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The manufacturing sector is undergoing a transformative change powered by the Fourth Industrial Revolution. Technologies such as automation, AI and digital innovations are reinventing products and production processes, reshaping the UK economy for the better. While some businesses are already reaping the rewards, many manufacturers have yet to embark on their digital journey. The benefits of digitalisation are staggering, driving up productivity and slashing operational costs, particularly for SMEs. Given these advantages, why aren’t more manufacturers seizing this exciting opportunity?

The truth is, that barriers exist. These barriers typically fall into four categories: Skills, Funding, Knowledge and Expertise, and Culture and Leadership. Access to skills is a significant barrier for manufacturers aiming to digitalise. To leverage digital technologies, manufacturers must continuously adjust their talent strategies to reflect the need for digital skills that must be obtained and refreshed throughout an employee’s career. This ranges from basic digital literacy to advanced technical skills necessary for automation and new technology deployment.

1. Invest in Skills Development

Manufacturers are prioritising digital skills investment, focusing on areas like IT and software management, cybersecurity, and data analysis. According to the "Make UK Report 2030 Skills: Closing the Gap," 58% of companies plan to recruit engineering technicians, and 61% aim to recruit production and process engineers. This shift underscores the essential use of data and the need for employees trained in the latest digital technologies. More than a quarter of companies now say they need data analysts, and 11% plan to employ data scientists to drive automation changes.

However, technical skills alone are not enough. The acceleration of digital technologies is reshaping businesses globally. The World Economic Forum’s "Future of Jobs 2023" report highlights that analytical thinking, creative thinking, and AI and big data skills will be in high demand by 2027. Leadership, social influence, and lifelong learning are also crucial. Despite the need, six in ten workers will require training by 2027, yet only half have access to adequate training opportunities.

2. Enhance Financial Support for Workforce Training

In our Maker’s Manifesto 2024, we call for improved support for workplace training through more generous tax relief. While manufacturers benefit from tax measures supporting investment in physical capital, similar incentives for investment in human capital are lacking. The next government should evaluate the effectiveness of current tax reliefs on training and consider better financial incentives for employers to invest in workforce development.

3. Streamline Skills Pathways and Introduce a Mentorship Program

Despite efforts to simplify the education landscape for young people, many publicly funded training programs for working-age adults suffer from low awareness and employer take-up. The next government should review these programs to design clearer pathways for employers and employees to access upskilling and retraining options.

Additionally, leadership and management skills are top priorities for manufacturers. The current Help to Grow: Management scheme, while well-intentioned, falls short. With an ageing workforce and increased retirement rates post-pandemic, the next government should explore a mentorship program to develop the next generation of manufacturing leaders.

In conclusion, as we move towards a more digital and automated future, the new government must prioritise skills development, financial support for training, and streamlined pathways for upskilling. By addressing these areas, we can ensure the manufacturing sector remains competitive and prepared for the future.

Read more to see key priorities for the new government in the skills agenda in our Maker’s Manifesto 2024.


Blog / Make UK