Investment strike crippling UK manufacturing

UK manufacturing’s decline will hasten if the government’s innovation review does not provide more public money for research and development, manufacturing union Amicus warned today.

The union has also said that the government’s promised review of UK procurement policy will need to examine how government spending can stimulate levels of research and development in UK’s struggling manufacturing industry sectors.

On the eve of the CBI conference, Amicus is highlighting that UK manufacturing has far lower levels of investment per worker that manufacturing in the US, Germany and France, yet all the evidence shows that investing more in research and development directly contributes to industry growth.

Amicus is campaigning for a clear policy to stimulate innovation and research and development in all UK manufacturing sectors following the Defence Industrial policy model, which is designed to prioritise UK defence suppliers through public procurement.

Derek Simpson, General Secretary of Amicus, said: ‘Without initiatives specifically designed to stimulate innovation and growth in the workplace, UK manufacturing will simply not be able to compete.

‘The government’s innovation review must be geared to achieving greater spending in research and development and developing the UK as a world-class hi-tech manufacturing base. Without it UK manufacturing will not survive.’

Since 1993, the UK has experienced a greater drop in expenditure on manufacturing research and development than any other G7 nation. According to government figures, UK business research and development, at 1.3% of GDP, lags well behind Germany at 1.6% and the US at 2.2%* and UK manufacturing output has fallen dramatically over the same period. Government financed research and development in UK business as a whole has also fallen dramatically, from 30% of total business research and development expenditure in 1981 to 12% in 1998.

Although it’s not possible to form a direct link between investment in research and development and productivity, Amicus say it cannot be a complete coincidence that the US invests nearly double the amount in R&D and have 55% higher levels if productivity.

Official statistics released last week revealed the number of UK manufacturing jobs fell by 121,000 to 3.48 million in the quarter to September. Last week the CBI predicted a further 36,000 manufacturing jobs will be lost over the next three months.

The DTI’s innovation review is currently taking place. The government’s findings are due to be published in early December.

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