Without a doubt, the manufacturing sector is the living, breathing heart of the UK economy. UK manufacturing generates 10.3% of UK GDP and over £360 billion of product sales. With a workforce of 2.7 million employees, 75% of manufacturers are currently targeting growth. So the UK Manufacturing sector in in a good position, but the vehicle for growth is something to bear in mind. Manufacturers are dealing with unprecedented change – the Internet, big data, digitisation, artificial intelligence, changing labour demographics. The robust and continuous evaluation of these core challenges is pivotal for success.
To this end, we continually seek out the insights of academics, industry experts and manufacturing leaders – in particular those running the medium-sized enterprises (MEs) in order to develop a deeper understanding about the aspirations, fears and challenges for manufacturing businesses. Our latest research has focused specifically on the leadership mindset and how this influences the ability of manufacturers to capitalise on new opportunities.
A modern ‘trailblazing’ mindset, whether possessed by individual executives or the board, is crucial in setting a company’s forward-thinking strategy, and implementing it. 78% of respondents in our Future Fit research say that they have the internal capability for implementing forward-thinking strategies, but while this is an encouraging figure, only 22% put the development of strategic plans at the top of their agenda. This begs the question – how can we encourage manufacturers to adopt a different mindset – is innovation the catalyst for change?
Having been brought up around my father’s small engineering business in the West Midlands I’m proud to remain involved during an unprecedented time of change and opportunity.
I strongly believe that success for manufacturers depends on developing a new ecosystem where sharing ideas is key – indeed our survey showed that only 58% of companies believe their business ecosystem is sufficiently resilient to cope with future disruption. New affiliations between researchers and trade organisations are offering support and guidance to industries that wish to innovate. There’s a benefit for all when bigger companies mentor smaller ones, and so at NatWest we are doing all we can to foster connections and create an environment where collaboration supports innovative ideas and commercial exploitation.
One of the ways we are doing this is through progressive mentoring, an ongoing programme to support the sector. An example of which is a partnership with Warwick Manufacturing Group - offering medium-sized manufacturing companies access to a workshop where they can understand how disruptive technologies are changing the sector, learn how business models can be positioned to meet future challenges, and rethink leadership and management to drive innovation in their business.
Output looks to remain strong through the rest of 2018 but the sector will continue to face similar pressures seen in other industries resulting from regulatory changes, Brexit, and a sustained challenge in the economy. It’s more important than ever that manufacturers receive the support they need to thrive in the future and I look forward to working with many of you during the next year.
Head of Automotive & Manufacturing