Smart Machines & Factories
Time to get our productivity act together
Published:  31 May, 2018

Industry 4.0 and The Industrial Internet of Things (IIOT), presents huge opportunities for British manufacturing over the next decade, and the recent biennial co-location of events at the NEC in April, which included the inaugural Smart Industry Expo, left visitors in no doubt that the 'smartening' process of industry and manufacturing is going to change the face of global industry forever.

The core messages that came out of the recent events in Birmingham were that the uptake of smart technologies in the industrial sector will be central to our economic growth, by improving our national productivity, creating higher value jobs, and arming our workforce with the digital skills required in the decades ahead.

All of the these messages are pivotal to our future success, however the UK’s long-standing productivity problem is one that should have been laid to rest a while ago and we now need to get on top of it as a matter of urgency. The issue was again highlighted by new research from EEF showing the evolution of manufacturing sub-sector productivity growth against key international competitors before and after the financial crisis.

The research shows that manufacturing is the engine to drive productivity growth across the whole economy having beaten whole economy and services productivity growth in the past. In addition, in the run up to the financial crisis the sector beat the manufacturing productivity growth of Italy, Spain and Germany. However, looking under the bonnet shows that the performance of manufacturing sub-sectors has diverged since the financial crisis with productivity growth across the sector flat-lining. As a result focused policy response is now urgently needed from Government.

Ms Lee Hopley, chief economist at EEF, explained that the UK has known about the productivity problem for some time with various attempts made to try and fix it across the whole economy. Productivity growth matters for wages and international competitiveness yet ten years on from the start of the financial crisis these attempts have not delivered a major shift and we need to tackle the challenge in a different way.

The Industrial Strategy Council should now be created urgently and put to task to identify how the overall strategy can improve productivity in those industrial sectors where it has lagged. Manufacturing offers a good area to get gains on productivity growth, and in light of Brexit, as a nation we need to get our productivity act together urgently in order to take advantage of any ‘global opportunities’.