Businesses that manufacture have a strong future in the UK, but Government policy has not caught up with the changing dynamics of the sector, the new CBI Manufacturing Council chairman said today (Friday).
In his maiden speech Andrew Reynolds Smith said that the manufacturing sector deserves greater credit for its successes in recent years, and for its key role as part of the wider economy.
He said that although the government has helped provide a stable business environment and a flexible workforce, and is moving in the right direction on skills, the industry needs to do more to promote itself, while policymakers should embrace their role in creating a globally competitive, modern manufacturing sector in the UK.
Mr Reynolds Smith, Executive Director of GKN, told business leaders at a CBI event in Banbury, Oxfordshire: “Manufacturing is misunderstood. Public opinion is of a small, declining sector, owned by foreigners and on the brink of being totally offsho red to China.
“But in fact there are over 150,000 businesses that manufacture in the UK, turning over Â£500bn. Last year they accounted for 60% of UK exports, worth Â£220bn – which is an increase on the previous year. And 21 of the FTSE 100 manufacture goods including pharmaceuticals, machinery and food.”
Mr Reynolds Smith stressed that manufacturing is not a stand-alone function concerned with making products, and that many businesses that manufacture also research, market, deliver and service their products.
He added: “Manufacturing is no longer just about a factory floor. We must stop thinking of manufacturing companies, and think of ‘businesses that manufacture’. Research creates new ideas, which are then developed and designed into products, which have to be made, sold, shipped and serviced.
“In today’s environmentally conscious world, businesses are increasingly responsible for the whole life-cycle of their products, including disposal and recycli ng at the end of their life.
“To be sustainably successful in manufacturing, we have to perform in every aspect of manufacturing, and integrate that performance across the whole business.”
He continued: “We must not be complacent – these are challenging times for businesses that manufacture. Competition is fierce and global, and government policy can mean the difference between success and failure, between growth and stagnation, between doing business here in the UK and moving it overseas.
“Manufacturing is changing rapidly. If government is to play its part in enabling modern UK manufacturing to compete on the world stage it needs to believe in manufacturing and understand that it has an important role to play. A good start has been made, but there is much left to do.
“Businesses must be strong enough to compete in export markets and they need support from government to break into them. UK Trade & Investment does some good work and it promises to do more, but it needs to deliver.
“We all need to pull together – industry and government, employers and employees, businesses and education, to work to ensure a successful future for UK manufacturing.
Our goal is clear and within reach – a vibrant manufacturing sector which is globally competitive.”
Mr Reynolds Smith is Executive Director of global engineering group GKN, with responsibility for the group’s powder metallurgy, off-highway and industrial distribution services. Aged 41, he joined the CBI Manufacturing Council in March 2004.
He made his speech at an event entitled “Promoting UK Manufacturing in the 21st Century”, which was run by CBI West Midlands and hosted by automotive and motorsport innovators Prodrive at their Banbury site. Rolls-Royce sponsored the event, which featured a number of speeches on the role and future of manufacturing. Martin Johnson, vice president of communications at Rolls Royce and Grahame Wright, group marketing director of Prodrive, also delivered speeches.