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UK could drop out of world top ten say high-tech manufacturers

Many high-tech manufacturers say the UK could no longer be one of the world’s top-ten manufacturing economies in the next decade unless the government does more to address competitiveness, according to a study released this week.

The 400 senior executives in UK high-tech businesses queried for the study said that their sector still faces barriers in areas such as skills, red tape and access to capital. Top of their list for actions the government should take were increasing vocational training and apprenticeships as an alternative to university and a review of taxation and export duties (both 16%).

When asked about the UK’s position in the global manufacturing rankings in five years time, participants predicted the UK will drop at least two and a half places from its current 6th position to at least 8th. Looking to the ten year mark they were gloomier, predicting a likely mean position of 9.3 in the league table. Just 54% believed the UK would still be in the Top 10 by 2021. 16% were rather more pessimistic saying they felt the UK would be ranked between 10th and 15th.

In ten years time, 70% predict the fiercest competition will come from abroad – China leading the way with 36% (a rise of 17 percentage points on current indicators), India 18% (up from 5% on how it is currently viewed) Germany (down 13%) and USA (down 12%). The number of businesses which thought that competition from within the UK would be toughest declined (18%)

When asked which countries were most likely to overtake the UK in their scale of manufacturing over the next five years, the most popular candidate was India (identified by 58%), with Brazil (26%), South Korea (14%), Russia (14%) and China (12%) also featuring strongly.

On the plus side, UK high tech manufacturing businesses are very international in outlook, with 82% exporting products in some way to markets outside the UK. Looking ahead, businesses expect to expand their export sales over the next 5 to 10 years by an average of 49% within five years and an average of 54% by 2021.

The study, which was carried out by ORB (Opinion Research Business) on behalf of engineering and finance company GE. The companies surveyed came from a range of sectors including car parts, electronics, machinery and general engineering, and all have technically advanced products or undertake substantial research and development.

Further information:
GE High Tech Manufacturing Index (pdf)

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