A number of initiatives were announced in this year’s UK budget that will help maintain the momentum behind British manufacturing innovation, ensuring strong competition with rival markets such as Germany and the U.S., where similar policy support for manufacturing is in place.
Chancellor of the Exchequer George Osborne described his budget as being focused on the “makers and doers.”
Britain’s GDP growth is currently the fastest in the developed world and new estimates from the Office for Budget Responsibility suggest that Britain may manage growth of 2.7 percent in 2014. Public finances remain under pressure, however, and the Chancellor has—rightly— prioritized initiatives which will rebalance the UK economy so that future growth is less dependent on household consumption and on the financial services sector.
The budget includes a package of initiatives to help manufacturers with rising energy costs and environmental levies. A key element of this is the decision to freeze the carbon price floor—the Treasury’s main carbon emissions tax—to help manufacturers faced with rising energy costs. The measure means the Carbon Price Support rate will be capped at £18 until 2020.
Other measures include a doubling of the annual investment allowance, increased export finance lending, and further funding for cutting-edge research in a range of areas, including big data, cell therapy, and Graphene.
These proposals will help to bolster Britain’s advanced manufacturing sector, to which innovation and high levels of skill are integral.
Manufacturing Sector Thriving
The UK’s advanced manufacturing sector is already thriving. The recently commissioned GE Advanced Manufacturing Index found that over two-thirds of the 200 UK advanced manufacturing executives surveyed felt current market conditions were better than 12 months ago (68 percent). Furthermore, 8 out of 10 companies expect their own business to grow over the next 12 months, with almost half expecting growth of above six percent.
The survey also highlighted the cutting-edge nature of modern UK manufacturing. Eighty-five percent of companies said they employed custom manufacturing practices; clearly highlighting that a key strength of the UK advanced manufacturing sector is its ability to create bespoke products for global customers. Big data (software analytics), computer technologies, and control systems were the next most popular techniques deployed, underscoring the prevalence of automated, precise production lines and the shift away from the noisy, dirty shop floors of Britain’s past.
Even more excitingly, almost a quarter of respondents said they use 3D printing, an “additive manufacturing” technique which GE sees as key to the next chapter in the industrial revolution. Additive manufacturing builds objects by adding parts together in layers, rather than taking raw material and “subtracting” excess material away from fitted molds.
GE’s Advanced Manufacturing Index results suggest that with the support of the initiatives announced in the recent budget, the UK’s advanced manufacturing sector will see stronger than ever growth in coming months, and competitor countries need to take note—or be left behind.
Mark Elborne is CEO of GE UK.