Manufacturing now generates less than 10% of the UK’s economic wealth. Yet indications are that manufacturing might be in for a re-birth, both in the UK and in other Western countries. This may be good news for the British economy, but broadly repatriating manufacturing might devastate some emerging markets. The questions are, what is driving this shift, why now and what do we do about it all?
As a starting point we have identified five significant manufacturing trends. At a recent online event, RSA Fellows discussed the issues and have identified ten ways forward. Please tell us what you think and join us in helping the RSA make a difference.
- Digital Technologies. We are in a new age of manufacturing. Often described as Industry 4.0, we have progressed from cottage industries, through automation and mass production, to a new era of digital design and production. This transition has taken place over the last 30 years, beginning with software tools like CAD/CAM and bolstered by the emergence of 3D printing and additive manufacturing techniques. The upshot is Design and Manufacturing processes are no longer separate activities, rather they are merging into a contiguous whole enabled by a ‘digital backbone’. Much like vertically integrated factories of the past, Industry 4.0 benefits from co-location, only now with incredible degrees of efficiency, flexibility, and waste elimination.
- Robotic Automation. The typical reason for outsourcing manufacturing is labour cost reduction. But if labour costs as a portion of total costs decline because of automation then other factors increase in relative importance. Robotic Automation has brought several industries, including clothing, back to ‘high-cost’ Western economies. Market proximity brings benefits like lower supply chain costs and better quality control, while getting closer to customers facilitates increased innovation.
- Data. With digitisation comes data, lots of it. Embedded data will be an attribute of every ‘smart’ object made, just as weight, strength, and costs are today. Detailed product performance data gathered in real world use, results in far better predictive models yielding more reliable, less wasteful products. Smart goods will gravitate to locations where the ability to analyse an endless flow of data can be taken best advantage of.
- Sustainability. Increasing transparency enabled by social media puts pressure on companies to do more to eradicate child labour, reduce environmental impact, and minimise corruption. Bringing manufacturing closer to home is one potential way to improve transparency and oversight: a move that (for better or worse) plays to nationalists in the UK and United States.
- Crafts. There is resurgence in long-dormant skills and crafts that could lead to a resurrection of abandoned market niches and new applications. This social trend may be a reaction to the technological trends identified above, but may still prove complementary. France and Italy have retained their traditional craft skills and as a result dominate the global production of hand-made luxury items. The modern UK craft movement recognises and encourages artisanal skills and is a key element in linking the Arts with a manufacturing and commerce continuum.
Any return to manufacturing in the UK will look very different from the last century. New jobs will be technical, highly creative, and require significant digital proficiency. Nonetheless, there will be fewer jobs as robots take up production. A re-born and expanded UK manufacturing sector will not save Britain, but may help balance the economy and give purpose and hope to many, especially the young. The challenge is getting leaders to take this opportunity seriously, to appreciate its potential and not reject it as either a wistful return to the past or as the next step towards a dystopian future for emerging economies.
How might the RSA act as a catalyst for a new vision for UK manufacturing? A recent teleconference came up with a short list of 10 ideas:
- An RSA Manufacturing Challenge Medal – The RSA made its name with its Premium Award scheme and medals for innovation, so that might be a good way to stimulate an interest in our manufacturing future.
- An RSA Design & Manufacturing award - to recognize and encourage the convergence of the Digital Design & Manufacturing.
- There is plenty of investment for digital startups, but little for manufacturing. How can we stimulate digital investors to raise and broaden their focus and include manufacturing in their portfolios? How can we drive digital manufacturing convergence?
- Identify a project to stimulate a competitive modern manufacturing UK sector to include in the RSA Economy, Enterprise and Manufacturing key theme. This would complement the existing work in impact and social consequences.
- Re-establish manufacturing as a career option – introduce it into schools via 3D printing, maker-spaces and other hands-on activities that value design and productivity,
- Directly supporting one or two manufacturing start-ups to stimulate interest generally, while better understanding the practical challenges of establishing digital manufacturing when skills and equipment are in limited supply,
- C21 Apprenticeships - re-define apprenticeships for C21 skills and opportunities rather than short-term employment,
- Re-invent the manufacturing finance model – finance models have not kept pace with digital manufacturing and are not focused on the future. What is needed to re-invent finance for C21 manufacturing?
- Reach-out to RSA Fellows in manufacturing to increase the base of interested fellows, maybe partner with industry bodies or companies.
- Explore the positive and negative potential of these trends from both the developed and developing world.
Do any of these ideas strike a chord with you? Can you suggest any other ways that the RSA could contribute towards society benefitting from the trends in manufacturing? We would really like to hear from you below or on the Fellows’ Forum. If we can generate sufficient interest, we plan to work together to progress some of the above ideas.
Brendan Dunphy is a recent fellow who started his career in manufacturing in the 1970s before realizing that information technologies offered a brighter future. Today he is a business advisor based in Nice, France and spends his time helping firms and charities to adopt digital capabilities and advising innovative tech startups from Brazil to India and across Europe.
Michael Northcott is a recent fellow based in Portland, USA. He has a long career in global corporate R&D and related functions and now engages with firms large and small to innovate and improve their collaborative capabilities.