WELCOME TO OUR FIRST INDUSTRY TREND REPORT.

Transcription

1 INDUSTRY TREND REPORT 2017

2 WELCOME TO OUR FIRST INDUSTRY TREND REPORT. Earlier this year, we surveyed the UK manufacturing industry about their thoughts, concerns and hopes on some of the biggest issues business has ever faced, including Brexit, the skills shortage, diversity and Industry 4.0. The UK manufacturing and engineering industries are going through a period of unprecedented change. Brexit has opened us up to a world of uncertainty regarding future trading and skills sourcing. The Apprenticeship Levy could help us to encourage more much needed new blood into industry but the majority of businesses are unsure whether it s a good thing. And Industry 4.0 though still in its infancy is already highlighting how technology can impact and improve the future productivity, performance and prosperity of many businesses. Featuring fresh statistics and comment, this report will give you new insight into industry opinion and help you benchmark your optimism and concern against your peers. The UK manufacturing and engineering industries are going through a period of unprecedented change. Gordon Kirk, Event Director, Subcon WE POLLED 629 UK PROFESSIONALS ABOUT: Brexit 45% believe UK manufacturing and engineering will have a stronger future once Britain is no longer part of the EU. Skills 67% are worried about the future availability of skilled staff in their business Diversity 67% believe there are not enough women working in UK manufacturing and engineering 83% believe there are not enough young people working in UK manufacturing and engineering Industry % do not understand what Industry 4.0 is

3 BREXIT AND THE UK We open our first Industry Trend Report with the biggest issue to face UK business and the economy for decades: Brexit. Our poll asked manufacturers three key questions relating to Britain s exit from the European Union: 1 Do you think your company will have a stronger future now that Britain is leaving the European Union? 2 Do you think the UK manufacturing/engineering industry will have a stronger future now that Britain is leaving the European Union? 3 Do you think your business/ industry will suffer if Brexit impacts free movement of labour? In response to Q1. 40% of the 629 businesses polled answered yes, they do think their company will have a stronger future out of the EU. This was in comparison to 14% answering positively in a similar poll 12 months ago. Whether this indicates an increase in confidence across the industry is impossible to say, however, as the respondents were not identical. It will be interesting to see how these figures change in a year from now. We also asked if businesses think UK manufacturing and engineering will have a stronger future once Britain is no longer part of the EU. 45% answered yes. The corresponding response last year was 30%. Finally, the poll asked businesses if they believe industry will suffer if Brexit impacts free movement of labour. Respondents were split down the middle: 46% believe it will have an impact; 47% believe it will make no difference. Industry opinion Industry will almost certainly suffer if leaving the EU restricts free movement of labour. We are already seeing some skilled and semi-skilled people leaving and this will only get worse. Jeremy Hadall, Chief Technologist for Robotics and Automation, The Manufacturing Technology Centre Access to skilled labour is vital to the survival of the UK s high-value manufacturing sector. Employers must have assurances that they will be able to keep existing EU workers on their books and they will continue to have access to a pan-european talent pool in the future. Paul Adams, Head of Aerospace and Defence, Vendigital Of course, the UK is still two years from breaking away completely from the European Union. We still have a General Election to deal with, the complex process of negotiating new trade agreements has not begun and the full impact of Brexit is yet to be felt, so it will be very interesting to see how the industry feels when we repeat this research again in 12 months time. Gordon Kirk, Event Director, Subcon

4 2017: DO YOU THINK YOUR COMPANY WILL HAVE A STRONGER FUTURE NOW THAT BRITAIN IS LEAVING THE EUROPEAN UNION? YES: 40% NO: 46% I DONT KNOW: 14% 2017: DO YOU THINK THE UK MANUFACTURING/ENGINEERING INDUSTRY WILL HAVE A STRONGER FUTURE NOW THAT BRITAIN IS LEAVING THE EUROPEAN UNION? YES: 45% NO: 41% I DONT KNOW: 14% 2017: DO YOU THINK YOUR BUSINESS/INDUSTRY WILL SUFFER IF BREXIT IMPACTS FREE MOVEMENT OF LABOUR? YES: 46% NO: 46% I DONT KNOW: 8% Brexit could mark the end of zero-tariff trading in Europe and this is cause for concern particularly for the many UK suppliers to Airbus. But there is much that can be done to ensure UK-based manufacturers stay on course and limit their exposure to financial risk. Paul Adams, Vendigital

