A recent Green Alliance report calling for the government to build a more resource-efficient manufacturing strategy, to close the UK’s regional productivity gap, ensuring good jobs stay in the UK.
In a bid to tackle the UK’s sluggish productivity and in a crucial effort to rebalance the economy, several leading trade and business organisations are urging the government to place resource efficiency at the heart of the UK’s Industrial Strategy.
Angela Francis, senior economist at Green Alliance, said: “The UK’s industrial strategy must help British businesses keep up if they are to retain their competitive advantage post-Brexit. There are huge economic opportunities here which could help to reinvent manufacturing in the North.”
Currently, Manufacturing contributes 15-20 per cent of the UK economy in regions that are experiencing low productivity. Although this includes some of the UK’s most productive firms, there is a long tail of poor performers contributing to the problem.
Around half of manufacturers’ costs are on resource inputs. In the past ten years, the best manufacturers across the country have cut their energy use by 50 per cent, but the majority have only managed a reduction of 10-15 per cent.
Mike Spicer, director of research and economics at the British Chamber of Commerce, said: “As the most successful firms know, improving resource and energy efficiency is essential to meeting that challenge.
A comprehensive upgrade programme for manufacturing, taken forward by the new industrial strategy and supported by government would be a welcome step in the right direction.”
The group says that the government can help manufacturers via the industrial strategy by providing a long term view of risks and an understanding of the role of technology in improving efficiency, through the use of alternative materials, optimised processes and recovered materials.
Steve Evans, Director of research at the University of Cambridge’s Institute for Manufacturing, said: “The government’s industrial strategy should provide foresight and benchmarking for UK manufacturers to realise the untapped potential of resource efficiency and help build long term manufacturing competitiveness.”
The strategy has the potential to add $10bn to the profits of the manufacturing sector, increase productivity, support growth in the North and Midlands, where manufacturing is more dominant, and keep good jobs in the UK.
The 5 Step Programme to upgrade manufacturing is as follows:
1) Target decision makers – Target resource intensive manufacturing, extractive and construction sectors with tailored programmes engaging CEOs and finance executives.
2) Holistic support – Deliver holistic support covering the whole range of inputs: energy, water and materials, which is more effective than single issue interventions.
3) Trusted providers – Build a network of trusted providers, guaranteeing confidentiality of operational information.
4) Fund innovation – Use the Industrial Strategy Challenge Fund to identify resource efficiency innovation opportunities across supply chains and sectors.
5) Reward leaders – Design government procurement policy, including forward commitment contracts, to encourage resource efficient processes and products.