Manufacturers’ remain at the forefront of the UK’s business
innovation efforts, according to a new survey published by EEF,
the manufacturers’ organisation and Santander.
The Monitor shows innovation is key to manufacturers’ success at
home and overseas, and is seen as a critical part of their growth
strategies. First and foremost, innovation helps manufacturers to
do things better. It also helps them to enter new export markets
as well as to seek new domestic markets. It’s about much
more than new products and new markets. And as a result, the
breadth and focus of manufacturers’ innovation activities has
changed significantly in recent years.
Key findings:
- Almost
all (95%) manufacturing respondents engaged in some form of
innovation in the past three years, unmoved from our
last Monitor in 2015/16;
- Three-fifths
of manufacturers reported introducing a new or improved product
in the past three years;
- But
a balance of 37% of companies agreed that “process
innovation is becoming more important than other forms of
innovation”;
- Positive
outcomes from process innovation are widespread with reduced
production costs (72%) and higher productivity (70%) topping the
list of cited benefits;
- Not
all companies are making the most of process innovations; less
than half (45%) report that process innovation involves the use
of new ICT to improve product processes;
- Industry-academia
interactions on process innovation are low with only a sizable
proportion of companies never involving universities (43%) or
Catapult centres (90%); and
- Propelling
more companies towards the productivity frontier requires policy
to help manufacturers overcome certainty, capability and cash
barriers to more effective process innovation.
Confirming the dominance of industry Research & Development
(R&D) spend, the survey highlights the on-going
prioritisation of investment on innovation in the past three
years. While the development of new and improved products remains
critical in meeting customer requirements and cementing
manufacturer’s position in global value chains, process
innovation is becoming even more important.
A balance of 37% of companies agreed that process innovation is
more important than other forms of innovation. This growing
importance is being driven by the need for complementary
innovation to deliver leading edge production techniques in
support of new products, the need to increase the flexibility of
product processes and the increasingly pressing need to improve
productivity.
Our research clearly shows that there are no downsides to process
innovation, but it is also clear that not all manufacturers are
making the most of their efforts. Concerns that there is a chasm
opening up between companies at the innovation frontier –
investing on multiple fronts, including 4IR technologies – and
the less-productive majority, are confirmed.
With innovation and science set to be a centrepiece of the
government’s forthcoming industrial strategy white paper, it is
vital that policy makers also recognise the value of process
innovation to drive productivity. Support for innovators needs to
be broader than help with new product development, it also needs
to help manufacturers bridge the gaps to the adoption of new
technologies and modern manufacturing techniques.
Commenting, Ms Lee Hopley Chief Economist at EEF, said:
“Manufacturers are continually having to broaden their horizons
when it comes to innovation and investment priorities. It’s
hugely encouraging that we see productivity-enhancing process
innovations become more widespread in their adoption across
manufacturing, in addition to companies retaining their focus on
new and better products for customers.
“But not all companies are moving forward at the same pace, with
many constrained by access to the right people and overcoming
uncertainties about the returns from their innovation efforts.
While our message to industry is to cast their net wider,
particularly to build more collaborative partnerships, it is also
clear that support for the spectrum of innovation – including
modern processes – should be centre stage in the government’s
forthcoming industrial strategy.”
Commenting, Paul Brooks, Head of Manufacturing, Santander UK,
said:
“It is great to see the manufacturing sector leading on many
forms of innovation and accounting for 70% of all R&D in the
UK. This new report shows that around half of manufacturers
innovate to enter overseas markets and we at Santander are
ideally placed to support those international trading ambitions.
Innovation is a cornerstone of many businesses future success and
is something that every business should be looking to embrace. We
are committed to working with manufacturers to help them increase
their productivity and capitalise on new opportunities.”
https://www.eef.org.uk/resources-and-knowledge/research-and-intelligence/industry-reports/process-innovation-bringing-manufacturers-to-the-frontier
