NOVEMBER 2019
The way we trade around the
world is changing. The
assumptions that have
underpinned our goods
trade for nearly half a
century, in particular those
that fl owed from the UK’s
membership of the European
Union, no longer hold true. And as
Britain reorientates its trade and
regulatory policies, our long-term
destination remains unclear.
Simultaneously, our sector is
undergoing a massive digital
transformation – requiring
investment in new technologies
and ways of working – as well as
the transition to a net-zero carbon
economy by 2050. So what does all
this uncertainty mean for
manufacturers, and what should
we do about it?
At the time of writing, the
negotiations between the UK and
the EU about our future trading
relationship were about to enter
their second round. Wherever
they end up, a very signifi cant
change to the business landscape
will happen at the start of next
year. Customs processes, border
checks, new regulatory
requirements and, potentially,
tariff s will be imposed on trade
between the UK and the EU, and
vice versa. New migration policies
will come into force, which will
make it harder and much more
expensive to hire EU nationals in
the UK, and also make it more
diffi cult for UK citizens to travel to
the EU for work – whether
permanently or temporarily. Trade
with a range of non-EU countries
may also become harder,
depending on what terms the UK
Government is able to negotiate
separately with them.
These changes are made even
Digital, global
and green:
Tim Figures - director of technology, sustainability
and innovation at Make UK - discusses the future of
UK manufacturing in a rapidly changing world
more challenging by the very tight
timescale. We might not know the
precise details of the trade
agreement with the EU until the
autumn, leaving just weeks to
make the necessary arrangements
to implement it. There is a
possibility that the UK and EU fail
to strike a deal at all, in which case
our trade with the EU will revert to
the most basic WTO terms. So
manufacturers need to prepare
now for a range of outcomes. If we
wait for 100% certainty about what
is going to happen before doing
anything, it will be too late.
Last year, Make UK, in
association with Squire Pa on
Boggs, published a report se ing
out the range of issues that
manufacturers need to be thinking
about. While we did that in the
context of a possible disorderly
exit from the EU – which will not
now happen – the points in that
document still remain valid. It’s
available to download free from
makeuk.org and is a good starting
April 2020 / www.theengineer.co.uk 42
point for business preparedness.
And we will be ramping up our
support for Make UK members
and affi liates as the year
progresses.
But beyond worrying about
customs forms and work permits, I
think there are some more
fundamental questions
manufacturers should be asking
themselves. Is my supply chain
model viable in a deglobalising
world, where transporting things
across borders will become more
diffi cult and more costly? What
impact will the move to a net-zero
carbon economy have on my
business model and customer
expectations? And, perhaps most
fundamentally, how do I respond
to a tightening labour market,
increased wage costs and skill
shortages?
The UK manufacturer of the
future will need to have a diff erent,
higher skilled and digitally savvy
workforce, more reliant on data
analysis, working collaboratively
THE SMART USE OF TECH AND DATA HAS THE
POTENTIAL TO TRANSFORM MANUFACTURING
PRODUCTIVITY IN THIS COUNTRY BUT TAKE UP HAS
BEEN TOO SLOW
with technology in order to remain
competitive. The adoption of
digital manufacturing techniques
– in other words the smart use of
tech and data - has the potential to
transform manufacturing
productivity in this country,
allowing us to capture more value
and to produce goods far more
effi ciently. But take up has been
too slow, particularly by SMEs,
who are concerned about the cost,
confused about the technology,
and don’t always feel confi dent
about implementing change.
As well as all of this, the UK
manufacturer of the future will
need to embrace sustainable
production in all its forms. The
Government’s legally binding
target of a net zero carbon
economy by 2050 will impact us
all, but irrespective of regulatory
changes, customers will
increasingly demand low-carbon
and sustainable goods. This will
require signifi cant changes to the
way we make things – but it also
unlocks huge demand for the new
and innovative products our
economy will need to decarbonise.
Smart manufacturers will think
about how best to capitalise on
this and benefi t from what is often
termed ‘green growth’.
I don’t believe that small-scale,
incremental change will be
enough to adapt to these three
huge and simultaneous
challenges. I hope, as our sector
prepares for the new trading
relationships that will commence
in 2021, our leaders take the time to
consider these more fundamental
questions. If we can create a sector
that is truly digital, global and
green, then we will have secured
its future for generations to
come.
Comment
Tim Figures
/makeuk.org
/www.theengineer.co.uk