Manufacturing has a strong future in the UK, but Government policy has not caught up with the changing dynamics of the sector, says the new chairman of the CBI’s Manufacturing Council.
In his maiden speech, Andrew Reynolds Smith, executive director of GKN, said that the manufacturing sector deserves more credit for its successes in recent years, and for its key role as part of the wider economy.
Although the government has helped to provide a stable business environment and a flexible workforce, and is moving in the right direction on skills, the industry needs to do more to promote itself, Reynolds Smith said, adding that policy-makers should help to create a globally competitive, modern manufacturing sector in the UK.
Speaking at a CBI event, Promoting UK Manufacturing in the 21st Century, Reynolds Smith said that manufacturing is "misunderstood". Most people think that it is a small, declining sector, owned by foreigners and on the brink of transferring to China. But, in fact, there are more than 150,000 manufacturing businesses in the UK, turning over some £500bn.
"Last year they accounted for 60% of UK exports, worth £220bn - which is an increase on the previous year," he pointed out, "and 21 of the FTSE 100 manufacture goods, including pharmaceuticals, machinery and food."
Reynolds Smith stressed that manufacturing is not a stand-alone function concerned solely with making products, and that many businesses that manufacture are also involved in researching, marketing, delivering and servicing their products.
"Manufacturing is no longer just about the factory floor," he continued. "We must stop thinking of manufacturing companies, and think of `businesses that manufacture`. Research creates new ideas, which are then developed and designed into products, which have to be made, sold, shipped and serviced.
"In today`s environmentally conscious world, businesses are increasingly responsible for the whole lifecycle of their products, including disposal and recycling at the end of their life," Reynolds Smith said. "To be sustainably successful in manufacturing, we have to perform in every aspect of manufacturing, and to integrate that performance across the whole business.
"We must not be complacent," he added. "These are challenging times for businesses that manufacture. Competition is fierce and global, and government policy can mean the difference between success and failure, between growth and stagnation, between doing business here in the UK and moving it overseas.
"Manufacturing is changing rapidly," Reynolds Smith said. "If government is to play its part in enabling modern UK manufacturing to compete on the world stage, it needs to believe in manufacturing and understand that it has an important role to play. A good start has been made, but there is much left to do.
"Businesses must be strong enough to compete in export markets and they need support from government to break into them. UK Trade & Investment does some good work and it promises to do more, but it needs to deliver.
"We all need to pull together - industry and government, employers and employees, businesses and education - to work to ensure a successful future for UK manufacturing," Reynolds Smith concluded. "Our goal is clear and within reach: a vibrant manufacturing sector which is globally competitive."
Reynolds Smith, 41, is responsible for GKN’s powder metallurgy, off-highway and industrial distribution services.