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Andrew Sissons
Researcher, Big Innovation Centre
T 020 7976 3609
Andrew  Sissons

Budget will more than make an impact on manufacturing

Authors: Andrew Sissons Andrew Sissons

23 March 2011

Last week, we published a report calling on the Chancellor to recognise that the manufacturing industry is about more than making things. And to judge by his Budget speech, he’s been listening. He summed up his vision for the UK economy as follows:

'So this is our plan for growth. We want the words
'Made in Britain’
'Created in Britain’
'Designed in Britain’
'Invented in Britain’

That’s definitely more than just making things.

And the Chancellor has backed up this rhetoric by setting out a number of concrete measures to support the UK’s rebounding manufacturing industry. If you turn to page 89 of The Plan for Growth, you’ll see a list of 11 measures to help UK manufacturing become even more innovative and dynamic.

And the most significant of these measures are designed to boost links between businesses and the research base, which drives so much of our competitive advantage in manufacturing. Along with the new Technology and Innovation Centre for high-value manufacturing, there are nine new centres for Innovative Manufacturing, a new programme of Manufacturing Fellowships, and an acceleration of the new-look Manufacturing Advisory Service. And this goes without mentioning the extra £100 million in science funding announced by the Chancellor.

There’s also plenty of movement on skills: 24 new University Technical Colleges, more money for high-level apprenticeships and a renewed focus on STEM skills. The biggest challenge for UK manufacturers is getting highly skilled people into the sector, and all of these measures should help.

But the government must go further over the coming months to recognise the importance of services within the manufacturing industry. Our recent report highlighted the fact that the UK cannot rely on high-tech manufacturing alone – manufacturers must also seize the opportunity to adopt innovative new business models, and provide 'manu-services'. To make this happen, we need to see business and management schools involved in these initiatives, and we need to see young people equipped with a mix of STEM and business skills. This won’t happen overnight, but time to start working on it is right now.

So is this a good Budget for manufacturing? In many ways, it’s very good, but the government needs to get even more serious and more sophisticated about manufacturing over the coming years.