UK鈥檚 Industrial Strategy: advanced manufacturing calls on more funding to bridge skills and tech gap

Ahead of the long-awaited for advanced manufacturing, 91探花 calls on the government to support the sector and strengthen the supply chain by investing in innovation and skills development, positioning the UK as a global leader.

The UK’s manufacturing sector directly contributes over £200bn every year to the economy*. In 2023, it accounted for 40% of UK exports at a value of £350 billion** and represented 9.3% of total Gross Value Added (GVA). Estimates also suggest that manufacturing indirectly contributes to over 20% of UK GDP. 

Access to skilled labour remains a challenge, according to more than half of manufacturers (57%)***, with 63% saying there are not enough young people with the necessary skills. Despite labour constraints, the UK’s advanced manufacturing sector is a key global competitor, ranked in the top five**** in the Global Innovation Index in 2024.

Mike Thornton, National Head of Manufacturing at 91探花, said: “The industrial strategy is centered around growth, and with advanced manufacturing accounting for 40% of UK exports, it’s no surprise to see it feature as a growth-driving industry. The sector could also be a genuine tool for levelling up the UK, as the majority of manufacturing jobs are outside of London and the South East. We are world leaders in innovation, but we need to be more ambitious in accessing global investment for net zero and digital transformation to secure long-term competitiveness, innovation and growth. Investment therefore needs to be focused on innovation, transforming the supply chain and developing skills. 

“However, there are also challenges to overcome. The UK is regarded as one of the slowest digital adopters, with manufacturers held back by lack of digital skills and a reliance on traditional methods. As a labour-intensive sector struggling to recruit the next generation of manufacturers, new technology is required to improve productivity, bridge the labour and skilled work gap and strengthen diffusion of learning. Adoption of new technologies will also widen the scope of employment opportunities and encourage individuals with different skillsets to pursue a career in manufacturing. The Growth and Skills levy should boost this recruitment drive and deliver 10,000 more apprenticeships. But, there equally needs to be attention on upskilling the existing workforce across businesses of all sizes, ensuring everyone keeps pace with evolving technology.”

He added: “Looking at the bigger picture and the government’s growth plans, the sector is starting from a position of relatively low investment, so deciding whether to focus on strengths or weaknesses is a balancing act. Due to the interconnectivity with clean energy and defence sectors, perhaps focusing on strengths is a better strategy to secure internationally mobile investment conducive to economic growth.” 

Mark Crawford, Business Transformation Director at 91探花, added: “As the need for growth in the UK continues, the advanced manufacturing sector, and its links to clean energy and defence, is becoming increasingly seen as the key to unlocking potential. We need to remember that growth for these organisations is not limited to domestic activity but is also going to come from increased exports. With that in mind, international partnerships and trade will be both an opportunity and a threat to growth.

“In today’s markets, trade tariffs are going to become as important to advanced manufacturing as incentives. This requires a clever approach to structuring supply chains to allow for advanced manufacturing to continue to be UK-centric. Companies can then work with the government to address the transition to new technologies and techniques, and the knock-on effect of how the workforce is trained and equipped, in order to deliver the products and services that are required.”