FST JOURNAL

Innovation is at the heart not just of current manufacturing but also the next generation of technologies. Figure 1 shows the innovation ecosystem chart as set out in the Government's Innovation Strategy. In terms of desired outcomes from this activity, we want growth, we want jobs, we want health, we want societal welfare. These are significant goals.

Government's role is to provide an enabling environment. In the UK now, the manufacturing sector has some real strengths. We have the talent and development to support innovation, four of the top 10 universities in the world and we attract not just homegrown R&D but also funding from international investors. There is also support through the R&D Tax programme and other initiatives.

The UK is Europe's leading nation for venture capital, with almost all going into small companies with fewer than 50 employees. The ecosystem is really important. While much of the funding is concentrated in certain sectors – quantum technology startups are a particular area of interest – the UK has more than 25% of the unicorns (startups with $1 billion capitalisation) across Europe, which is more than France and Germany combined. R&D continues to grow and the Government is committed to supporting that, while recognising that the bulk of R&D funding comes from business, rather than Government.

The Intellectual Property regime also has to be right in order to maximise innovation. The UK has the second best IP protection in the world, according to the US Chamber of Commerce International. In the UK, there are two spinouts per £100 million of research income which compares favourably with the US. So in this country we are starting from a solid base when we think about growing our innovation ecosystem and making it even better. Quantum projects have attracted significant investments recently, but other examples include turning carbon dioxide into plastics or developing non-combustible insulation foam.

Net zero is a major challenge involving Government, industry and society. As the recent Skidmore Review sets out, net zero is better than ‘not zero’, green tape is better than red tape. There are different elements of decarbonisation and this is not just about products, but also processes. These are big challenges with significant risks attached, but they also present opportunities in high value manufacturing for innovations that will make us more resource efficient, more energy efficient and which will enable us to switch to different zero-carbon fuel systems.

The Government’s Innovation Strategy identifies a number of technology families and there is a role for manufacturing in each of these. For example, there has been a Call for Evidence on quantum technologies and a full strategy will follow. The Government is also working on a UK Manufacturing Investment Prospectus.

In terms of risk, the Advanced Research and Invention Agency (ARIA) will pick up on some of the opportunities where there is significant risk. The Government has a number of elements within its infrastructure that address innovation. The High Value Manufacturing Catapult has more than half of the total Catapult network funding, which signals the importance Government attaches to this topic. In addition, there are research institutes that work across sectors, such as the Advanced Propulsion Centre and the Aerospace Technology Institute.

Increasingly, though, Government interventions will look across multiple sectors because that is where we need to look for future solutions, integrating insights and developments, collaborating across sectors and across boundaries. This is where we expect the next generation of innovations will come from.

Figure 1. The Innovation Ecosystem 

There are, in fact, many examples of Government and industry working together. Zero emissions aviation is an important goal and Government has provided research funding to explore different technologies. One of the questions is the relative parts that different technologies will play, of which sustainable aviation fuels is just one. Yet, it is not so long ago when it was thought that a zero-emission flight was an impossibility. Now, though, there has been a transatlantic flight and work is continuing on aircraft that will employ batteries or hydrogen combustion. There has been real progress. In the automotive sector, electricity will power the next generation of zero emission vehicles. Halewood will be Ford’s first electric vehicle component in-house assembly site in Europe with production beginning in 2024.

The journey to this stage has been about designing the right processes and products, setting the manufacturing strategy and working out how to integrate disparate parts into an efficient process: it is not straightforward. Get it right, though, and the dividends are there. Again, smarter process is as important as smarter final product. This is a key factor, both in terms of investment and the manufacturing technologies.

There are now five UK regions where companies can access help from the Made Smarter programme (www.madesmarter.uk) designed to help them understand what technology is out there and also, crucially, how to implement these manufacturing technologies. After all, process innovations will be of little benefit if companies are not aware of them or do not know how to deploy them.

The Government also has a role in creating the enabling environment. For example, we know the demand for batteries is going to increase. The Government has set out its commitment and ambition on electric vehicles, which will drive demand. Investors, supply chain companies and OEMs can all see this clearly and this should guide their decision-making. Of course, there is also a need for Government, industry, academia and civil society to come together to identify opportunities, overcome obstacles and enable innovation across the supply chains to make sure that everyone has the opportunity to tackle those opportunities.

The UK is already a great place to innovate, to invest and to manufacture. There is still plenty of room for further economic growth and innovation. Where Government, industry and academia can coalesce around key opportunities and identify clear, common priorities, there should be a bright future as we continue to harness the skills and develop the technologies that we must continue to progress as an innovation nation.