Coherent R&D and skills strategy needed to fire up Northern manufacturing

By David Morritt, partner and manufacturing expert at KPMG in Leeds.

Northern towns and cities are built on the foundations of traditional manufacturing. From metalwork and construction to food and drink and shipbuilding, the region is a flag bearer for industry. To put it simply, we’re very good at making things.

But, today, this acumen and heritage is not enough. The pace of technology development and the rise of industry 4.0, mixed with political and economic uncertainty that is frustrating in its familiarity, means the region’s manufacturers need to evolve if they’re going to keep up with the rest of the world.

The good news is that progress is being made on this front. The North’s manufacturing community is setting out its stall, with regions like South Yorkshire establishing themselves as a hub for advanced manufacturing. We’re seeing more and more firms explore the increasingly sophisticated applications of automation and robotics, using technology to boost efficiency and improve productivity.

Last year we spoke to manufacturers with operations based across the North for KPMG’s Rethink Manufacturing report and it was clear the pursuit of innovation and the cultivation of the skills needed to leverage new technology is firmly on the agenda. For example, nearly three quarters of firms, 72%, with at least a foothold in the North East believed that innovation is, and will remain, the bedrock of UK manufacturing.

Embracing and taking advantage of innovation requires ambition from the sector and a willingness to explore new ways of working, but it also needs the full support, backing and guidance of the UK government, especially in a climate where the true, long-term impact of Brexit is yet to be determined.  

A coherent strategy for the North 

Our latest Rethink Manufacturing report found more than seven in ten (72%) UK manufacturers said the current approach to regional development is disjointed and unclear. The same findings showed supply chain and infrastructure are key deciding factors for investing in different parts of the UK. 

Last year the government announced it would implement regional industrial strategies, delivered through local enterprise partnerships and mayoral administrations, but details of what these targeted initiatives will look like in practice are yet to materialise in the North, or indeed the rest of the UK.

What our findings suggest is that when they do get up and running, regionally focused programmes designed to support manufacturers will still need to be coordinated, with central support and guidance to anchor them and ensure their overarching objectives are linked. The North’s constituent parts cannot operate in silos.

The Northern Powerhouse ambition could ostensibly provide this. Since the EU referendum it has arguably lost momentum, but if policy makers and the region’s business leaders start making more tangible action we’ll start to see initiatives deliver the infrastructure improvements and investments the region’s manufacturing community needs to thrive.

A renewed focus on R&D investment and skills  

While regional development is important, R&D investment and the cultivation of a workforce with the right skill set will be equally as essential if Northern manufacturers are to innovate and continue to grow.

Encouragingly, the Government has already announced a host of initiatives in line with this, such as its £2bn R&D fund for emerging technology, which includes artificial intelligence and robotics. That commitment is a real step in the right direction and will make a big difference to the fortunes of manufacturers, regional industry leaders just need to reach out and grab the opportunity with both hands.

Skills presents more of a nuanced challenge. Roles like digital scientist, digital engineers, digital architects and cyber security engineers simply didn’t exist 20 years ago. So as the gap between supply and demand of STEM talent in manufacturing widens, government, industry and educators in the North will need to act quickly to ensure the sector is properly equipped. 

The North of England has some of the best higher education institutions in the UK. Manufacturers should look to strengthen their links with universities, while investing in skills and continuous development within their own organisations to help.

Since the industrial revolution the North of England’s manufacturers have helped UK industry excel on an international stage. By investing in skills, focusing on R&D and working with policy makers to improve infrastructure and attract investment, the region’s sector will continue to do so.