Why this is important to Wisconsin businesses: Brexit is shaking up the sector's existing supply relationships, creating opportunities for new entrants.
The UK is the ninth-largest manufacturing nation in the world, with the sector employing 2.7 million and contributing more than £192 billion annually to the economy, and accounting for 45% of the UK’s total exports. The country is a research and innovation powerhouse, ranked in the top five on the Global Innovation Index in 2019, and is home to the most productive science base in the G7. Two-thirds of all UK research and development is undertaken in the manufacturing industry, and for the UK’s high-value manufacturing sectors such as pharmaceuticals, automotive, aerospace, chemicals and electrical/electronic industries, this excellence in research and innovation is vital to global success.
Until recently, the UK was a slow adopter of robotics in manufacturing, but there are now more than 100,000 advanced manufacturing companies, 4,000 of which are expected to invest in robotics in the near term to further improve automation efficiencies, with the potential to add as much as £275 billion to the national economy each year. The advanced engineering sector has experienced substantial growth in composite materials, low carbon technologies, digital process engineering, additive manufacturing, and robotics and autonomous systems. The UK government has invested £200 million since 2011 to accelerate the development of new smart factories, adoption of advanced manufacturing technologies and digital transformation. Most recently, the High Value Manufacturing Catapult has been established to drive further innovation in manufacturing, and has supported more than 4,600 projects, targeting over £2 billion in new R&D activity in the UK between 2018 and 2023, and spanning applications ranging from automation and biologics to castings, composites, digital manufacturing, and power and energy storage. The UK’s Advanced Manufacturing Research Centre is a world-leading research and innovation center comprising 110 industrial members, including Boeing, Rolls Royce, Airbus and BAE Systems.
The UK’s decision to leave the EU has already had an impact on the manufacturing industry, and the final trade deal between the UK and the EU will further impact manufacturing firms. Steep drops in domestic production have already registered in pharmaceuticals, machinery, printing and fabricated metal products. Nearly half of UK exports and imports of manufactured goods go to, and come from, the EU, and Brexit means manufacturers may need to find new markets for their products, as well as new supply sources for components and materials.
In response to the COVID-19 pandemic, Prime Minister Boris Johnson recently announced a £5 billion “New Deal” to reignite the British economy and stimulate employment by building homes, schools and hospitals; investing in town centers; and upgrading roads, all of which will require materials, services and equipment. UK manufacturers are frequently dependent on imported parts and materials, and to achieve the government’s industry growth targets, the UK’s advanced manufacturing industry will be looking for competitive supply sources.