Startups key to digital transformation for existing manufacturers
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Manufacturing leaders are keen to make startup collaboration part of their business strategies, with 82 per cent believing it will accelerate their digital transformation, according to a Digital Catapult survey.
In the Digital Catapult survey of 100 UK manufacturing leaders at director level and above, 82 per cent said that working with startups will help them accelerate digital transformation objectives, admitting that startups can give them access to creativity and skills they do not currently possess in-house.
Manufacturers are also increasingly looking to partner with startups to stimulate innovation, with nearly three-quarters of manufacturing leaders (73 per cent) saying that collaborating with startups is part of their long-term business strategy. Fifty per cent of manufacturers said they have already worked with startups.
However, only a quarter of those polled said that collaborating with startup businesses to experiment with technologies is a priority in the next 12 months, despite 92 per cent of those who have already worked with a startup saying they would do so again. Top barriers to manufacturing leaders working with startups included a fear of failure (59 per cent) and a lack of time (52 per cent). This is in spite of 31 per cent of businesses with a turnover of over £50m acknowledging that working with startups represented a key opportunity.
When it comes to digital transformation more generally, a third of respondents listed a perceived risk of business disruption as a barrier. With external pressures on business – such as the Covid pandemic and the after-effects of a hard Brexit – showing no promise of easing, Digital Catalpult's research exposes how the more risk-averse manufacturers could miss out on key opportunities to innovate and absorb learnings from the more agile startup community in the short-term.
The research was released as Digital Catapult's 'Made Smarter Technology Accelerator' showcase unveiled four startup-led minimum viable products (MVPs) as innovations for industry giants Babcock, BAE Systems, Northumbrian Water Group and Safran Landing Systems. The programme has supported 14 UK startups thus far with a share of £700,000.
Jeremy Silver, CEO, Digital Catapult, said: “As the impact of the pandemic continues to disrupt supply chains around the world, heading into 2022, manufacturing leaders are looking to find new ways to weather the storm and at the same time keep pace with the speed of digital technology development, which is increasing competition globally.
“Many manufacturing heavyweights are not making collaboration with innovative early stage companies a priority in the next year, despite recognising the potential benefits. Our survey suggests that there is a danger that UK companies will miss out on the opportunity to be early adopters of new technologies, and learn from startups’ creativity, innovation and agility.
“The Made Smarter Technology Accelerator provides hard evidence of what can be achieved by open innovation programmes; successful, real-world solutions delivered against the clock to drive real change for manufacturing giants.”
Part of the Made Smarter programme, the Made Smarter Technology Accelerator sees established manufacturing companies pair up with pioneering startups to develop real-world innovations tackling major challenges.
Final solutions arising from 'Made Smarter' included:
- Machine Intelligence Ltd (BAE Systems): the MVP will use machine learning to identify defects in manufacturing, improve the quality of the end product, reduce waste and save money.
- JetSoft (Babcock International Group): this solution both reduces reliance on paper-based reporting to improve shop floor efficiency, and uses existing equipment to create automatic 3D inspections – improving understanding of faults and operating performance.
- Total Control Pro (Safran Landing Systems): Total Control Pro has developed a data-driven planning, scheduling and resource optimisation solution to tackle the challenges of complex planning and resource management.
- Riscon Solutions and Inventia UK (Northumbrian Water): this project delivers cloud-enabled, remote water quality monitoring solutions.
Nigel Harley, IoT Specialist at Software AG, commented: “The Made Smarter Technology Accelerator is a really important project for helping the manufacturing industry to transform. Software AG shares many of the same values with the programme, in particular we want to address business needs through technology value and we feel that the best solutions are delivered with an ecosystem-driven approach.
“What all industries really need if they’re to embrace technology and become truly connected is to move beyond basic proofs of concept and create Minimum Viable Products. Something that can be used, analysed and improved at the same time positively impacting a business is a win. We’ve seen that approach as a prevalent theme during this programme, which is why it is such a valuable endeavour.”
Iain Minton, technology capability delivery director, BAE Systems, said: “Working with Digital Catapult gives us access to a wider pool of talent and technology from small companies with big ideas. The Made Smarter Technology Accelerator programme is a great enabler and catalyst for tech start-ups to take their ideas and innovations into industry and apply them.
“Our 'Factory of the Future' programme has been the perfect incubator to have taken some of those ideas and put them to the test. At the same time that we get to explore new ideas and ways of thinking from outside the business, tech startup companies like Machine Intelligence Ltd have been able to experiment and draw from our experience in the process. Schemes like this are critical for innovation in the UK.”
In the research, a third of manufacturers said Brexit has been a barrier to them taking part in open innovation – underscoring the importance of government-backed open innovation programmes such as Made Smarter. At its core, the programme plays a role in revolutionising the industrial operations of manufacturing businesses, boosting productivity and resilience while allowing the UK to retain its leading position on the world stage.
Digital Catapult works with a range of organisations – including startups and scaleups, established businesses, investors, government and public sector, research, and academia – to discover new ways of solving industry challenges, increase productivity and open up new markets.
Juergen Maier, chair of Digital Catapult and co-chair of Made Smarter, said: “In tumultuous times, it can be tempting for businesses to cut costs rather than invest. Yet, for the UK manufacturing sector to thrive and become a world leader, we need to find ways to encourage innovation and the adoption of digital technologies.
“The Made Smarter Technology Accelerator – and the wider Made Smarter national movement – is designed to do just that by fostering relationships between technology innovators and manufacturers to solve genuine industry challenges.”
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