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Getting British business to embrace automation and digitalisation

Juergen Maier, Chief Executive of Siemens UK and Honorary Professor of Engineering at The University of Manchester, is at the heart of efforts to get British business to embrace automation and digitalisation.

You have been talking about the impact and potential of digitalisation for many years. Is the transition moving fast enough?

Looking at the national narrative and policy framework, the good news is that we have made a good job at positioning the Made Smarter initiative - which explores how UK manufacturing can maximise benefits from increased adoption of digital technology – as part of the wider Industrial Strategy. The Treasury is on board too and supportive policy actions are coming through. But are we moving fast enough? 100 per cent not, and the reason for that is very simple. We are coming out of 40 years of a very hands-off industrial strategy approach. Learning how to develop a more proactive, impactful and smarter industrial strategy approach will take a couple of decades.

Is there anything companies can be doing to accelerate the agenda?

What I have come to realise in recent years is that the fastest way to see automation and digitalisation adopted by companies is for them to start doing things that no one else is doing. For instance, if you have an opportunity to create a data analytics solution for a particular manufacturing process and no-one has thought about that, then that makes this transition much easier. Here at Siemens we have examples of this happening too, for instance we have just scaled up an additive manufacturing company very successfully.

How does the UK compare to other countries in terms of the transition?

The global landscape is extremely competitive with the likes of Singapore and Germany at the forefront of the Industry 4.0 revolution, and the US and China not far behind. If you take a country like Germany it has always had a more hands-on industrial strategy approach and a political landscape that understands the value of frontier industries. In the UK the policy backdrop has always been that ‘manufacturing only accounts for 10% of the economy’, while we also still have an outdated free market thinking which may have benefits in other areas of the economy such as financial services, but in terms of high-tech, high-value frontier industries it is not much help.

To what extent does the fact that London and the South East is driven by financial services affect this thinking?

I would say it is quite influential and I think it will take northern leadership to really drive the Industry 4.0 agenda further forward. Indeed you could argue that the South does not actually need the fourth industrial revolution as much as the North. The problem for the North is its reliance on the low-end service sector economy, and its low productivity, and this is precisely the reason why a local industrial strategy for the North is so key. Here in Greater Manchester the focus for Mayor Andy Burnham has to be on putting as much focus as possible on that strategy and creating a very strong local industrial strategy partnership with industry.

What can major corporates, like Siemens, do in terms of helping companies embrace digitalisation?

We have a major role to play and I am seeing evidence of a lot of very good work going on, as innovative and cutting edge as anywhere else in the world in areas such as robotics, machine learning and Artificial Intelligence. I think we are also now developing a very good ecosystem via our research centres within universities and through the work of Catapult, a network of world-leading centres designed to transform the UK’s capacity for innovation. The problem is that we simply don’t have enough large businesses and you need to create enough large companies that sit at the top of the food chain that can then feed companies below. Unfortunately that is not something we can solve overnight, but hopefully some of the companies that evolve as part of this fourth industrial revolution can scale up over time.

What about SMEs. To what extent are they embracing Industry 4.0?

I’m afraid that here we are doing pretty badly in terms of making these small businesses feel ready to start adopting technologies. We have made some progress through Made Smarter, but this comes back to the point that there are not enough big companies around to help smaller companies along the journey. We also still struggle from a lack of co-ordinated support mechanisms for these smaller companies to get the advice and help that they need. Of course SMEs also have a whole array of other issues to contend with too, not least the impact of Brexit. It all comes back to having a supportive ecosystem around you in order to make the transition.

What is the role of business schools in further promoting this whole agenda?

The obvious area is leadership. Here at Siemens we are already work closely, along with a number of other leading tier-one companies, with business schools. One particular initiative we are involved in looks at how we have transformed workplaces by putting employee engagement at the centre of improvement processes.

Blog posts give the views of the author, and are not necessarily those of Alliance Manchester Business School and The University of Manchester.

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