The Government’s new Industrial Strategy describes the UK as a ‘scientific and innovation superpower’. Part of this is true – the UK’s research is world-class.
But when it comes to turning those ideas into tangible economic value for the UK, we fall short.
The simple reason is this: the country’s manufacturing base has been hollowed out, and without it, innovation struggles to get off the ground.
Over the past three decades, Britain has quietly deindustrialised. The manufacturing sector’s contribution to GDP has dropped from around 16 per cent in 1990 to just 8 per cent today – more than in any other G7 economy.
Worse still, the diversity of the sector and therefore its ability to take on and absorb a range of manufacturing challenges, is also weaker than any other G7 nation. The result of this is that we increasingly import more of the goods we rely on in our daily lives.
Several underlying factors are fueling this decline: long-standing high energy prices, more recent high carbon taxes, and misguided policies. In the UK, there is an assumption that the transition to a low carbon economy means putting a stop to existing operations and processes.
But without a serious plan for what replaces them, and an understanding of the role they must play, this approach is threatening the economic resilience of the UK and Europe.
When industries close, it’s not just production that disappears. We lose the people, transferrable skills, and knowledge that allow ideas to move from concept to commercial product
When industries close, it’s not just production that disappears. We lose the people, transferrable skills, and knowledge that allow ideas to move from concept to commercial product. We don’t just stop making things; we also lose the capacity to start again.
Despite ambitious rhetoric about a ‘green economy’ and leading the transition, successive governments have neglected the crucial foundation: a strong manufacturing skill base.
As a result, we import wind turbines, solar cells, machinery, cars and consumer goods, often from poorly regulated jurisdictions that entail higher emissions.
This imbalance in trade leaves us strategically exposed and therefore vulnerable to geopolitical shifts due to an in-built loss of resilience. This also plays into our greenhouse gas emissions, which are used as a proxy indicator for progress on our transition to a low carbon economy.
On a consumption basis, our emissions are much higher than the territorial emissions we report. We have offshored them.
Peter Williams, group technology director at Ineos
Without a strong industrial base, we also have no springboard for the industries of the future. No infrastructure or expertise to take ideas forward. No incentives for a highly skilled and entrepreneurial workforce, or opportunities to inspire career pathways.
Successive governments have failed to understand this. And while the new Industrial Strategy contains some promising elements, much more is needed. So, what is to be done?
First, manufacturing needs affordable energy. Although electricity is around 40 per cent renewable on average, it accounts for less than 20 per cent of the UK’s total energy demand.
Industry still depends heavily on gas and oil, and will continue to do so for decades, despite progress on renewables. Rather than trying to eliminate these fuels overnight, we must focus on lowering emissions while continuing their use.
One solution is to combine gas-based energy production with carbon capture and storage (CCS), which allows us to generate energy while safely storing CO2 underground.
The UK has a real opportunity to scale up CCS, and early steps have been taken, but progress has been slow. The Government first pledged support for CCS in 2007, but it failed due to a cap on funds. A new attempt was launched in 2012 but also faltered when financial investment was withdrawn.
Now having selected two high priority ‘track 1’ projects it needs to be delivered at pace. Meanwhile, we can focus our more basic research on how to better access new sources of renewable or recycled carbon.
Energy storage is also key. The UK has about seven to 12 days of gas storage depending on the season – five times less than the Netherlands and seven times less than Germany.
The result is price volatility and uncertainty in investment. The development of new technologies to store wind, solar and other renewables is a practical challenge well-suited to Britain’s engineering strengths – but it needs proper funding and a clear mandate.
Second, we must streamline the permitting process for manufacturing facilities. Projects of national importance risk being delayed for years due to excessive complexity and unnecessary hurdles.
Environmental Impact Assessments remain essential, but they must be proportionate. A resilient, future-ready economy requires decision-makers to make balanced judgements that weigh societal needs alongside environmental and financial considerations.
Third, we need to support new developments without disadvantaging existing industry. Renewal requires investment, and fiscal punishment in addition to the twin challenges of high energy costs and carbon taxes means many businesses cannot afford to take part in the transition. Instead, we need incentives.
For example, a VAT exception for recycled goods could take away the cost penalty seen by the consumer and stimulate demand. These can be delivered through several mechanisms and must be calibrated according to the potential value of investments.
Fourth, we need to nurture the most promising emerging industries. The bioeconomy, for example, already has a strong research & technology base, such as that supported by the Industrial Biotechnology Innovation Centre (IBioIC) in Scotland, and the potential to make a significant contribution to transition and industrial renewal, especially if we learn how to exploit bio-waste, poor land, and capture and use atmospheric CO2, itself a bio resource, in an economic way.
The UK does offer some standout examples that demonstrate the benefits of a strong and broad base.
Formula 1 is a prime case, though it receives little attention in the Industrial Strategy. F1 in the UK spans all aspects from research through to manufacturing. It inspires budding engineers by providing visible, viable career pathways.
Over time, it has formed a critical mass of technology and manufacturing expertise, and associations with feeder industries that make the UK an attractive home for new F1 teams. Of the ten F1 teams, seven are based in the UK.
By creating innovations which seep into the broader market it makes a substantial contribution to the UK economy standing as a microcosm of what we need across many more industries.
We talk a lot about innovation and the energy transition as a mix of bright ideas and private investment. But without a serious focus on the manufacturing base needed to deliver it, none of it will happen.
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .