SIEMENS INDUSTRY SECTOR FD URGES CONTINUED GOVERNMENT SUPPORT FOR UK MANUFACTURERS - AND WARNS OF CHALLENGES AHEAD
31/01/2011 Siemens Industry Automation & Drive Technologies
Robin Phillips, financial director at Siemens Industry UK Group, has called upon the Government to continue its commitment to the revival of the UK manufacturing sector as it faces up to a challenging future - regardless of the recent publication of positive UK figures showing that the manufacturing sector grew at its fastest rate for 16 years.Speaking recently at a gathering of large, medium and small-sized manufacturing and engineering companies at the annual Siemens Process Automation User Conference in York, Phillips urged the current coalition Government to continue the previous political administration's objective of 'rebalancing' the UK economy. He believes the current political leaders have a good foundation on which to base future strategic decisions and practical support for UK business. He says:
"It is a fact, despite a reduction since our heyday that the UK remains the sixth largest manufacturing nation in the world, with exports worth some £150bn annually. The sector employs over 2.8 million people and it is central to our prospects if we are going to return the country's economy to health in the years to come."
A number of initiatives were developed under the last Labour Government, in particular the Manufacturing Strategy and Phillips says this important work needs to be reinforced and encouraged, but warned of many challenges and important factors which would influence whether the UK's manufacturing sector could develop once more as a leading worldwide force. He comments:
"With manufacturing accounting for 13% of UK GDP, it will be interesting to see what the present Government means when it talks about the aim of re-balancing the economy away from the dominant financial and service industries. The jury is still out in terms of how much and by when? But I welcome the realisation from our political leaders that the efforts underway must continue to be supported. I am also heartened by recent figures which point to a strong fight back by the manufacturing sector - despite the harsh economic climate that has prevailed since 2007."
Phillips continues: "There are a number of key challenges that face the manufacturing and engineering community. Though they may overlap, nonetheless each one will be crucial. They include the need to address the issue of a potential shortage of engineers in the years to come and the requirement both to up-skill the current workforce as well as replacing the skills of an engineering generation that will retire over the next couple of decades. We need to deliver 600,000 engineering apprenticeships over the next 10 years, as well as vastly increasing the numbers of current engineering students.
We will see only 5% of UK students taking a university engineering course this year. In comparison, China and the USA develop significantly more engineering graduates on an annual basis to ensure an engineering skills vacuum does not develop. Together, the Government and the business community need to harness their thoughts to encourage schoolchildren to see the merits of 'making things', and to view engineering as a rewarding and stimulating career choice."
Phillips addressed some important finance and investment-related issues: "Despite the financial restrictions in place due to the recent downturn, it is clear that continued and increased investment levels remain vital for both research and development initiatives and hi-tech manufacturing processes. Government grants and the new Technical Innovation Centers are a good start, but the green industries of the future such as electric car manufacture and wind and solar energy developments need to be supported.
The Government needs to ensure companies seeking to exploit such technology do so here in the UK and not in other competing countries. Such support by Government could also be shown by reviewing the current UK tax and regulatory regimes as they apply to innovative manufacturing businesses. Perhaps thought needs to be given to tax incentives for SMEs, as well as simplifying the legislative environment in which we expect companies to operate?"
Finally, Phillips called upon the UK banking sector to get behind its manufacturing counterparts to support the new and growing innovative companies that will fuel future economic growth and create jobs in the UK. He says:
"The advent of the Green Investment Bank and the newly formed Local Enterprise Partnerships will be very important in helping companies access funds as they need them. The banks should show support to manufacturers of all sizes, particularly SMEs, as their assistance and encouragement will help drive the ambition and innovation of the UK's manufacturing base as it competes on a global stage against the traditional powerhouses - as well as the new emerging markets."
For more information, contact:
Alison Vasey
Siemens plc
Tel: 0161 446 6656
Alison.Vasey@siemens.com Web: www.siemens.co.uk/automation
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