Yet stubbornly low productivity continues to hold back manufacturers. According to industry body MakeUK, the UK’s manufacturing productivity growth rate has plodded along at less than 1% a year since 2008, the year the global financial crisis hit. This contrasts with 4.7% growth experienced between 2000 and 2007. It also means the UK’s manufacturing sector has been far less productive than its international competitors in recent years.

“Part of the skills challenge for manufacturing is the industry’s image problem: many roles are seen as low skilled, low paid, repetitive or dangerous,” says Tom Smith, Head of Sectors at Lombard. “Meanwhile, the manufacturing workforce is ageing, with an increasing number of employees approaching retirement age and not enough younger talent coming through.”

Indeed, in 2023 some 36% of manufacturing vacancies are ‘proving hard-to-fill’, according to the Manufacturing and Automation Report 2023, published by Make UK. Its latest research, produced with software firm Infor, show applicants lack the required skills, qualifications or experience. This compares with an average rate of 24% across all industries.

As a result of struggling to find the right people, more manufacturers are turning to automation – replacing human-led tasks with technologies that can speed up processes and reduce error rates to improve overall efficiencies. According to the Make UK’s report, roughly two thirds of UK manufacturers have now invested in some type of automation, while 20% have started to explore automation and its benefits. Some 9% of manufacturers have not yet started to explore automation, but are planning to do so, while only 4% have no intention of investing in automation technologies.

But the Make UK report finds that most manufacturers, particularly SMEs, have only automated a small proportion of their business, focussing on certain processes. These firms are often less able to adopt the most advanced technologies due to a lack skills, finance and knowledge about the tools best suited to their needs.

To help close these knowledge gaps, and to encourage greater levels of investment and skill development, manufacturing experts would like to see a more coherent, long-term industrial strategy, with automation at its heart. Robert Harrison, a professor at the University of Warwick and Head of Automation Systems at WMG, the university’s research and development hub for industry, believes more manufacturers need to be shown the “art of the possible” when it comes to automation.

Better access to information and real-world success stories, that demonstrate automation’s effectiveness and prove the business case, can encourage more owners to invest, he says. "The skill level of people is key, and there's an impetus for automation as wage levels rise, making it a more sustainable model," he adds.

He points out that now is a good moment, as the cost of technology is dropping just as wages are increasing, changing the dynamic of the business case in favour of technology.

Far from being a threat to workers, Mike Wilson, chief automation officer at the Manufacturing Technologies Centre, argues that automation technologies are about augmenting an existing workforce, and nothing to do with job replacement. “Robots don't take jobs, they fill vacancies,” he says, adding that the primary purpose of automation in manufacturing should be to free human staff from repetitive, mundane or dangerous tasks and enable them to focus on adding value to the products they’re making.

Both Mike and Robert believe that automation can and should revolutionise UK manufacturing, at once solving the talent and skills shortages facing the industry and boosting its productivity, making UK manufacturers competitive again internationally.

Innovation is constant, with technologies advancing and becoming more accessible all the time. For Mike, so-called collaborative robots stand out as an example where significant recent technological development has made the technology much more accessible to smaller manufacturers, who often lack technical expertise to implement such schemes. These robots are now easier installation and their smaller size allows them to be deployed in spaces where industrial robots couldn’t previously go. Robert, meanwhile, is excited about the implications of ‘digital twin’ technology for manufacturing since it could help companies troubleshoot problems, working with digital models of physical products.

As more businesses continue to adopt automation and embrace new technologies, challenges remain for the manufacturing industry. Securing a workforce with the appropriate skills and expertise to adapt to these new technologies must be a priority, as is attracting a younger generation of workers to engineering and manufacturing. In addition, the cultural mindset at many smaller manufacturers needs to shift to further embrace automation. Mike Wilson says they need to shift away from the idea of owning machinery and running it down until it’s on its last legs. Rather than save time or money, this just weds these smaller manufacturers to traditional processes and outdated machinery.

“Automation can help bridge the productivity gap in manufacturing while the industry evolves, but a holistic, long-term approach is needed to ensure manufacturers continue to thrive,” explains Tom Smith. “This approach must encourage businesses to invest, while prioritising better education and stronger recruitment policies to attract the next generation of manufacturing leaders.”

In November 2023, NatWest hosted a webinar on the topic of automation and robotics, featuring a number of industry leaders who shared advice and insight. Here is what they said:

Mike Wilson, Chief Automation Officer, Manufacturing Technology Centre (MTC): Engage your workforce in the process early on and don't be afraid. It is a challenge, but there are people here to help.

Søren Peters, CEO, HowToRobot: Don’t start automating the most complicated things; pick something simple that everyone is comfortable with. And let the market help you understand what is complicated and what is not.

Troy Barratt, Managing Director, Contracts Engineering: Engage with an impartial partner and reiterate the point that robots don’t replace jobs, they fill vacancies.

We have lots more insight on manufacturing and the future of business.