Manufacturers holding off investment in new technology

The vast majority of manufacturers in the Midlands remain confident about Britain’s ability to compete in the international marketplace over the next five years, new research has found.

However, the study by Barclays concludes many manufacturers are still delaying investment decisions, especially in new technology.

The bank’s research said 80% of manufacturers in the Midlands were confident of their ability to compete on the international stage, with more than two-thirds attributing their confidence to ‘fourth industrial revolution’ (4IR) technologies, such as machine learning, sensors and big data, which they believe will boost the productivity of their business.

Of those that have already invested, more than a quarter are already seeing returns on that investment, however, the Barclays Corporate Banking Manufacturing Report, Intelligent manufacturing: an industrial revolution for the digital age said there was still resistance to investing in the very latest innovations.

The report, based on the views of more than 500 manufacturing industry decision makers, found that, while basic forms of automation, like robotics, have a high rate of adoption (76%), 20% of manufacturers in the Midlands are yet to invest in 4IR technologies like artificial intelligence.

Economic modelling included within the report predicts that manufacturers could boost the sector by an additional £102bn per year by 2026, provided 4IR saw greater adoption and investment over the coming years.

The study also shows that the industrial heartlands such as the Midlands Engine would benefit most from investment in 4IR technologies. Sectors singled out include sensors, big data, energy self-generation and machine learning.

Carl Radd, Manufacturing Relationship Director at Barclays in the Midlands, said: “Our research shows that manufacturers see the benefits of this cutting-edge technology, and many have started to match their intentions with investment. However, we are at a watershed.

“While the outlay may seem expensive for many at a time of uncertainty, the industry needs to raise its levels of investment in the skills and infrastructure needed to harness these new technologies and keep us more productive than other international manufacturing hubs.  Businesses that make the leap will be rewarded.

“British manufacturing is going through another industrial revolution but confidence alone does not translate into success and benefit. With sterling currently weaker and a robust appetite from domestic and international markets for British goods, the industry is in a strong position to take advantage of the opportunities investing in 4IR technologies can bring.”