Jason Ford, news editor
Most people agree that increased productivity is a good thing and last week the chancellor Philip Hammond underlined the Tories’ commitment to boosting output in his Autumn Statement.
The announcement of a £23bn National Productivity Investment Fund – to be spent on innovation and infrastructure over the next five years – was generally well received and by the following day Hammond and his boss Theresa May were in Gloucestershire for a tour of Renishaw’s main research and development facilities.
Commenting on the visit, Sir David McMurtry, Renishaw’s chairman and chief executive, said: “In his Autumn Statement the chancellor spoke of his ambition to achieve a high wage, high skills economy, and we fundamentally believe that to create wealth for our company and the nation requires innovation in the generation of new technologies, and as importantly, innovative manufacturing that enables those technologies to be produced profitably in the UK.”
In last year’s Autumn Statement Hammond’s predecessor George Osborne reiterated the economic benefits that can be brought about by backing science. He set out ambitions for the UK to be the wealthiest major economy by 2030, supported by a 15 point productivity plan that included long-term investments in business by cutting corporation tax and fixing the Annual Investment Allowance at £200,000; investing in skills by introducing an apprenticeship levy; and investing in the Northern Powerhouse and supporting infrastructure.
However, whilst many manufacturers recognise the importance of improving productivity (59 per cent according to a recent report from Lloyds Banking Group and the Manufacturing Technologies Association), only 28 per cent believe it is a problem for their own businesses.
Over 1,500 companies took part in the survey, which found investment in production machinery (44 per cent), skills and training (37 per cent), automation (30 per cent) and robotics (12 per cent) as drivers for productivity.
Of those cutting back investment, 15 per cent feel there is a lack of available skilled labour, an issue reflected in two of the largely positive comments received by The Engineer immediately after the Autumn Statement.
“Government wants home-grown talent to deliver Research & Development, driverless cars and new energy infrastructure, but we just don’t have the sufficient engineers to deliver this,” Dr Colin Brown, engineering director, IMechE. “Government must face facts and outline a clear strategy to ensure the UK has the skills it needs for the economy to thrive.”
Kit Cox, CEO of Enate, said: “Hearing the government’s desire to foster, develop and keep innovation here is welcome, but the government will only be considered visionary when it instigates a radical education overhaul as, right now, we don’t have enough people with the skills to deliver.”
A new report published today by Albion Ventures has found that 50 per cent of small businesses with over five employees are planning to grow their headcount over the next two years, but finding skilled staff remains challenging.
Per sector, manufacturing SMEs reported the highest level of concern about finding skilled staff, followed by the technology and telecoms sector and construction businesses.
According to Albion Ventures, this is the first time that SMEs have identified a shortage of skilled staff as the biggest obstacle to growth, ahead of red tape and regulation ranked in second and third places in 2016.
Political uncertainty and leaving the EU were ranked in fourth and sixth place respectively.
Patrick Reeve, managing partner at Albion Ventures said: “Policymakers charged with deciding our post-Brexit future must recognise that many of the skills that enable us to compete in a fast-changing and increasingly competitive world are in short supply and our best chance of overcoming this challenge is by building on the UK’s first class reputation as a home for global talent.”
The fourth Albion Growth Report is based on interviews with 1,000 SMEs and highlights factors that create and impede growth in post-Brexit Britain.
With regards to the Northern Power House. Skills will clearly be needed in Lancashire as they are receiving 5 times the investment per head of population than Yorkshire. So manufacturing will be moving West.
It should not be the responsibility of the government to provide a supply of skilled labour for companies to employ and use to supplement their profits. Far better for industry to put it’s hand into their own pockets and train their own pool of staff. This would encourage companies to look after their staff and not have the traditional culls of the past which have been largely instigated by bean counters seeking to maximise profits.
This attitude has been a large factor in deterring young persons from entering manufacturing, a fact which has been intimated to me personally many times in the past. It will take a monumental effort by companies and some time before confidence is restored in this sector as a desirable career choice.
Of course industry should pay, but they are in competition and won’t do it on their own. There needs to be some kind of levy proportional to size. That way the playing field is more level and it will happen. Government does play a part, in that healthy industries mean healthy a tax-take and that benefits the nation. Remember EITB and CITB? They got merged into ECITB and they have just been through another shrinking exercise. We are going the wrong way. Of course, education is in the hands of teachers, but only their hands? Where are the customers (not just the kids but their future employers)? When politicians don’t understand education (and most of them don’t) they get advice – from teachers. Government needs advice from the users of education as well as deliverers – managers, engineers – and the people who take the kids on to new heights, the universities. The universities are piggy in the middle; they take their intakes from schools, who they complain about, then supply these young people to industry, and industry complains. It might be worth having a look at what other countries are doing about these challenges – Germany is worth a look.
“….who they complain about, then supply these young people to industry, and industry complains…” I believe the message is simple: “problem? Not me guv, its ‘im!(or ‘er) in the sealed box over there!
Fellow bloggers will probably be aware of my career in a special industry-textiles. It is a well established fact that problems later down what is a lengthy series of processes have their roots ‘up-stream’. Dyeing and printing, finishing, issues can usually be traced to fabric formation mistakes, issues here are usually traced to errors in yarn, and issues in the spinning/texturing of yarn have their roots in the fibre and filament production. I do recall one large spinner being seriously advised by its lawyers, after a particularly expensive and difficult mistake was found, that “perhps we should sue the sheep!”
Come on folk: we all have to play with the cards we were dealt! Surely, getting a poor (in both senses) school-child to start to gain that special skill and understanding which marks out an Engineer is so much more rewarding to a University and its staff, than merely polishing what is already there? There are no poor armies, only poor officers? There are no poor staff only bad managers: there are no bad students, only bad (or what is worse, dis-interested?) teachers.
Get over it?-and then get on with it!