I am particularly delighted to be here this afternoon to celebrate the best of UK manufacturing at the Management Today Best Factory Awards.
I believe that there are many success stories in British manufacturing and many opportunities ahead, and I am pleased that for over ten years now the Best Factory Awards have recognised and celebrated excellence in UK manufacturing. And that they have also spread best practice through benchmarking reports and conferences.
Manufacturing matters
An event such as this reminds us that manufacturing really does matter. It matters to our economy, to the people who work in it and to all of us who enjoy its products.
Indeed, a strong manufacturing sector is critical to our economy. It drives innovation in the rest of the economy through advances in technology, new goods and processes and creates jobs and prosperity elsewhere.
Manufacturing also accounts for around 60% of all the UK's exports of goods and services. And it is a tribute to Britain's manufacturers that their export performance has remained remarkably consistent in spite of the continuing weakness of the of the Euro and the global slowdown.
Manufacturing outlook
I fully recognise that it is tough for manufacturing at the moment. But the difficulties which manufacturing industry face are not unique to this country, and reflect the global economic situation. Comparing the latest available three months with the previous three months, manufacturing output fell by 4% in Japan, 1.7% in the USA, 1.2% in the Eurozone and by 1% in the UK.
Government's manufacturing strategy
We can't cut ourselves off from the world economy or isolate ourselves from the downturn. Equally, the only way to increase the profitability of manufacturing industries and the number of people employed and the wages they are paid is by a continuous process of innovation which makes us a moving target for low wage countries.
It is not the role of the Government to interfere in the corporate strategies of the companies, but we do believe we have a role to play in helping companies face the challenges of globalisation, technology and the various stages of the business cycle. By creating the right environment for industry, and by helping businesses to become more productive, and to innovate and adapt to change.
Where redundancies are inevitable, we will not walk away. When jobs are threatened we will do everything to help people find new jobs and, if necessary, get new skills. And in the future instead of providing retraining when people lose their job, we should move to the situation where people are retrained while still in work so they can move into new, higher quality work.
Changing technologies and management practices are revolutionising the way business is done across all sectors. Keeping ahead of the competition is vital and even the world's most successful companies need to look outside their own organisations for ideas on how to improve their competitiveness. We need, for instance, more UK companies to recognise how powerful the transfer of best practice from business to business can be.
The business-led campaign "Fit for the Future" supported by the CBI and my Department is already playing a major role in demonstrating the impact that transferring best practice can have on business performance and the economy as a whole through providing opportunities for business to learn from its peers.
Our partners in the campaign, like Management Today, are important elements in getting across the best practice message to UK business and we are grateful for the continuing support, enthusiasm and commitment of all our partners. I am very pleased that Fit for the Future is sponsoring one of the awards today.
We are helping manufacturing to raise its game. To help the UK to shift its focus from competing on the basis of cost alone towards high skill, high value-added products and processes based on quality, innovation and know-how.
That is why we're investing £15 million in a new manufacturing advisory service to spread best practice, which will include a centre of manufacturing excellence in every region..
We are supporting the manufacturing jobs of the future by strengthening our science base - and ensuring that knowledge and technology come out of our universities and into our industry.
We have already increased the Science Budget by 15% over the last three years and there will be a further 7% real terms increase per annum over the next three years. That means new programmes of £750 million and £1 billion to invest in science infrastructure, and £250 million extra on three key research areas, genomics, "e"science and Basic Technology.
But it is not enough to have world class scientists, we need also to turn that science into new products and processes, and here too we are beginning to make real progress in terms of exploitation and business innovation.
We have established a Higher Education Innovation fund of £140 million over 3 years as a third stream of funding to universities for knowledge transfer, alongside the funds they receive for research and teaching.
We have created the highly successful University Challenge scheme to provide universities with seed corn money, and Science Enterprise Centres to give young engineers and scientists the opportunity to acquire entrepreneurial skills.
We have set up Regional Innovation Funds of £50 million a year to enable Regional Development Agencies to support clusters and incubators, and we have extended the number of Faraday Partnerships in many areas of importance to manufacturing industry such as plastics, technical textiles and automotive and aerospace materials.
We also support manufacturing jobs of the future by investing in a skilled workforce - in schools, the University for Industry, the Learning and Skills Councils, and Technology Institutes. [and ETB]
Conclusion
The entrants for this year's awards confirm my belief that there is great opportunities for manufacturing in the UK, if we use the creativity and knowledge of our scientists and technologists and the entrepreneurial skills and innovative capabilities of all the people who work in our companies. The short-listed companies here today have all shown what can be done.
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