Despite the decline since the 1970s, when manufacturing contributed 25% of UK GDP, we rank second globally in aerospace. The UK-based auto industry exported a record-breaking 84% of its production in 2011 and our chemical and pharmaceutical industries add £20m per day to the UK balance of trade. Underpinning these important statistics is an average annual productivity increase of 3.6% - two and a half times greater than the UK economy as a whole.
Whilst globalisation has continued to drive some production activities towards countries with the lowest labour costs and/or the largest markets, there have been recent examples, in a number of industries, of the "re-shoring" phenomenon, where supply chain cost considerations and / or quality control concerns have seen production come back to the UK.
High value manufacturing is the application of leading-edge technical knowledge and expertise to the creation of products, production processes, and associated services which have strong potential to bring sustainable growth and high economic value to the UK. Activities may stretch from R&D at one end to recycling at the other. Such potential is characterised by a combination of high UK R&D intensity and high global growth.
Manufacturing innovation requires new knowledge to generate entirely new products, processes or services, or new technology to improve existing processes.
This often involves bringing together more than one novel technology and components of
different supply chains to secure future competitive manufacture and through-life service. Very few enterprises can address these challenges alone. Manufacturing new products
or adopting new processes also requires demonstration at commercial scale, which is often expensive and risky.
This so-called ‘valley of death' – where many innovations fail – is a significant barrier to manufacturing innovation. It also can be difficult for small and medium-sized enterprises to connect with global players who offer routes to market. We will help address these challenges.
The UK Government aims to increase the role that manufacturing plays in the growth of the economy, by helping to create an environment that will encourage companies to commercialise more of the world-class output of the UK science base through manufacture here in the UK.
This will include emerging technologies where the UK is scientifically strong and has the potential to make a global impact through manufacturing. These include composite materials, plastic electronics and industrial biotechnology.
Our High Value Manufacturing strategy
and the Future Landscape Study
, which underpins this strategy and was prepared for us by the Institute for Manufacturing (IfM) in Cambridge identified many of the areas of potential which are addressed by our programme of activities in the coming period.
We have identified five strategic themes where there is strong potential for innovation in high value manufacturing to make a difference across multiple sectors and generate wealth for the UK:
Integration of new materials with manufacturing technologies
New business models
To tackle the challenges and exploit the opportunities for innovation in these areas, businesses will also need to develop certain "national competencies", as defined in the Future Landscape Study.
Our investment programmes will set out to support industry in developing these national competencies, through feasibility studies and collaborative research and development competitions, and through the High Value Manufacturing Catapult. In this regard, the High Value Manufacturing Catapult, which opened for business in October 2011, will continue its development to provide a transforming resource to accelerate the commercialisation of new and emerging manufacturing technologies.
High value manufacturing action plan 2013-14
High value manufacturing - strategy 2012-15