5 SKILLS AND THE UK The skills shortage may not be a new challenge facing the UK manufacturing industry, but if Brexit does impact free movement of labour, businesses in the sector may find it increasingly difficult to source, develop and retain talent in the future. When asked, more than two thirds (67%) of respondents confirmed they are worried about the future availability of skilled staff in their business and 42% are concerned that Brexit will make it more difficult to find skilled staff. Well over half - 61% think the Government needs to do more to promote skills training. While the Government introduced the new Apprenticeship Levy in April, 40% still feel uninformed about it and 42% are currently not employing any apprentices. Apprenticeships have a vital role to play in securing the skills businesses need to drive productivity and growth while also ensuring young people are given every opportunity to develop a fulfilling and rewarding career. It s important that the Apprenticeship Levy builds on this by supporting manufacturers training ambitions and offering valuable and aspirational roles as shown in our recent report with the EEF. Dave Atkinson, UK Head of Manufacturing, SME Banking, Lloyds Bank Commercial For me, the biggest challenge facing the industry is the engineering skills gap in the UK. There is a growing shortage of experience for intermediate and senior level engineers in the industry. However, there is a feeling in the industry that the stipulation to spend at least 20% of the time on off-the-job training is too high and not aligned with modern blended learning practices. Sid Shaikh, Engineering R&D Manager, Ocado Are you worried about the future availability of skilled staff in your business? Are you currently training any apprentices? Do you think that the Apprenticeship Levy is a good thing? Are you worried that Brexit will make it more difficult to find skilled staff? Do you think the Government is doing enough to promote skills training? 67% YES 27% NO 6% I DON T KNOW 54% YES 42% NO 4% I DON T KNOW 44% YES 16% NO 40% I DON T KNOW 42% YES 50% NO 8% I DON T KNOW 12% YES 72% NO 16% I DON T KNOW

6 DIVERSITY AND THE UK IT'S TIME TO EMBRACE GENERATION Z Since 6 April 2017, all employers with a salary bill over 3 million have been required to pay into the Apprenticeship Levy, yet 40 per cent of businesses responding to our survey just three weeks earlier confessed to still not knowing whether the Apprenticeship Levy is a good thing. DO YOU THINK THAT THE APPRENTICESHIP LEVY IS A GOOD THING? YES: 44% NO: 16% I DONT KNOW: 40% Just over half of the businesses polled (54 per cent) are currently training apprentices, yet a far higher number - 83 per cent believe there are not enough young people working in UK manufacturing and engineering and 90 per cent claim the industry would benefit from more young people working within it. In addition to these statistics, 88 per cent say engineering is a good career choice for young people and, when asked what needs to be done by industry and Government to encourage more young people to consider manufacturing as a career, increasing and improving education at school level was the number one response. What needs to be done by industry and Government to encourage more young people to consider manufacturing as a career? 1 Increase and improve education at school level 2 Invest in apprenticeship training 3 Promote potential career progression and opportunities 4 Increase pay at all levels 5 Improve the image of the industry

