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Government Launches New Framework for UK Manufacturers

The Government this week unveiled a new strategy for the UK's manufacturing sector - 'New Challenges, New Opportunities' - to help UK firms take advantage of changing global trends in manufacturing.

In bringing forward its refreshed manufacturing strategy, developed by the Department for Business and the Department for Innovation, Universities and Skills, in partnership with industry, the Government is reaffirming is commitment to the sector as a key part of a mixed and balanced UK economy in the future.

The strategy brings together almost £150 million of medium term support for UK manufacturing, and sets out Government's view of what the sector needs for success in the long term - including seizing the opportunities of the low carbon economy, supporting skills, realising overseas opportunities, and improving the perceptions and understanding of manufacturing.

The government recognises these are demanding times and is committed to doing all it can to help manufacturers to get through them. But despite the current challenging global economic climate, and recent downturns in the sector, there is reason to be confident. And it is right to have a medium term framework to help businesses emerge from these challenging conditions and remain competitive in an increasingly globalised sector.

Britain has the open and flexible markets that will allow British business to react to changing and challenging circumstances and manufacturing is still very much a UK success story and the unsung hero of the UK's economy.

Business Secretary John Hutton said: "Manufacturing is central to the success of the UK economy and it is vital the sector has the right foundations to endure the current economic slowdown and emerge stronger and fitter than ever.

"We are the world's sixth largest manufacturer - the industry accounts for over half our exports, contributes £150 billion to the economy and around three million jobs. But we need to recognise that the global landscape is changing so we can help UK manufacturers stay ahead of the game. I want the UK to be at the forefront of opportunities opened up by the move towards a low carbon economy. With the right support in place, we can grow our nuclear and renewables industries to become world-leaders in green technologies, supporting hundreds of thousands of "green collar jobs.

"And for many years the industry's success has suffered from a lack of public recognition, and it is time we redressed this balance. We must attract more talented young people - the lifeblood of future
success - into the industry and ensure that this talent is nurtured and developed."

Skills Secretary John Denham said: "We want to support innovation in UK manufacturing by maintaining a world-class research and development infrastructure, through intelligent use of Government
procurement and regulation to stimulate markets and the growth of innovative business, and to build world-class skills.

"We want businesses to be able to nurture and develop the talent of their people, so we will make it easier for manufacturing employers to access skills support and extend the number of high-quality
apprenticeships available by supporting firms in training additional apprentices.

"Building on the successes of our innovation strategy, we'll continue to drive innovation in high-value manufacturing, with the Technology Strategy Board investing an additional £24m in research and
development to help British manufacturers not only maintain but increase their technological and innovative edge over global competitors."

The strategy sets out Government's view of what the sector needs for success in the long term. It includes:

Seizing the opportunities of the low carbon economy

Next year, a low carbon industrial strategy will address the challenges facing manufacturers as they try to reduce their carbon footprint and the huge opportunities from investment in energy and a shift to a low carbon economy. The Office of Nuclear Development will work with industry partners to develop the nuclear supply chain and maximise high value-added work captured by UK manufacturers from an estimated £20bn capital expenditure in nuclear. And a new Office for Renewable Energy Deployment will be established to address barriers to renewables deployment including helping to develop the UK supply chain. Nuclear and renewables alone could create up to 260,000 jobs over the next ten years.

Supporting skills

There will be a new focus on apprenticeships. This will see 1,500 new manufacturing apprenticeships, in addition to the 9,000 places announced earlier this year which will increase the total number of manufacturing apprenticeships by over 10%. We will expand the new places by inviting bids from larger manufacturers to train additional apprenticeships, including for their supply chains. And for manufacturers, there will be a simplification of the ways they can access support on skills and training with a MoU published today by the skills agencies on how they will work to do that.

Realising overseas opportunities

Manufacturing attracts more FDI to the UK than any other country in Europe and globally the UK is second only the US. Manufacturing growth in other countries means opportunities for the UK. UK Trade & Investment (UKTI) will allocate additional resources to target a package of new support for 600 UK companies of all sizes to identify manufacturing value chain opportunities in India and China. And the UK Intellectual Property Office (UK-IPO) will advise on using and protecting IP in these markets.

Improving technology networks

In addition to the existing centre in Yorkshire and the centre currently being built in Glasgow, there will be a new Manufacturing Technology Centre in Coventry. It will have industrial scale pre-production and demonstration facilities, which could lead to £130 million of investment in business-led applied research and its exploitation over the next 10 years. And the Technology Strategy Board will invest £24 million into research central to high vale added manufacturing.

Changing the image of manufacturing

A new body, 'Manufacturing Insight' will be tasked with making the public perception of manufacturing reflect the realist of a successful, modern and broad sector and ensuring young people are aware of the exciting career opportunities available will be established. There will also be a 'Manufacturing the Future' schools
campaign to promote manufacturing career prospects to young people.

Making the most of 'intangibles'

Firms in the UK are using other areas of leading British skills and industry to make them more globally competitive. UK and global businesses are growing their investment in intangible or knowledge assets, such as software, design, brand building in order to improve their global competitiveness and to meet the changing needs of customers. The Design Council and Regional Development Agencies will implement the findings of the current review of the Designing Demand programme to increase penetration of the programme across the regions. We have supported the creation of the UK Design Skills Alliance and will work with the Alliance to help ensure the world leading UK design sector has the skills required by manufacturers to compete in global markets.

The refreshed strategy is intended to inform dynamic process and will shape further new policies and programmes in the future. It replaces the Government's manufacturing strategy of 2002, which was the first
strategy for the sector for more than 30 years.

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