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Government announces £300m productivity-boosting innovation scheme

18 September: ICAEW welcomes a new government scheme that encourages the adoption of new technology in manufacturing.

The government has announced a new £300m scheme to encourage technological innovations to boost productivity in manufacturing. 

The Manufacturing Made Smarter Challenge, jointly funded by the government and industry, will award funding for ideas that incorporate cutting-edge technology such as robotics, AI and automation. In addition to boosting productivity, the scheme aims to encourage the creation of jobs, the reduction of carbon emissions and a cut in prices for customers.

The first round of funding, totalling £50m, will be split across 14 projects involving 30 SMEs, 29 large enterprises and nine universities. The projects include the use of robots, sensors and automation to improve accuracy when welding parts together (WeldZero), augmented reality headsets for engineers to help guide them through repairs (Smart Connected Shop Floor) and a data-sharing platform for the food and drinks industry (The Digital Sandwich).

“Increasing productivity is vital for any business, and having the right new technologies in place can help manufacturers make better products to compete and thrive,” said Business Secretary Alok Sharma at the scheme’s launch. “By helping manufacturers to reduce costs, cut waste, and slash the time it takes to develop their products, this multi-million-pound uplift will help fire up the cylinders of productivity as we build back better from the pandemic”

Iain Wright, ICAEW’s Director for Business and Industrial Strategy, strongly welcomed the new scheme. “This is exactly the sort of policy measure BEIS needs to put in place together with industry to ensure the UK manufacturing base becomes more productive and therefore more competitive.”

Improving productivity at a national level is crucial for raising living standards, but is also vital at a company level, Wright explained. Rising productivity levels ensure a manufacturing firm is more resilient and less prone to business failure at a time of downturn. “In this context, this announcement is very timely, as it will go some way towards enabling UK-based manufacturing firms not only to survive the current difficult and distressing trading conditions but to prosper and thrive the modern, digital-based and globally competitive manufacturing.”

The use of robotics in UK manufacturing is the lowest among the top ten economies. This needs to change to ensure future success, said Wright. “Use of automation is often criticised as a precursor to significant job losses, but this doesn’t have to be the case. The workforce should be upskilled to use such digital tools, thereby creating high-skilled and well-paid jobs. While I commend the government for this announcement, it needs to be accompanied by a strategy to ensure the manufacturing workforce is given the training and support to use these new methods.”