One of the UK’s leading industrialists made an impassioned defence of Britain’s EU membership during our Vital Topics lecture.
Professor Juergen Maier, Chief Executive of Siemens, said improving the UK’s relationship with the EU was one of the key success factors to improving the fortunes of UK manufacturing as it faced ever greater global competition and the challenges of a new industrial revolution.
“To me the situation is very, very clear. Full membership of the EU with free trade is absolutely critical to supporting UK manufacturing and driving more exports. Free trade and access to a single market, whether you are in or out of the EU, comes with a cost and also still requires adherence to EU legislation. The EU will continue to be for a very long time our largest trading partner and export market. Yes, some EU rules and regulations can sometimes be questionable and I am supportive of a strong reform agenda, but only as long as it improves the competitiveness of all EU states. It has to be about all of us, not just what is good for Britain.”
Juergen said rules were absolutely essential to driving efficient trade and for consumer protection. “The new manufacturing age which is upon us will also require massive regulation and standardisation. Surely it is better to be leading the way rather than leaving it up to someone else to tell you what to comply with.”
Among other key success factors for UK manufacturing Juergen said there was a need to strengthen industrial strategy, but that the UK needed to be sending out a clear message. “We are again beginning to question to what level government should support specific industries, but this was a debate we had seven years ago when an industrial strategy was formed and we are now debating it again. Other nations are driving ahead fast and are clear about which industries they are investing in and at which they are going to be world-beating. If we are to succeed we must be bolder, more focused, and decide on a few key sectors and technology areas that we are going to focus on, be world-class in and drive more investment.”
Juergen said the creation of Catapult innovation hubs across the country had been successful, but more needed to be done to create long term success and engage SMEs, while more investment was required in technical skills. He said the UK’s engineering sector needed around two million skilled workers over the next decade, but the latest projections were that supply would only be roughly half that figure.
Raising the profile of vocational skills was key too. “Only 17% of UK school-leavers enter vocational routes, while in Germany it is 60%. Only 20% of small engineering companies in the UK take on a formal apprenticeship and that is not going to take us forward to help close the skills gap, or indeed to the innovation levels, that we need in the future.”
Driving up leadership and ambition was another key factor. “When I go to Germany and visit an engineering company the conversations are all about new technology, ‘how can I be more competitive’, ‘how can I export more’. When I have those same conversations in the UK it is more ‘I’m not sure if I can afford this’ or ‘what is the payback time’. There is a lower level of ambition. Don’t get me wrong, there is excellence in UK manufacturing and we need to bottle that and translate it into those companies which don’t have the same level of ambition as fast as possible.”
Meanwhile Juergen said these were exciting times in manufacturing with a new fourth industrial revolution driven by the move from mass production to customisation, the move to digital, and the innovation required to power that digital transformation. “Today, it is about smart products made in smart factories connected through smart supply chains.
“Is the UK ready to take a strong part in that revolution? Can the UK take the lead? The overall conditions in the UK are better now than they have been for several decades. We now need to translate this into opportunities for UK plc. But unless we get much more strategic and long-term in our approach, and raise our level of ambition very significantly, others will probably win the race.”