7 DIVERSITY AND THE UK IT'S TIME TO EMBRACE THE OTHER 50 PER CENT For this report, we polled the industry about the number of women as well as young people working in UK manufacturing. We asked if there are enough women in the industry, whether it would benefit from a more balanced workforce gender-speaking, and if manufacturing is even a good career choice for women. The results show overwhelmingly that industry professionals believe the male-dominated world of manufacturing is an issue and that the status quo should change. Two thirds - 66% - believe there are not enough women working in UK manufacturing and engineering and 68% believe it would benefit from more women working in it. Over three quarters - 77% - also believe manufacturing is a good career choice for women. Do you agree or disagree with the following statements about the UK manufacturing industry? There are not enough women working in UK manufacturing and engineering The industry would benefit from more women working within it Manufacturing is a good career choice for women 66% Agree 16% Disagree 18% Don t know 68% Agree 11% Disagree 21% Don t know 77% Agree 6% Disagree 17% Don t know What needs to be done by industry and Government to encourage more young people to consider manufacturing as a career? 1 Increase and improve education at school level 2 Invest in apprenticeship training 3 Equal pay 4 Better provision for working mothers 5 Invest in STEM teachers and teaching 5 Change the perception of the industry Eliminating stereotypes remains a vital part of the process which can hold people back. The sector is heading in the right direction with more female representation on senior boards and the drive for better apprenticeships, however more can be done. The onus remains on the industry to create a more diverse workforce and showcase inspirational role models. This will help eliminate old stereotypes, and provide evidence of what women and young people can achieve by pursuing their ambitions. Dave Atkinson, UK Head of Manufacturing, SME Banking, Lloyds Bank Commercial

8 INDUSTRY 4.0 AND THE UK When asked on his thoughts about Industry 4.0, Jeremy Hadall at The Manufacturing Technology Centre answered: It s a great idea that s been around for years, but it s only now that we have the computing power, the software tools and the automation to harness the data available to enhance manufacturing processes. Industry 4.0 may well have been around for years, but our poll shows it s still very much in its infancy when it comes to adoption within the UK manufacturing industry. While more than 60% believe Industry 4.0 will make a different to their business and almost one third (31%) are already taking steps into incorporating it into their business, worryingly, over two thirds (67%) admit that they don t yet understand what it is. DO YOU UNDERSTAND WHAT INDUSTRY 4.0 IS? 33% YES 67% NO DO YOU THINK IT WILL MAKE A DIFFERENCE TO YOUR BUSINESS? 31% YES 31% NO 38% YES, we are already taking steps to incorporate it into our business Industry opinion Manufacturing is a constantly evolving industry. From investments in technology, automation and digitisation through to improvements in productivity and products, the sector never rests on its laurels. But I believe it could do more to gear up to the opportunities presented by Industry 4.0. Creating awareness of opportunities and just what it means will help generate enthusiasm and action. Dave Atkinson, UK Head of Manufacturing, SME Banking, Lloyds Bank Commercial While the understanding of Industry 4.0 is improving, it is still relatively low almost three quarters of the industry don t understand what the term really means for them. Firms are working towards the same goals by investing in automation, robotics and other new technologies and manufacturing processes such as 3D printing. Many businesses, particularly SMEs, don t have the time or experience to get their business ready for smart factories and some new technology. They risk falling behind but getting expert advice and encouraging them to explore opportunities can help. Dave Atkinson, UK Head of Manufacturing, SME Banking, Lloyds Bank Commercial We are building the smart factories of the future; therefore, Industry 4.0 is core to our solution. There is a massive opportunity for companies combining robotics, AI, the cloud and IoT to become leaders in their respective industries and disrupt existing markets and business models. Sid Shaikh, Engineering R&D Manager, Ocado

9 ABOUT THIS INDUSTRY TREND REPORT This report was created for you by Subcon using statistics sourced from research commissioned by Subcon in association with The Engineer in March manufacturing industry professionals responded. Subcon is the UK s only dedicated event for contract and subcontract manufacturing. It covers all sectors and technologies and allows subcontract manufacturing buyers to source suppliers, benchmark capabilities, and form new manufacturing partnerships. Now in its 41st year, Subcon took place from 6-8 June at the NEC in Birmingham. SAVE THE DATE FOR THE NEXT YEAR! 5-7 JUNE The Advanced Manufacturing Show is the biennial event for machine tools, tooling and metrology equipment. It allows production professionals the opportunity to benchmark the latest manufacturing technology on the market to make their investment and purchasing decisions. The Engineer Design & Innovation Show is a showcase for the tools designers need to develop innovative world-beating products and bring them to market. It offers a one-stop shop for all the products and services required at every stage of the product design, prototyping and development cycle. Three shows. Three days. One unmissable sourcing opportunity.