Tackling the UK's productivity deficit

Jason Ford

News editor

We asked a leader in factory automation how the UK can boost its lagging productivity, ahead of the International Festival of Business, which opened today

Last summer Sajid Javid, secretary of state for business, said that Britain is home to a number of innovative and dynamic businesses but that productivity is well below its potential.

“In stark terms, it now takes a worker in the UK five days to produce what his or her counterparts in Germany can deliver in four,” he said.

In parallel, George Osborne used his summer Budget to announce a 15-point productivity plan that would help to position Britain as the wealthiest major economy by 2030.

Measures announced include cutting corporation tax and fixing the Annual Investment Allowance at £200,000; investing in skills by introducing an apprenticeship levy; and investing in the Northern Powerhouse and supporting infrastructure.

But what can businesses – large and small – be doing on their side to boost productivity? We put this question to Brian Holliday, managing director, Digital Factory, Siemens UK & Ireland ahead of the three-week International Festival of Business (IFB2016), which opened today in Liverpool.

He said: “Key productivity levers for companies large and small include investment in people, process and technology.

“People will always be the most important asset for engineering and manufacturing companies and it is important that companies engage workers through best working practices and continuously invest in quality training provision. Vocational training like apprenticeships, time and again demonstrate great outcomes for trainees and companies alike.

“Productivity is a must and production and commercial processes need to be constantly reviewed and improved through systematic methods like those described by the EFQM model.

“Finally, technology is becoming increasingly important, pivotal indeed, as manufacturing becomes more connected and complex. Digitalisation is accelerating and to stay ahead companies need to invest in technologies that drive productivity such as informational productivity like PLM software and to derive greater industrial productivity through the increasing automation of repetitive tasks.”

Week One of IFB2016 is focussed on manufacturing with the organisers stating that tens of thousands of international delegates will be at the Exhibition Centre Liverpool looking to do business with UK companies. A full schedule of events can be found on the IFB2016 website.

Siemens is launching its new UK brand positioning – ‘Ingenuity for Life’ – and hosting the Solving the Productivity Puzzle conference on Day 2 of IFB2016.

Siemens says it has a vision of tomorrow's manufacturing, with products finding their way independently through the production process.

“In intelligent factories, machines and products communicate with each other, cooperatively driving production,” they say in publicity material. “This is what Industry 4.0 is: the road to the Fourth Industrial Revolution.”

But in what ways can Industry 4.0 help solve the UK’s productivity puzzle? For this we turn again to Holliday, who said: “Acatech in Germany estimate that when fully implemented, Industry 4.0 could boost industrial productivity by 30 per cent.

“This seems to be a reasonable projection given Copenhagen Business School's estimate that UK manufacturing productivity could be boosted today by about 23 per cent through automating to the same extent as other leading manufacturing economies.

“Industry 4.0 is a long-term vision that demonstrates how increasing value-add – productivity - can be extracted through the digitisation of the complete supply chain. Platforms to achieve this can be built on today in four principle ways:

• Building a digital backbone for the organisation (Including, design, make and service information + hosting simulation and virtualisation tools.)
• Implementing the sensor and industrial communication systems that collect important status data. (e.g. Open platforms like ProfiNet and OPC UA)
• Building collaborative systems with cyber-security in mind.
• Using Data Analytics to understand processes better. This will be increasingly handled in the Cloud and at Siemens we achieve this in Mindsphere.

IFB2016 takes place 13 June - 1 July at the Exhibition Centre Liverpool.