View from the Academy: making digitalisation a priority

We need to develop an approach to industrial digitalisation that engages people effectively and ensures the UK benefits from these technologies, says Hayaatan Sillem

In early 2014, the Royal Academy of Engineering hosted a seminal lecture by Henning Kagermann, one of the chief proponents of the German Industrie 4.0 initiative. His presentation set out the now familiar strategy to prepare German industry for a fourth industrial revolution built around cyber-physical systems. It was abundantly clear to those of us who attended that this trend would also be of great significance to the UK and, while it has taken longer than desirable for this to become a UK priority, I am delighted that industrial digitalisation is now the focus of a serious review being led by Juergen Maier, chief executive of Siemens UK.

Last month, the Academy hosted a workshop on behalf of the  review team, examining the implications of industrial digitalisation for jobs and skills. Chaired by Phil Smith, chairman of Cisco UK and Ireland, and Graeme Philps, CEO of GAMBICA, who lead the ‘skills’ and ‘jobs’ strands of the review respectively, the workshop explored questions such as: what digital skills will be needed in industry to support and exploit digitalisation? How can these skills best be fostered in the current and future workforce? And what is the broader impact of digitalisation likely to be on the creation, displacement and transformation of jobs in the UK? Back in 2014, Prof Kagermann was keen to emphasise that Industrie 4.0 “put human beings at the centre”.  We will need to do the same if we are to develop an approach to industrial digitalisation that engages people effectively and ensures that the UK is a net beneficiary from these technologies.

Digital technology already permeates and underpins the world around us in a profound way – a trend that is set to accelerate in the years ahead. While digital technology can enable disenfranchised groups to participate in economic activity more effectively, there is understandable concern that the same technology might make it easier for people in other countries, or indeed robots and computers, to displace UK jobs and opportunities.

There is a significant body of data suggesting that in  the long term, automation and digitalisation tend to boost employment. One study found that if all industries had the highest observed level of robot intensity, then employment would increase by 7 per cent in the UK. Another concluded that a 10-point increase in the digitisation score would result in a 1.02 per cent drop in unemployment. It has also been argued that industrial digitalisation will shift the focus of manufacturing from mass production and delocalisation to customisation and flexibility of production, with manufacturing increasingly conducted locally.

It is therefore important that the debate over the impact of technologies such as robotics and artificial intelligence (AI) moves beyond predictions of the numbers of jobs that will be lost or created. Instead, it needs to be framed in terms of the changing patterns and content of jobs, the skills sets that will be required and the policies that will bolster UK productivity and competitiveness as digital technologies become more pervasive. The fact that UK industry didn’t embrace the so-called third industrial revolution (driven by automation) as fulsomely as some of its international counterparts may create a strategic advantage, potentially allowing us to be more agile in seizing the opportunities for new products, services and business models enabled by digitalisation.

For that to happen, the UK must substantially improve its performance in digital skills. Just 17 per cent of employers responding to a recent survey conducted by BDO and the Institution of Mechanical Engineers said that they have the right staff and skills to incorporate Industry 4.0 into their businesses. As well as ensuring that digital skills become embedded in our education system, we need to put in place much better systems to support lifelong learning. We also need more effective guidance, and stronger links to industry, for those involved in education and training provision so that providers understand the skills and knowledge that are going to be of value to learners, both today and into the future. The task of raising skill and knowledge levels to support our adaptation to digitalisation must be taken up right across industry – from the factory floor to the boardroom, and in companies large and small – as well as across academia and government.

The engineering community must also ensure that its structures and activities adequately reflect the collision of the physical and digital worlds.We need to be a central part of the response to industrial digitalisation, whether informing public policy or supporting the delivery of future-proof training and approaches to professional registration. Our expertise will be crucial for building secure cyber-physical systems and we will need to work with the public and policymakers to build trust and confidence in them, while systems engineering approaches will be vital for building resilience in an ever more interconnected world.

The Academy looks forward to working with colleagues across the engineering profession, industry and government to make sure that Juergen Maier’s review has the long-term impact required to secure our future competitiveness.

Dr Hayaatun Sillem is deputy chief executive of the Royal Academy of Engineering