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UK manufacturers say digitalisation is driving productivity

18 July, 2023

Nearly half (47%) of UK manufacturers have active plans to invest in digital technologies to decarbonise their business, according to new research published by the manufacturers’ organisation Make UK and the cloud business management specialist, Sage. Almost a quarter of those surveyed have already invested in digital systems with a further 23% planning to do so in the coming 12 months,

Based on the 28-page report – called Decarbonisation through Digitalisation – Make UK is calling for the Made Smarter digitalisation programme to be rolled out across the UK, and for its remit to be expanded to include industrial decarbonisation

Some 62% of companies which have already adopted digital technologies in their production processes report that they have cut their energy costs – with more than half saying that the savings amounted to £10,000–£100,000 over the past 12 months. A further 46% say their energy savings were less than £10,000, but were still significant to their businesses.

The digital adopters also cite savings on labour, material wastage and water costs. Almost half (44%) report that digitalisation has been their top driver of productivity improvements, helping to tighten up production processes.

Just one in ten businesses do not believe that digitalisation will have any impact on their net-zero ambitions. And six in ten manufacturers are still wary of the upfront costs without accurate timings for return on the investment. Almost half (45%) of those surveyed said more evidence on investment return would help them to decide to adopt digital technologies.

Almost a third (30%) of the businesses surveyed say they have already invested in supply chain management digital tools which can reduce emissions and build resilience from delivery disruptions caused by new Brexit trading rules and long-term Covid disruption in Asia.

Half of the manufacturers quizzed say that tax incentives to invest in digital decarbonisation technologies and upskill their workforces would be a major incentive for them to adopt the technologies. Taking the first digital steps is much harder for SMEs than for larger companies, with 64% of smaller firms saying they have experienced skills shortages when trying to invest in and adopt digital technologies.

“Britain’s manufacturers have long been at the forefront of digital innovation globally and they have taken significant steps to cut carbon emissions and move towards net-zero,” says Make UK CEO, Stephen Phipson. “But in order to supercharge that journey, business needs Government to play its part in driving the process forward.

“To that end, Government needs to help them move forward faster by committing to a national rollout of the industrial digitalisation programme Made Smarter across the UK and to expand its remit to include industrial decarbonisation,” he adds. “Made Smarter has already delivered amazing successes in helping SMEs boost their productivity through digitalisation, and they are ideally placed to pick up the mantle to help decarbonise through digitalisation.

“We need to see an expansion in the R&D tax relief to include capital equipment relating to industrial decarbonisation and the introduction of a Help to Grow Green tax credit to incentivise businesses to take those first active steps to produce goods more sustainably at a time companies are cash-strapped through the burden of higher labour and energy costs,” Phipson concludes.

Make UK:  Twitter  LinkedIn

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