This is the conclusion of Pulling Together, a report from management consultants A.T. Kearney, which states that a focused strategy to boost innovation and service driven supply chains could also create over 500,000 jobs in the same period.
According to the Confederation of British Industry (CBI) the report reveals underinvestment in research and development (R&D), a growing skills crisis, and weakened foundation industries - such as plastics, metals and chemicals - that are key to advanced manufacturing.
CBI believes government and business should act together to strengthen supply chains, focusing on innovation, better quality products, and customer service.
As supply chains bear the brunt of skills shortages, the CBI is calling for action to double the number of STEM graduates, triple the number of STEM apprentices, and make more concerted efforts to bolster the number of women in manufacturing.
Similarly, skills funding should be better aligned with the UK’s industrial strategy and the Tier 2 skilled visa cap should be raised via reforms to the immigration system.
CBI further believes that to create a more vibrant business environment, and better respond to new opportunities, the UK must ensure a tax system that encourages long-term investment, particularly in SMEs; establish annual reviews to ensure energy and logistics costs are globally competitive; and address so-called ‘red areas’ holding back the day-to-day running of businesses. These can include getting electricity set up and registering property.
In a statement, Katja Hall, CBI deputy director-General, said: ‘Optimism within industry is now rising at a strong rate, and investment intentions are on the up.
‘We need to see a bold strategy that breathes new life into our supply chains, and makes the UK the destination of choice for manufacturing high value products.
‘The scale of the challenge is sizeable - our competitors are powering ahead, with France outstripping our research and development investment by 40 per cent. At the same time, only three per cent of our graduates end up in engineering or technology jobs.
‘We need policies which focus on creating long-term value - from increasing R&D spending to establishing a UK-wide materials strategy - to enable industry to play to its strengths and compete effectively on the world stage.
‘This renaissance in British manufacturing will make it a byword for innovation and quality.’
Click here to read the report.
Key measures recommended by CBI:
- Setting a long-term target for public and private sector spending on R&D to rise to three per cent of GDP
- Widening the R&D tax credit to support the later stages of the commercialisation and manufacture of innovative British products
- Doubling spending on Innovate UK over the course of the next parliament
- Financially incentivising science, technology, engineering and mathematics (STEM) degrees, and ensuring more graduates take up jobs in these sectors
- Creating a national materials strategy, as part of our industrial strategy, to protect and enhance critical supply chain sub-sectors.
Red Bull makes hydrogen fuel cell play with AVL
Formula 1 is an anachronistic anomaly where its only cutting edge is in engine development. The rules prohibit any real innovation and there would be...