empty selected peoples bins more often, a complete waste of money.

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  • I am a retired professional and doing research in IIT Madras,India on supply chain Management at the moment .My advise to British Industries - Retain innovative products( so unique in the world) within UK and outsource all functional products to low cost countries with local collaboration.I remember what a great philosopher said - I pray to god to give me the serenity to accept the things I cannot change ,courage to change what I can and the wisdom to know the difference between the two .How true it is even today ?And that is where success lies!
    I still remember the revolutionary projects going on at WMG 4-5 years back but when will these see the light of the day?

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  • TIC's, Dept of BIS, MAS ..... ???
    Why can’t the government just identify where the country imports the highest value and volume of manufactured goods and re commence the same manufacture in the UK using modern equipment? As an industrial strategy, it employs people, reduces social support, and recycles expenditure around the UK economy instead of exporting our real wealth as currency. A tried and proven strategy, termed KISS ........ Keep It Simple Stupid..........

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  • The marketplace has gone global and 90% of sourcing is conducted on the internet. Companies like MFG.com have revolutionized the process by enabling engineers and sourcing specialist "The opportunity to pool resources to access manufacturing technologies to try and bridge this gap between prototype and derisking the manufacturing process."

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  • I have worked in manufacturing and research for 36 years and have been involved in advance manufacturing and innovative manufacturing and have seen outsourcing applied and ultimately fail to save money and cause companies to fail.

    Internal cost inflation is lower that at external subcontractors because external subcontractors are continuously trying to improve their price to generate more income and profit for them – More importantly all internal improvements will combine to improve quality, reduce internal manufacturing costs and/or flexibility to improve competivity and reduce internal manufacturing cost inflation whilst cost reductions at subcontractors are retained to increase profits and cost rises passed on to the customer.. For example, some time ago I was asked to price up underbase (machine bed) fabrications that had been subcontracted 10 years previously - The design hadn't changed in that time so that pricing them up was just a case of going to the archive planning’s and adding up the traveller times for each cost centre on the archive planning’s and multiplying through by the then current cost rates to get the labour cost to which I added the B.O.M. cost obtained from stockholders. The internal cost established was considerably cheaper (circa 20% to 25%) than the sub contractor of 10 years because internal cost inflation was considerably less that at the sub contractor. MORE IMPORTANTLY, the new manufacturing technology and welding processes installed in our Fabrication Department meant additional costs savings could be made implementing the new methods and processes that had been installed in the shops since the underbase fabrications had been outsourced.

    Companies like Rolls Royce succeed as they develop the manufacturing technology they need for ‘better, quicker and cheaper’ in order to minimise costs to remain competitive and develop the processes needed to manufacture components in new advanced materials that are needed for new products and product improvements but which cannot be processed with existing processes.

    Companies fail because they lose the ability to design for manufacture at minimum cost or redesign to make use of the latest innovative and advanced manufacturing technology to improve their products and reduce their costs.

    Larger companies that are forward looking like Rolls Royce do this and both have the funds to so and have the people able to get the money out of the UK government and the European Union to fund their development programs with tax payers money. They also have the people liaising with and collaborating with University teams specialising in innovative and advanced manufacturing for maximum benefit to them.

    SME’s don’t have the resources in either people or money terms to develop new technologies or to even effectively identify beneficial technologies available for inwards Technology Transfer.
    Anything that the government does to help match available technologies to SME’s that would benefit from them as well as helping with the technology transfer and fund implementation would help those SME’s maximise their markets and ability to grow and generate both new jobs and taxes for UK plc to thrive.

    The UK already has an excellent set of university Innovative Manufacturing Research Centres but they look towards large companies and they are easier to contact and more likely to add funding but are not good involving SME’s.

    SME’s seldom have the Engineering Professionals needed so part of the solution has to be groupings of experienced professionals used to working at the ‘cutting edge’ of technology in manufacturing visiting SME’s and advising on what can be done better, help with inward technology transfer and help identifying the government grants needed to implements the technology transferred in as well as develop any new technology needed.

    At the end of the day UK plc has to utilise innovative and advanced manufacturing technology wherever beneficial for product improvements to gain a technical lead and/or competitive lead over our competitors to generate the jobs, wealth and prosperity UK plc needs in the UK instead of exporting jobs and prosperity and importing unemployment and despair for the people left unemployed. Every job lost to the UK is someone unemployed meaning they are economically inactive as against generating wealth and taxes for UK plc.

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