FEBRUARY 2019 PRODUCTIVITY
with the
overarching goals
of increasing growth and
improving productivity.
Ensuring transport infrastructure can
cope with an increase in freight over the coming
years will be equally important. The 2017 Industrial
Strategy whitepaper set out the government’s
commitment to make the UK “a world-leader
in shaping the future of mobility”. That means
moving goods more efficiently, as well as people.
After Britain leaves the EU, easy access
to ports and airports will be vital to national
prosperity, given the likely importance that
exporting will play in a post-Brexit UK economy.
In the medium term, ensuring freight can move
smoothly across our highways network will be
vital and the rollout of smart motorways and new
roads such as the proposed Oxford to Cambridge
Expressway are central to this.
In the long-run, securing a modal shift to rail
will release capacity on our roads and help the UK
to meet its environmental obligations. Projects
such as High Speed Two, Northern Powerhouse
Rail and the £1bn investment in rail across the
West Midlands will help improve the reliability
of just-in-time supply chains and enhance
Britain’s appeal to international producers.
Improving skill levels will also play a key
role in evolving the factory of the future. The
UK cannot – and should not – hope to compete
on low-value goods. Instead, producers are
increasingly investing in high value, advanced
manufacturing in Britain:
working with universities
on significant research and
development projects, whilst
sourcing cheaper materials
elsewhere in the world. It is
this high-skill, R&D-focused,
collaborative approach which
sets our economy apart from
many others across the world.
However, skills shortages
are hampering investment
and holding back productivity
growth: as EEF reports, “the
inability of manufacturers to
find workers with the right
skills has been a persistent
limitation on the sector’s
growth prospects”.
There is little point
in producers investing
in productivity-boosting
technologies if employees
do not have the technical
skills to utilise them. Figures
showing a 28% decrease in
apprenticeships over the
last year are concerning, and
recently announced reforms
to the Apprenticeship Levy are
unlikely to dramatically improve
its performance. It is vital that
there is a viable alternative to
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university for young people
looking to acquire the advanced
skillset manufacturers will
require, and more work needs
to be done to co-ordinate the
needs of employers with the
courses being offered by further
education providers.
The Brexit debate of the past
three years has shone a welcome
light on the manufacturing
sector, as evidenced by the
return of industrial policy to
the political debate. The coming
years will no doubt provide
plenty of opportunities for
manufacturers as well as its
challenges. Whilst the days of
endless assembly lines may
be long gone, manufacturing
remains crucial to the UK’s
economic vitality.
The industry is changing,
and we are likely to see
manufacturers become more
flexible and adaptable to the
opportunities digitalisation and
automation brings. Key to this
is ensuring the government acts
swiftly to provide a favourable
business environment and
support the UK’s most
productive sectors.
UK productivity
will not improve
without a strong,
industry-wide
effort
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