UK manufacturers take significant steps in adopting digital technologies, but Midlands lags behind

Manufacturing

British manufacturing companies have taken significant steps in adopting digital technologies with some 80 per cent confident that Industrial Digital Technologies will be a reality in their businesses by 2025, according to new research, ‘Bouncing Back Smarter: Innovation Monitor 2020’, published today by Make UK – the manufacturers’ organisation.

The use of 3D printers, AI, Internet of things, Augmented and Virtual Reality are making a real contribution to business operations across companies of all sizes -especially around the recent need for remote production and monitoring – but a significant number of small to medium sized businesses remain at the digital starting block.

The two years since Make UK’s Innovation Monitor have seen little change in the barriers to digital adoption, particularly for SMEs – lack of skills and technical knowledge remain top of the list but scarcity of finance is becoming a more significant block, with companies stretched due to loss of business caused by the pandemic.

However, a lack of knowledge of available Government schemes, and an absence of targeted digital implementation help for SMEs is further holding back progress, says the organisation. Other countries, such as Germany and Japan, have extensive support systems in place to help their manufacturing SMEs modernise – giving them a significant boost to their international competitiveness.

While manufacturers are aware of the benefits of Industrial Digital Technologies, the report found that almost half are not yet adopting them. Regional variation is also stark. The Government’s Made Smarter pilot in the North West has been impressive in terms of digital adoption – with 20 per cent of small businesses in the area already at the highest level of IDT adoption.

This is second only to the South East at 33 per cent.

But in the West Midlands, where there is a large proportion of traditional engineering manufacturers,  a very high proportion of companies have done nothing about digitalisation, with only nine per cent at the highest technical revolution phase of implementation.

The current COVID crisis has renewed the focus on resilience, creating significant opportunities for investment in IDTs. However, the pandemic will hit many manufacturers’ spend on in-house R&D with two-fifths planning to decrease investment, so access to bespoke advice to choose the most appropriate technologies is a must to enable businesses to make the best choices.

This report revealed that there is an emerging set of leaders within UK manufacturing that have embraced digital opportunities, scored early wins and are carving out strategies for further competitive advantage. These businesses will not only be the most resilient in the demanding post-Brexit climate, but beyond any short-term market volatility they will be more agile, smarter and more responsive to customer change.