In 2012 the UK was ranked 19th worldwide in terms of Robot density in the manufacturing sector with a level barely above the global average. As an example the UK automotive industry is functioning with half as many robots as used in Germany, often cited as the European gold standard bearer for automation1.
How has the UK been left behind? It boils down to a lack of investment compared to other developed economies and the Office of National Statistics (ONS) has stated that the UK’s lack of improvement in post war productivity is “unprecedented”2.
Germany and Japan are highly automated in manufacturing and if the UK were at the same level it is estimated productivity would increase by as much as 22% and long term employment by 79%. BMW’s Mini Plant in Oxford and Jaguar Land Rover’s plants at Solihull and Halewood are examples of soaring productivity as a result of heavy investment in robotics and automation3. But they are not the general rule in UK manufacturing. Bearing in mind this technology is open to all markets what must we do to increase our global competitiveness?
In this article the terms ‘Robotics’ and ‘Automation’ are used interchangeably as businesses will utilise the most effective technology to achieve their goal.
In late 2015 Barclays issued a report, ‘Future-proofing UK manufacturing’ based on economic analysis conducted on behalf of YouGov. It includes results of a survey of UK and German manufacturers and, by the use of economic modelling, shows the potential future impact of investment in Robotics and Automation1. The ‘top line’ suggests that if the UK invested £1.24bn in robotics and automation over the next 10 years it could add £60.5bn to the economy1. But how do those statistics impact an average UK manufacturing business and what has stopped them investing in automation?
Some key barriers to investment identified are:-
- Lack of funds for short and long term investments
- Prioritising other capital investment projects
- Concerns over the level and time of ROI
- Lack of support and advice about making the decision to automate
The size of business impacts the number investing, for example:-
- 71% of businesses with a turnover >£10m have invested in Robotics and Automation
- 21% of businesses with a turnover <£1m have invested in Robotics and Automation
Finally the type of business impacted the level of investment.
Sample business sectors with higher levels of investment in Britain:-
- Heavy Industry
- Medical Devices
- Building Products
- Automotive and transport
Sample business sectors with lower levels of investment in Britain:-
- Printing and Packaging products
- Textiles and clothing
- Wood and paper products
The trend is for businesses to increase investment in the next 2-3 years with the focus on improving efficiency and output. This includes reducing production time, improving quality and plant flexibility which can result in a 20% increase in productivity3. However, overcoming the barriers to investment and implementation can be a challenging prospect in addition to the daily demands of a manufacturing facility. Businesses want good technical support from their suppliers throughout the process from knowledgeable and responsive staff.
For smaller businesses the dilemma can be identifying the optimum time to invest and accurately estimating the period to achieve full return on investment (ROI). The Government is maintaining the Annual Investment Allowance (AIA) for 2016 at £200,000 which although unlikely to be a sufficient incentive to make a business ‘take the plunge’ it may be enough to make the first years’ tax bill less painful4! What is clear is that businesses, irrespective of size, are looking to the government for financial support in the form of grants and loans.
The new Prime Minister, Theresa May, is promoting a ‘Modern Industrial Strategy’ for Britain with a focus on research and development and she has committed the Government to significant investment. In addition the Government will launch an “Industrial Strategy Challenge Fund” to back priority technologies such as robotics and biotechnology5. However, many UK businesses believe that the Government should do more to help existing businesses improve their competitiveness in the global arena through Automation.
Is your business automated? If so, how did you find the implementation process? If not, what are your plans for automation? We’d love to hear your thoughts so give us a call on 01865 883508 or e mail us at firstname.lastname@example.org.
1Barclays Corporate, 2015, Future-proofing UK manufacturing. [pdf] Available at: https://www.barclayscorporate.com/content/dam/corppublic/corporate/Documents/research/automation-report.pdf [Accessed 21 December 2016].
2Office for National Statistics (ONS), 2015. Labour Productivity: Q4 2014. [online] Available at: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/bulletins/labourproductivity/2015-04-01 [Accessed 21 December 2016].
3The Manufacturer, 2016, Annual Manufacturing Report 2016. [online] Available at: http://www.themanufacturer.com/reports-whitepapers/annual-manufacturing-report-2016/ [Accessed 21 December 2016].
4HM Revenue & Customs, 2015, Annual Investment Allowance: permanent increase to £200,000. [online] Available at: https://www.gov.uk/government/publications/annual-investment-allowance-permanent-increase-to-200000/annual-investment-allowance-permanent-increase-to-200000 [Accessed 21 December 2016]
5Prime Minister’s Office, 21 November 2016, PM Announces major researchboost to make Britain the go-to place for innovators and investors. [online] Available at: https://www.gov.uk/government/news/pm-announces-a-2-billion-investment-in-research-and-development [Accessed 21 December 2016].