The future for UK manufacturing lies in adding value

14 February 2008

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The manufacturing sector must accelerate its move towards ‘high value' products, processes and services - and the Technology Strategy Board is here to help.

These were the words of Iain Gray, the Technology Strategy Board's Chief Executive, speaking in London today at a conference on High Value Manufacturing.

Iain Gray was outlining the new organisation's strategy for promoting innovation in the manufacturing sector, which is a key area of focus within the Technology Strategy Board's role of driving and supporting technological innovation for the benefit of the UK economy.

Mr Gray outlined the challenges facing the manufacturing sector from global competition. It is increasingly difficult for the UK to compete in mass manufacturing or on a pure cost basis, and historically industry's response to such pressures has mainly focused on improving production processes and enhancing efficiency through techniques such as lean manufacturing and Six Sigma.

These disciplines are still essential, but will not be enough to maintain a long-term and sustainable competitive advantage for the UK in manufacturing. For this we need both good practice and high value - high enough to outweigh the cost side of the equation.

In developing a strategy for promoting innovation in the manufacturing sector, the Technology Strategy Board recognises that products and production processes are still key - but that there is also a strong move into services and system integrators. There are many areas where value can be added and captured outside production but within the scope of a manufacturing organisation - and technological innovation can deliver results in all areas.

The strategy will therefore focus on four key ‘pillars' in the drive for innovation: products themselves, production processes, service systems and value systems - structured ways of adding value by looking both up and down the supply chain.

Mr Gray said that the Technology Strategy Board will use a range of tools to help industry to find new ways to add value. It will invest in research and development including large projects. It will support feasibility studies, fast-track projects and demonstrators. It will stimulate the transfer of research from centres of UK academic excellence into industry. It will invest more in successful schemes such as Knowledge Transfer Partnerships. And it will continue to listen to business and work in partnership with industry.

In conclusion, Mr Gray emphasised that the UK manufacturing sector is certainly changing - but that change must not be mistaken for decline. It is a major element of the UK economy, accounting for over 25% of GDP. Accelerating innovation and adding value - with the support of organisations such as the Technology Strategy Board - can ensure the sector not only maintains its position but finds new ways of leading the world in manufacturing.

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