Gerald Law, CEO, InnovationDB

The attendance of 870 industry leaders at this year’s National Manufacturing Conference illustrates the importance of the manufacturing industry for the UK, and the uncertainty playing on the minds of executives. Brexit was, inevitability, at the forefront of discussions about UK Manufacturing’s place outside of the EU and the future of the UK’s industrial sector. However, many felt that the ensuing fall of Sterling has been beneficial to UK manufacturing. Beyond Brexit, however, there were several other interesting insights to come from this internationally acclaimed event.

The productivity gap

The UK, despite being the world’s 5th largest economy, has been listed as 17th on the global productivity league table. To my mind, the productivity gap between the UK and its major manufacturing rivals comes down to two things:

• Poor infrastructure, particularly in the north of England. Greg Clarke, Secretary of State for Business, Energy and Industrial Strategy, assured attendees the industrial strategy would address such North-South imbalances, although evidence seemed lacking.
• Underinvestment by companies in labour saving technologies. EEF researchers found that only 50% of manufacturing businesses are currently planning to invest in the near future. Juergen Maier, CEO of Siemens UK, commented UK productivity would rise by 20% if we invested in automation at similar rates to Germany and Italy.

Not everyone was worried about the gap, however, seeing it as just one tool to drive competitive advantage. I, for one, think that innovation in processes and products is a tool for competitive advantage – and on occasion this can be harder to achieve if large investment in plant and machinery requires that products and processes are kept stable until the ROI has hit a pre-determined metric. A business may want a new product to fail quickly, if it is ultimately going to fail.

Education

Crucial to securing a reputation as a leading manufacturing location will be the education of a skilled workforce. Clarke said “We should build a technical education as good as any other nation.” This need has been echoed with Philip Hammond’s recent announcement of “T-levels”, the technical version of A-levels, which plan to put technical education on an equal footing with academic studies. It seems to me that in search of a more balanced society (much to be admired) there has been a trend to push studies that are often labelled as ‘white collar’, when the real source of societal change would be greater respect for successful ‘blue collar’ businessmen and women.

UK as the place to manufacture

Juergen Maier, leader of the industrial digitalisation component of the Industrial Strategy, said factors such as cost, labour flexibility, work ethic and high quality university research potentially make the UK a great place to manufacture. However, Stephen Cooper, KPMG, added that better integration of government departments would be necessary for the sector to realise its full potential. I would like to ask Mr Maier whether “cost and flexibility” in the work force make the UK a great place to work in manufacturing, as well to be a manufacturer. Long term, the jobs need to be appealing if bright motivated people are going to choose manufacturing over other possible careers.

Overall…

There is a clear gap between manufacturing and investment in technology which slows progress. Ongoing governmental uncertainty in the UK and the rest of Europe is unlikely to ease this. However, as Alison Rose, CEO of commercial and private banking at NatWest commented, “One of the great strengths of business in the UK is the level of pragmatism. You’ve just got to get on and do things.” Uncertainly brought by Brexit cannot be denied, but allowing business plans to stagnate won’t help you stay ahead.

MWC has, in previous years, allowed the hype and excitement around innovation to dominate the event while glossing over how and when these products may become a reality. In 2017, the sheer size of the Congress, attracting over 100,000 people, and the conversations in the hall pointed the other way. After four days of seeing innumerable connected cars, virtual reality technologies, new handsets and app ideas, 3D printers and privacy protection concepts, a few take home messages were however apparent.

5G

As expected, 5G was a hot topic at MWC with its capacity to way mobile works and how it is used, enhancing medical services, con revolutionise our already highly connected world. O2 has conducted a survey finding national 5G coverage would directly contribute an additional £7billion a year to Britain’s economy by 2026. Among those asserting the merits of 5G was Stéphane Richard, CEO of Orange, assuring delegates it would be faster, lower energy and require smaller masts. His confidence was echoed by SK telecom's Alex Jinsung: ‘the problem will be to deliver what we are promising; I am very confident that is achievable’. Not all in attendance supported this optimism however. Liberty Media, in attendance at the conference, have scoped the cost of 5G infrastructure in the USA at $250billion, a cost they feel will be matched in Europe, not helped by the need for cooperation between 27 different governments.

Virtual Reality (VR)

Virtual, or augmented, reality is a technology that its easy to get excited about. Rightly, people at MWC didn’t buck the trend. The exhibitions were many and varied, such as Leap Motion’s mobile VR platform using hand-tracking technology, removing the need for wires and remotes. There was also discussion around the applications of VR beyond entertainment, in industries such as healthcare, education and retail. For example, Sharecare, applying VR to patient care. This is a space to watch.

Cyber security

The demand for high-security authentication is rapidly growing. David Rennie, Industry Engagement Lead, UK Digital Cabinet Office, expressed his feelings that the internet’s lack of built-in identity ‘layer’ was finally reaching the critical point where fraud threatened to stunt commerce. To those attending MWC, the answer seems to be Mobile Connect, a secure universal log-in solution developed by GSMA, via which no personal information is shared without permission. This technology has gained significant traction, and big industry players such as Santander are showing interest.

The Future…

Without the 5G infrastructure in place, we are basically restricted to well-trodden paths – very little can be done to build more exciting apps or more compelling user experiences. Self-driving cars, for example, really will require all that extra bandwidth to become safe enough to be widespread. Without a genuinely compelling form of flexible electronics, devices are only ever going to be iterations of existing products (nicer camera, marginally longer battery life etc.). What MWC lacked was something game-changing. When your phone charges itself as you walk down the street because your clothes are rigged with flexible charges and battery life is an irrelevance, when the mage-speeds of 5G mean your car can triangulate to hundreds of neighbouring objects – as well as other cars – all the time, then a step change can occur.