The Manufacturer – Are regional ecosystems the key to manufacturing growth?

Posted 9th October 2017
7 minutes read
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When it comes to productivity, it’s well reported that the UK lags behind its European counterparts such as France and Germany. Key to tackling this will be the Government’s Industrial Strategy, which is designed to drive up levels of productivity, giving Britain a stronger lead globally. But what about on a local level?

At its core, the success of Britain’s manufacturing future is rooted in the regional ecosystems that are already in place. By tapping into the up-and-coming tech businesses, local academic research and centres of excellence, something truly exceptional can happen.

One of the first business support programmes in the UK to connect these dots is LCR 4.0. Part funded by ERDF, the LCR 4.0 programme is delivered in partnership with universities and other key research institutes from across the Liverpool City Region to enable SMEs to unleash the transformational potential of Industry 4.0 technologies.

LCR 4.0 has a clear aim to engage and support businesses wanting to take advantage of the 4th industrial revolution, but how will this type of programme boost growth in manufacturing and what impact could these types of programmes have UK wide?

Simon Reid, sector manager at the Liverpool City Region LEP and one of the LCR 4.0 project partners, discusses…

“We already have an issue when we discuss productivity in the UK. We know that we lag behind our European competitor nations, and yet talk of productivity is confusing to many SMEs. For a start if you get ten economists in a room and ask them to define productivity you will probably get ten different answers. Personally, my preferred terminology is “earning potential” which has a great deal more resonance with SMEs. But how do we unleash this earning potential? Utilising technology and the adoption of digital manufacturing techniques, delivered by the Fourth Industrial revolution (4IR), is one avenue companies can pursue.

“The UK has immense strength tied up in its universities and knowledge assets and there is increasing momentum to derive commercial benefit from these. One of the foremost ways we could do this, is to remove the financial and bureaucratic barriers (real or perceived) for smaller businesses who would otherwise not collaborate with these assets to improve their processes, augment products or create new ones. This is the essence of LCR 4.0, with the ‘nine pillars of 4IR’ covered in some form by each of the research institute partners and the LEP acting as a business-friendly single point of access.

“This model could certainly be replicated in different areas of the UK. Some geographies have research specialisms that could be particularly attractive to businesses within the various sub-sectors of manufacturing. There is a clear potential link here to the Industrial Strategy, considering how the government wants ‘place’ to feature as an integral component. Having a local mechanism like this means that manufacturers can look to the horizon of their sector and be proactive in securing new contracts and accessing new markets, as opposed to being reactive and rushing to not be left behind by the trends set by OEMs or Tier 1s which cascade down supply chains.

“If productivity had maintained the same trajectory post-crisis as it did between 1997 and 2007, an hour’s work would be worth 17.9% more than it currently is*. If we were to adopt the same levels of automation across all manufacturing sub-sectors as the countries leading those sub-sectors, we would be looking at a productivity increase of around 20%. This would result in a significant increase in living standards across the UK if the regions are able to facilitate their local business base taking advantage of these new technologies and processes.

“In this respect, LCR 4.0 is acting as a trailblazer and is already generating data about what works and what doesn’t in terms of how SMEs are getting to grips with something that has been traditionally thought of as in the realm of large companies.

“LCR 4.0, which has tremendous support from both industry and Government, is taking steps to assist Liverpool City Region companies to develop new and enhanced digital processes, develop new 4IR enabled products and open new market opportunities both at home and abroad. All of which, once successfully established in the business, means enhanced earning potential and a more balanced economy.”

The transformative effects on business of this engagement will be showcased at Digital Manufacturing Week, part of The Manufacturer Live, between the 14th and 17th of November at the Exhibition Centre in Liverpool and at venues across the Liverpool City Region.

Simon Reid, Sector Manager, Advanced Manufacturing