Verity Davidge
Policy Director, Make UK
The UK manufacturing sector is an essential contributor to the country’s economy generating £206 billion gross value added in 2022 a fifth higher than a decade ago.
The manufacturing sector accounts for around half of our exports, two-thirds of spending on research and development and accounts for a significant level of business investment. The sector employs around 2.6 million highly skilled people across the UK, many of them in areas that need levelling up. In short, manufacturing matters to the prosperity and security of the UK.
Themes for growth in manufacturing
The sector is now at a critical juncture. Ten years ago, Make UK (then EEF) set out its case for an industrial strategy. Since then, we have had six plans for growth but now find ourselves without one. There is broad agreement among stakeholders about what the UK needs for a successful industrial strategy.
These can be broadly categorised into five themes: skills; infrastructure; finance; innovation; and the business environment. To these, we can now add significant shifts in the policy landscape from the post-Brexit and pandemic landscape, the transition to net zero, rapidly accelerating technologies spinning out from the fourth industrial revolution and the political imperative to spread growth more evenly across the UK.
The sector employs around 2.6 million highly skilled people across the UK, many of them in areas that need levelling up.
Harnessing UK strengths for manufacturing innovation
Internationally, the UK risks being squeezed by the US Inflation Reduction Act, which is already having a significant impact on drawing in green investment. Similar measures are also being proposed by the EU. In the face of these, the UK is the only developed nation without an industrial strategy. Yet, never has the case been clearer to adopt one.
We now have the opportunity to harness the undoubted strengths the UK possesses in its academic and research base by working with manufacturing companies that are highly innovative. They are clear that an industrial strategy would bring the benefits of a long-term vision and a stable environment in which they can plan, invest and grow.