Revitalizing UK Manufacturing: The Urgent Need for a Strong Industrial Strategy

The UK manufacturing sector’s drop from the global top 10 is a significant setback, according to industry leaders. Recent analysis by Make UK, released on July 29, highlights that the UK’s manufacturing output in 2022 was valued at $259 billion, placing the country twelfth worldwide—a position it has not fallen to since 2012.

The decline in rankings occurred as Mexico rose to seventh, bolstered by a robust manufacturing base and Chinese investments during the Trump era aimed at countering tariffs. Russia advanced to eighth due to a substantial increase in defense production, while Taiwan surpassed the UK thanks to its dominance in semiconductor manufacturing, a sector experiencing heightened demand.

Make UK emphasizes the urgent need for the UK to develop a long-term industrial strategy, pointing out that the leading countries benefit from such strategies which boost economic output. Last year, Make UK reported that 80% of manufacturers felt disadvantaged compared to nations with established industrial strategies.

Dr. Graham Hoare OBE, CEO of the Manufacturing Technology Centre in Coventry, described the situation as a “major body blow” to UK manufacturing. “We possess some of the most innovative manufacturers and research facilities globally. It is imperative to leverage this expertise to re-establish ourselves as a manufacturing powerhouse,” he stated. Hoare also stressed the importance of the government’s new industrial strategy and investments from the National Wealth Fund, alongside a crucial upskilling and reskilling program to meet productivity targets.

Kelly Becker, president of UK and Ireland at Schneider Electric, highlighted the potential of the energy transition as a cornerstone of the forthcoming industrial strategy. “The UK can regain its manufacturing supremacy by harnessing the transformative power of the energy transition,” she said. Becker called for the strategy to focus on supporting the manufacturing and adoption of solutions that drive the decarbonization and digital transformation of the UK economy. She emphasized that these efforts could create high-skilled jobs, boost local economies, and enhance the UK’s global competitiveness.

Verity Davidge, director of policy at Make UK, expressed deep disappointment over the UK’s fall from the top 10 but attributed it to specific global trends rather than a decline in UK industry. She reiterated the necessity of a long-term industrial strategy to capitalize on the UK’s strengths, ensuring it remains a leader in advanced manufacturing.

The data underscores the critical need for the UK to adopt a comprehensive and forward-looking industrial strategy, supporting innovation, skills development, and sustainable growth to reclaim its position in the global manufacturing arena.

Dr. Hoare and other industry leaders emphasize that strategic investments in cutting-edge technologies and sustainable practices are paramount for revitalizing the UK manufacturing sector. The forthcoming industrial strategy should prioritize sectors where the UK already demonstrates excellence, such as aerospace, pharmaceuticals, and automotive industries, which could serve as cornerstones for a broader manufacturing renaissance.

A significant component of this strategy must include fostering collaborations between academia, industry, and government to drive research and innovation. Dr. Hoare pointed out that the UK is home to world-renowned research institutions and innovative manufacturers. “We need to ensure that the latest advancements in technology and research are seamlessly integrated into our manufacturing processes,” he said. This integration will not only boost productivity but also ensure that UK manufacturing remains at the cutting edge of global industry trends.

Moreover, addressing the skills gap is crucial. The call for a major upskilling and reskilling program is echoed by many in the industry, including Make UK. “Without a workforce equipped with the necessary skills, even the most advanced technologies and innovative strategies will fall short,” Dr. Hoare added. This means investing in education and training programs that align with the needs of modern manufacturing, from advanced robotics and AI to sustainable production techniques.

Kelly Becker of Schneider Electric also stressed the importance of sustainability in the new industrial strategy. “The energy transition offers a unique opportunity for the UK to lead in sustainable manufacturing,” she said. This involves not just adopting greener production methods but also innovating in areas like energy efficiency and renewable energy integration within manufacturing processes. By focusing on sustainability, the UK can set global standards for climate and environmental responsibility in manufacturing.

Additionally, long-term investment in infrastructure and technology is vital. Becker mentioned the importance of maintaining and expanding initiatives like full expensing to drive growth and innovation. “These investments will be critical to achieving net-zero targets and establishing the UK as a leader in climate and sustainability standards,” she noted.

The UK’s slip from the top 10 in global manufacturing rankings serves as a wake-up call. The need for a robust, forward-thinking industrial strategy has never been more pressing. By leveraging its existing strengths, addressing skills gaps, and embracing sustainability, the UK has the potential to not only regain but surpass its former manufacturing glory. As Dr. Hoare, Becker, and Davidge suggest, the path to reclaiming a top position in the global manufacturing landscape lies in strategic investments, innovation, and a cohesive long-term vision that unites industry, government, and academia in pursuit of common goals.