NEWS n 5 Support for UK SMEs could close tech gap and add £150bn to GDP A NEW REPORT FROM Make UK and Sage is calling on the Government to provide targeted funding, training and innovation support for SME manufacturers to help close the gap between the UK and its rivals in adopting digitalisation and automation technologies. They say that such backing could add £150bn to GDP by 2035. They point to other countries, such as South Korea, Singapore, Switzerland and Germany, where targeted support has transformed SME manufacturing. In Korea, for example, a programme including tax incentives and training programmes has eliminated skills shortages in digital innovation, boosted productivity by up to 25%, and cut defects by 27%. Make UK and Sage argue that the UK’s target of attaining a digitally literate workforce by 2025 – as laid out in the recent Industrial Strategy – is not ambitious enough. The new report – called Making it Smarter: Global lessons for Accelerating Automation and Digital Adoption in UK Manufacturing – points out that over the past two decades, UK manufacturers have plummeted dramatically down global automation tables. In the past ten years, for example, the UK has slipped from second to fifth place in the in the Global Innovation Index. And Britain is now languishing at 24th position in global robotic density, with just 112 industrial robots per 10,000 workers – half the EU average. In addition, the report says, the training of British people with the relevant digital skills to take advantage of innovative technology is well below what is needed to catch up. The 28-page report reveals that almost half of British manufacturers identify a lack of technical skills as being the biggest hurdle to them improving their use of advanced technologies. Those projects that do start, often stall after the implementation stage, because companies cannot find the help and advice needed to make the technologies work well. Countries where all SME innovation funding and advice is held under an easy-to-access “umbrella hub” have dramatically better success rates. www.drivesncontrols.com September 2025 The Government’s recent Industrial Strategy aims to create a digitally literate workforce by 2035, but “we can’t wait for this to happen”, Make UK warns. It is calling on the Government to embed targeted funding for the digital skills needed in manufacturing and engineering to accompany the £100m it has already set aside for engineering skills. For decades, the report points out, South Korea has been undergoing a successful transition from legacy production methods to advanced digitalised factories. For example, the government provides SMEs with incentives such as easy-to-access 30% R&D tax incentives for companies investing in semiconductor manufacturing, turning Korea turning into a global leader in this area. The Korean government also committed to training 40,000 people to operate automated production systems and there are now no skills shortages in technical and digital innovation in the country. Firms adopting smart technologies have seen a 25% rise in productivity, and a 27% drop in defects. Switzerland, with a population similar to London’s, has a manufacturing output worth around £150bn – not far off the UK’s £217bn. Its national strategy prioritises advanced technologies, SME competitiveness, and long-term innovation. The Swiss Innovation Agency typically funds up to 50% of eligible project costs for SMEs, while larger firms qualify only if they partner with smaller ones. “Time and again, we hear from small and medium-sized manufacturers that they’re keen to adopt new technologies, but are being held back by fragmented support, complex funding systems, and a lack of accessible, appropriate digital skills training,” says Make UK’s chief economist, Seamus Nevin. “If we want to unlock a £150bn boost to UK GDP by 2035, we must make it easier for SMEs to adopt automation and AI. “Other countries are accelerating ahead by putting smaller firms at the heart of national strategies – with long-term support that’s simple to access, reliable, and rooted in real business needs,” he adds. “From South Korea to Switzerland, governments have created clear, SME-focused strategies that simplify innovation funding, offer long-term tax incentives, and ensure every business can access practical support. “These policies work not just delivering improvements in economic growth, but also in more environmentally friendly processes with fewer defects, higher profit margins, and creating more higher skills, better paying jobs.” https://drivesncontrols.news/un2tllu5 “Other countries are accelerating ahead by putting smaller firms at the heart of national strategies – with long-term support that’s simple to access, reliable, and rooted in real business needs” The Make UK / Sage report suggests ways the UK could close the gap with its high-tech rivals For more of the latest news visit www.drivesncontrols.com
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