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UK must speed up and skill up to co-drive fourth industrial revolution

UK manufacturing is falling behind the pack leaders in the revolution to apply digital technologies to industry, says a government-sponsored report led by Siemens’ UK CEO

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A government-sponsored report on the potential for applying digital technologies to the UK’s manufacturing sector has identified what is blocking adoption and recommends reskilling one million workers over five years.

Dubbed the Made smarter review, the 231-page report is part of the government’s industrial strategy initiative, which was set in train in January 2017.

Juergen Maier, UK CEO of German engineering company Siemens, chaired the review – originally called the Industrial digitalisation review. The report estimates the benefits to the UK economy from applying digital technology to manufacturing, with support from government, to be about £455bn.

It says this would increase manufacturing growth by 1.5% to 3% each year, creating an estimated gain of 175,000 jobs and reducing carbon dioxide emissions by 4.5%. Industrial productivity could be improved by more than 25%, it says.

In a foreword to the report, Maier says: “I have been disappointed that we haven’t reached our full potential and have left too many of the opportunities arising from the third industrial revolution to other nations.” But he added that he believes the UK can “take a much more significant leadership role and a much greater slice of the opportunities arising from the fourth industrial revolution”.

In an interview on BBC Radio 4’s Today programme, Maier said: “This is the beginning of a new industrial revolution. The opportunity is to invest, to create new jobs, and export more.”

He said there is a lot of government support to rebalance the economy towards manufacturing and exports, and towards the north of England already, but that the transformation the report is calling for “will not happen overnight – the big thing is for industry and government to commit to a partnership”.

Maier said that while artificial intelligence (AI) and robotics will displace some jobs, a big element in the report was to call for the upskilling of one million manufacturing workers to manage and program robots. He added that the greater friction with respect to the European single market that Brexit will bring makes it “all the more important to focus [SME and large company] investment even more on this fourth industrial revolution”.

What is the fourth revolution?

The first industrial revolution took place in the 18th century, starting in Britain. The second was a late 19th and early 20th century phenomenon, driven by electrical power and mass production, and featured telegraphy and telephony. The third industrial revolution is associated with mid- to late 20th century computerisation.

The fourth revolution, according to the report from the Department for Business, Energy and Industrial Strategy, is shaped by the “integration of … digital and physical technologies into production and logistics”. These technologies include “artificial intelligence, the internet of things, robotics and analytics”, it says.

The report asks whether the UK can be a leader in what it calls “industrialisation digital technologies”, and cautions that other countries are already stealing a march with “coherent government strategies … for example, in Germany (Industrie 4.0), China (Made in China 2025) and the US (America Makes)”.

The report, which took input from some 200 organisations, including GSK, Jaguar Land-Rover and the Royal Academy of Engineering, identifies three structural hindrances to the UK’s progress in the so-called fourth industrial revolution: no cross-sector national leadership; poor SME adoption and a lack of digital engineering skills; and insufficient capital support for IDT startup companies.

Read more about the fourth industrial revolution

But, says the report, the greatest barrier to IDT adoption is the lack of skills. “There is already an identified shortage of digital skills in the UK economy, and the demand for these skills is projected to increase,” it says. “It has been predicted that, within 20 years, 90% of all jobs will require digital skills. This means that approximately 16.5 million people in the UK are going to need to be skilled to become ‘digital workers’ and ‘digital makers’. Yet there are 10.5 million people currently lacking basic online skills, the majority of whom are aged over 55.”

The report also points out a disjunction between cutting-edge research in the UK in electronic technologies and the relative lack of uptake in manufacturing. “Many of the ElecTech technologies essential to the future of automation and robotics have industry leaders here in the UK, including silicon chips (ARM), sensors (Renishaw), AR/VR (Imagination), AI (GraphCore), power (Dynex Semiconductor) and communications (5GIC Surrey; CSR, now part of Qualcomm),” it says.

“The UK already has world-leading research in robotics, in fields as diverse as healthcare, subsea autonomous vehicles and vacuum cleaners. Groups such as the Edinburgh Centre for Robotics, Sheffield Robotics, Bristol Robotics Lab and Imperial College’s Hamlyn Centre are all recognised as significant contributors and innovators in global robotics research.

“However, overall, the uptake of manufacturing automation in the UK is disturbingly slow compared to most other developed nations. The UK has only 33 robots per 10,000 employees compared to 93 for the US and 170 for Germany, which invests 6.6 times more than the UK in automation, although its manufacturing sector is only 2.7 times the UK’s in size.”

Recommendations

Among the recommendations the report makes to overcome these blockages is to create a network of digital research centres in artificial intelligence, machine learning and data analytics; additive manufacturing; robotics and automation; virtual reality and augmented reality; and the industrial internet of things (IIoT) and connectivity (5G, LPWAN, and so on).

The report also calls for a national skills strategy and implementation group (SSIG) under the governance of a “Made smarter UK commission (MSUK)”. This would aim at reskilling and upskilling one million workers over the next five years.

The MSUK itself would, said the report, be “a national body, comprising industry, government, academia and leading research and innovation organisations, with a chair from industry and a ministerial co-chair”.

The report warns that if the UK gets its approach wrong to digitising the manufacturing sector, “we risk further deindustrialising our economy, and becoming ever more reliant on imports – but get it right, and we will have found the key to rebalancing and strengthening our economy”.

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