December 2021

News 0 6 | Plant & Works Engineering www.pwemag.co.uk Annual Buyers’ Guide 2022 Britain’s manufacturers are calling on the Government to improve access to funding for small and medium-sized manufacturers to allow them to fulfil their true growth potential. New research, “Start up to scale up: Supporting SMEs to Grow”, recently published by Make UK, the manufacturers’ organisation, showed that if the 75% of Britain’s smaller businesses with lower productivity upped their game to the output of top 25% - UK GDP could see a boost of £270 billion, as estimated by the Bank of England. Some two thirds of SME manufacturers grow by re-investing past profits due to a lack of access to funds. But 31% say they would prioritise investment in developing products and expanding capacity if they were able to access appropriate new finance. The scale-up challenge for Britain’s manufacturers is different from the average business due to the cost of heavy-duty equipment and industrial real estate. Manufacturers’ investment cycles are longer, with growth slower than traditional firms. Profit from any investment takes longer to show with banks and lenders requiring to exhibit “patient finance” rather than just quick returns. Companies may even look like they are making a loss in the short term, until the investment benefit kicks in slightly further down the line. Make UK’s latest research finds evidence that the pandemic has changed how financial institutions are assessing risk before lending to SMEs by offering stricter conditions or asking for higher guarantees. The survey further uncovered that Government must understand that manufacturers need “heavy investment” to expand, with benefits seen over the longer term rather than short term gains. However, the long-term rewards are far greater than other sectors in the economy and this investment will create well-paid jobs across the whole of the UK. By focusing on the scale up of manufacturing firms, Government will help create jobs in those left behind areas. If this approach were to be coupled with easier access to land and improved infrastructure, manufacturers could expand into totally new parts of the UK where the industry has never traditionally been based. Over a quarter of businesses surveyed (27%) said that they could grow faster if Government helped them with improved access to overseas markets. Manufacturers would like to see the reinstatement of trade access programmes or immediate replacements to help them expand into new trading ventures. Stephen Phipson, CEO of Make UK, the manufacturers’ organisation commented: “Micro and SME manufacturers account for 99% of all manufacturers in the UK but they are being held back by a lack of access to funding, skills, physical space and exporting. Many of these issues are shared by other industries on the surface but when you get into the details it is clear the challenges faced by manufacturers differ fundamentally from the average SME. Manufacturers need access to higher levels of skill than most, they need access to finance to not only stay afloat but capital lenders that are willing to be patient before they see growth from any investment…” What is also been made clear is that the current level of investment in promoting and sign-positing to available support is not working. Three in five SME manufacturers remain completely unaware of the business support and finance that exists to incentivise growth. SMEs urge Government to create funding package Speeding up adoption of industrial automation and robotics can lead to dramatic improvements in productivity, according to a new report just published by experts at the Coventry-based Manufacturing Technology Centre and the Industrial Policy Research Centre, Loughborough University. “Robotics and Automation: A New Perspective” says that the slow uptake of robotics among British manufacturers, and a reluctance to invest in automation, has contributed to the country’s vanishingly small improvements in productivity in recent years. But investment in automation along with reshoring manufacturing operations, can lead to new opportunities for UK businesses. The report, compiled by MTC and IPRC experts with contributions from major players in the world of automation, says the UK is 24th in the world for robot density in manufacturing businesses, and lags behind in productivity as a result. But the technology to turn the situation around already exists. The priority is to improve the rate of adoption. The report, with experts from a wide range of fields contributing opinions and recommendations, calls for a renewed emphasis on the need to improve productivity through the use of automation, with manufacturers, research organisations, equipment suppliers and Government working together to help businesses improve their performance through the intelligent use of automation. The report also stresses the importance of independent advice to new users, particularly in the SME supply chain. In the foreword to the report, Dr Clive Hickman, chief executive of the MTC said, “While the UK was traditionally a leader in world manufacturing, our productivity has been surpassed by other countries and, if ignored, this gap will continue to grow. It is necessary to address the opportunities available within manufacturing to get back on top form and make advances available for businesses across the UK.” Mike Wilson, the MTC’s chief automation officer, said that the pandemic had exposed weaknesses in the UK’s extended supply chains leading to a recognition that there was a need to increase the resilience of UK manufacturing by increasing local content and Automation is key to improving UK productivity says new MTC report