In its report ‘Future-proofing UK manufacturing; Current investment trends and future opportunities in robotic automation’, by Barclays, it found more than half (58%) of British manufacturers have invested in automation and, of these, two-thirds (65%) felt they are more productive as a result.
Packaging greatest potential
A total of 76% report believe there are opportunities for further investment with parts manufacturing (24%) assembly (15%) and packaging (12%) identified as areas with the greatest potential.
In addition, 28% of respondents highlighted the need for more flexible equipment, where one piece of equipment can accomplish multiple tasks, greater access to external funding (26%), support with technology implementation (18%), and more education and information on the benefits of automation adoption (17%).
Barclays research report is based on analysis by economics consultancy, Development Economics and a bespoke survey on British and German business attitudes towards automation by YouGov.
YouGov interviewed more than 639 middle managers from the manufacturing industry in Britain and over 100 middle managers from the manufacturing industry in Germany between September and October this year.
Mike Rigby, head of Manufacturing, Barclays, told BeverageDaily, the UK was ranked 19th worldwide in 2012 in terms of robot density in the manufacturing sector with a level barely above the global average.
“UK manufacturing is often accused of under-investing in robotics and other forms of automation, compared to other developed economies. There has been widespread speculation that this lack of investment could be one factor behind the UK ‘productivity puzzle’,” he said.
“However, our recent survey of over 700 middle managers and above from British and German manufacturers shows the British sector does not believe it is lagging behind to the extent many people may think.
“Of the British respondents to our survey, over half (58%) say their business has invested in automation. This compares to 66% in Germany.
“Furthermore, 68% of British manufacturers see potential for increasing investment in automation in the future, a similar level to that in Germany (71%).
“The UK automotive industry, for example, has been shown to be operating with half as many robots as those used in Germany, regularly cited as the European industry standard-bearer for automation.
Barriers holding the sector back
Rigby added, although over half of British manufacturers say they are investing in automation they also identify a number of barriers that are potentially holding the sector back from more ambitious and transformative investment. This may account for the sizeable minority of firms who have not invested in automation or even considered it.
Many survey respondents point to a lack of both internal funds (23%), external grants and other sources of finance (15%). A quarter (26%) say they prioritize other capital expenditure projects over automation.
The survey found there are significant differences in levels of investment in automation between the various subsectors of UK manufacturing. Sectors indicating the highest levels of automation are heavy industry (79%), medical devices (79%) and building products (75%).
In contrast, just a third (33%) of businesses in the printing and packing subsector have followed suit.
“Of all the manufacturing sectors the pharmaceutical and food manufacturing industries have the most to gain from further investments in automation with the research showing a more than 10% increase in output between 2016-2020 and close to a 25% rise between 2020-2025 for both sectors,” said Rigby.
“This will be driven by the two sectors’ comparatively large existing base in terms of size and take up of automation technology, and by the relative ease of application of automation technology to both sectors.
“Investing an additional £1.2bn in automation has the potential to add as much as £60.5bn to the UK economy over the next decade; this represents a return on investment of £49 in economic output for the every £1 invested in manufacturing automation.
“With this investment, the UK manufacturing sector will grow to £191bn in 2025, a £38bn increase on the value of UK manufacturing today, safeguarding 105,800 jobs across the economy.”
He added increased investment in automation will also help to soften the expected long-term decline in manufacturing sector jobs by safeguarding 73,500 additional workers in 2025, due to the creation of a larger, more productive and competitive UK manufacturing sector.
In addition, 32,300 more jobs will be supported elsewhere in the economy through the generation of more business in the supply chain, from raw materials through to logistics, as well as the effect of workers spending more widely in the economy.
The research is based on modelling the economic contribution of the manufacturing sector to the wider economy through Gross Value Added (GVA). The key findings within the report are based on a scenario that assumes further investment amongst larger manufacturers operating within sectors that have already begun to successfully introduce industrial robots as well as others (particularly medium sized companies) in the same sectors.