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Manufacturers accelerating digital investments in productivity drive

manufacturers

Britain’s manufacturers are increasingly embracing the digital industrial revolution as it bids to boost productivity, improve energy efficiency and overcome supply chain shocks, according to a new report by Make UK and Infor.

Around 80 per cent of companies plan to increase digital adoption in the next two years; 40 per cent of companies say digital technologies have already boosted productivity within their business with two-thirds predicting further productivity gains; a third of companies say digital investments have improved energy efficiency and a similar number reduced emissions and while digital technologies are creating more job opportunities and higher skill levels a third of companies saying lack of digital skills acting as a barrier to investment.

Make UK is urging Government to protect vital digital support programmes in the coming Spending Round. These include successful schemes such as Made Smarter and Help to Grow Digital which would help SME manufacturers in particular develop digital skills and practices. In addition, to unlock greater innovation and ideas, Make UK is also calling on Government to accelerate further private investment in R&D by expanding the R&D tax credit to include capital equipment within qualifying expenditure.

According to Make UK, the current financial challenges and the increasing cost of energy are likely to drive this revolution even further, with the survey showing that manufacturers intend to increase their investment in digital technologies in the next two years.

As a result, more companies are moving to the ‘evolution’ stage of digital adoption which is where they are implementing changes to their processes, in particular to marketing, product design, manufacturing systems and finance.

However, the survey also shows a third of companies say that the biggest inhibitor to more rapid digital adoption remains a lack of technical skills within the business.

Verity Davidge, director of policy at Make UK, said: “Our economy is undergoing a profound digital transformation with the potential to transform our lives and economy, making it more productive, resilient, and sustainable. Those countries that are better prepared for these changes will benefit the most, with the companies increasing their investment powering through the challenges that lie ahead with greater productivity, better skill levels and reduced emissions.

“The key now is for manufacturers to unlock their potential on digital adoption which will be key if we want to invest and grow. In order to aid this process Government must protect vital support programmes which are key to enabling SMEs in particular along their digital journey.”

Andrew Kinder, senior vp of industry and solutions strategy at Infor added: “It’s encouraging to learn that those who have invested in digital technologies report that their investments have paid off and they felt better prepared to weather the storms. As smart products, automation and robotics are increasingly adopted, the data and insights these technologies drive out will yield yet further benefits for manufacturers who have put the digital foundations in place.”

According to the survey almost 80% of manufacturers have increased their spending on digital technologies in the last two years, with a similar number planning to do so in the next two years.

These investments are bringing major benefits to companies’ operations with two-fifths (40%) saying it has already improved productivity, a quarter (27%) saying it has brought better profitability and, three in ten (31%) brought greater labour efficiency. Almost one in ten companies (9%) said their productivity had improved by more than 50% as a result. Further gains are to be had with two-thirds expecting productivity improvements and over half better productivity.

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