United Kingdom-October 30, 2023, 09:00 AM
Lack of technical skills remains greatest barrier to further uptake
Key survey findings:
• More than half of companies are investing in artificial intelligence, machine learning and augmented reality
• Almost two in five companies are planning to adopt generative AI
• More than three-quarters of companies have invested, or are planning to invest, in automation
• But majority of companies believe UK is failing to match competitors
• Barriers to automation remain, including lack of technical skills, cost and workplace culture
LONDON – October 30, 2023 – Manufacturers are set to see a surge in the use of artificial intelligence (AI) and machine learning as they push for greater automation and improvements in productivity, efficiency and quality, according to a new survey published today by Make UK and Infor.
The survey, published ahead of the Summit on AI at Bletchley Park this week, shows that companies are increasing their investment in automation across a broad range of technologies and functions from manufacturing processes to product design and development. These investments are set to accelerate in the next two years, leading to an increase in higher levels of skills and a fall in lower skilled roles.
However, despite this positive picture, the majority of manufacturers believes the UK is failing to keep up with competitors, while significant barriers to further automation remain in the shape of a lack of technical skills, data integration and workplace culture.
In response, Make UK is urging the UK government to roll out the successful Made Smarter scheme nationwide to help small and medium-sized enterprises (SMEs) adopt digital technologies, and work with companies to address the continued shortfall of technical skills in the workforce and reform of the Apprentice Levy.
Verity Davidge, director of policy at Make UK, said: “The adoption of AI, automation and other game-changing technologies by manufacturers is rapidly accelerating and will provide vital pieces in solving the productivity puzzle. But, there is still more to be done to match our competitors, especially among SMEs, who face far greater hurdles in adopting digital technology. As well as tackling the digital skills barrier, which remains the biggest hurdle, government should roll out the Made Smarter scheme across the UK. This has a proven success in delivering step change for SMEs on their automation journey.”
Andrew Kinder, Infor SVP of industry strategy, added: “We are seeing a substantial shift in the adoption of digital automation as manufacturers seek to improve efficiency, instill agility and drive greater productivity. While generative AI is still in its relative infancy, intent to capitalise on it is incredibly encouraging, with many companies saying they are ‘aware of and planning to use’ the technology.
“Actions, however, speak louder than words. While the government clearly has a role to play in supporting AI adoption, manufacturers have an opportunity to take control in bridging the gap between intent and value in creating first-mover advantage. The technologies are now widely available, affordable and come with a typically fast return on investment, which all help manufacturers compete in increasingly challenging conditions.”
According to the survey, more than half of companies (55%) have already implemented or, are planning to implement, AI and machine learning to automate decision-making processes and improve operational efficiency. In addition, four-fifths of companies have already introduced or, are planning to introduce, augmented reality and virtual reality techniques in areas such as design and prototyping.
This is part of a wider push by companies to invest in automation, with more than three-quarters (76%) having already done so, while almost six in 10 companies (59%) plan to increase their expenditure compared to the previous 12 months. Furthermore, one in five companies plans to automate between a quarter and half of their processes in the next two years, while a quarter plan to automate between 10% and a quarter of their processes.
These investments are largely in improving manufacturing processes (65% of companies) and product design & development (49% of companies). And companies are seeing significant benefits as a result in improving productivity (60%), improved labour efficiency (49%), and a similar percentage seeing improved quality.
However, despite this positive picture and increased investment plans, significant barriers to the adoption of automation remain in the form of a lack of technical skills at almost half of companies (46%), integration and data challenges (41%). More than a third of companies are also citing high costs (38%) and workplace culture (36%) as barriers.
In addition, the survey shows a clear mismatch between policy incentives designed to boost investment and the expected return on investment (ROI) for companies. More than eight in 10 companies expect up to five years for a positive impact of investment. In contrast, more than half of companies (56.4%) believe government investment policy is not sensitive to the time to see a ROI.
To help address these barriers and boost further automation, Make UK has made the following recommendations:
• Roll out the successful Made Smarter scheme nationwide. This is a proven scheme to help with the adoption of new technology in manufacturing businesses. It should also extend the remit of Made Smarter to include industrial decarbonisation to aid energy efficiency and transition to net zero.
• Make full expensing capital allowances permanent to enable businesses to plan investment over long leads.
• Expand the R&D tax credit to include capital expenditure to spur further digitalised R&D.
• Government should work with business organisations and sector -pecific bodies to help SME engagement with the successful Catapult Centres. This is especially important given the geographic distribution of the centres and would help more SMEs take advantage of their world-leading facilities.
The survey of 135 companies was conducted between 21 June and 12 July.
Read the full Manufacturing & Automation Survey report.
About Make UK
Make UK, The Manufacturers’ Organisation, is the representative voice of UK manufacturing, with offices in London, Brussels, every English region and Wales. Collectively, we represent 20,000 companies of all sizes, from start-ups to multinationals, across engineering, manufacturing, technology and the wider industrial sector. Everything we do – from providing essential business support and training to championing manufacturing industry in the UK and the EU – is designed to help British manufacturers compete, innovate and grow. From HR and employment law, health and safety to environmental and productivity improvement, our advice, expertise and influence enable businesses to remain safe, compliant and future-focused. Visit www.makeuk.org/
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Head of Communications