Transcript ONS Foresight (Powerpoint presentation 2655Kb)

The Future of
Manufacturing:
A new era of opportunity
and challenge
Professor Steve Evans, University of Cambridge
Scope
Foresight Future of Manufacturing Project
Objective has been to investigate changes and
uncertainties facing UK manufacturing activities,
to 2050 where possible, to inform how the UK can
create and capture future value.
Vince Cable is the sponsoring minister. Findings
available for BIS to use to inform development of
future policy.
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A recent context of historical shifts…
Manufacturing share of GDP 1990-2010
• 10% of UK
economy
(1973: 29%)
• Employs under
3m people
(1966: 9m)
• Similar trends
elsewhere
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Foresight Future of Manufacturing Project: 7th November 2013
With areas of weak
...and some areas of strong
relative performance…
relative performance
• Expenditure on
manufacturing R&D
• Levels of capital
investment
• Falling share of global
exports
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• Strong total factor
productivity
• Increasing proportion
of output exported
Foresight Future of Manufacturing Project: 7th November 2013
Share of manufacturing exports in manufacturing output
The sector makes powerful
contributions to the UK economy
• Absolute value: 10% of GDP (£139 bn in 2012)
• Exports: 53% of UK exports in 2012 (£256 billion)
• R&D: 72-79% UK business R&D spend 2000-11
• Productivity: growth 2.3% p.a. (1980-2009) UK 0.7%
• Jobs: high skilled and well paid
• Resilience: provides resilience in face of recession
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Foresight Future of Manufacturing Project: 7th November 2013
Share of manufacturing exports in manufacturing output
Timetable
• Lead Expert Group
• Industry High Level
Stakeholder Group
Scoping
Jan-Mar 2012
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Research
Apr 2012-Feb 2013
• Drafting of chapters
• Engagement with
BIS & HMT
Synthesis
Feb-Jul 2013
Launch
28 October 2013
37 commissioned evidence papers, 2000+pages
3 international workshops
Engagement with industry
UK roundtable events
Changing nature of manufacturing
By 2050:
Manufacturing will
be a complex,
value creating
system. Emphasis
not on production
or services but on
flexing business
models and
offerings to create
value in new and
interesting ways.
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Technological change and uncertainty
By 2050: technology will drive a revolution…
• Incremental leaps forward
(pervasive ICT; integration of
sensors = big data; application of
materials; sustainability)
• Radical developments (biological
& medical developments; additive)
• Disruptive breakthroughs (unknown)
…changing how products are designed, offered
and used by customers
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Environmental change and uncertainty
By 2050: sustainability will no longer be optional…
• Resources (materials, water, energy, land)
• Population (3 billion more people) wealth / age
• Climate change (weather events)
• ‘Pricing the Environment’
• Standards
• Consumer pull
…business models
will have to shift to
reduce exposure to
commodity shocks &
exploit opportunities
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Sociological change and uncertainty
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Employment (000s)
GVA (2006m)
By 2050: we will have seen jobless growth…
• 170k fewer roles by 2020, no return to mass cuts current employment levels just under 3 million
• 800k roles to fill by 2020 (ageing population a factor)
demand for professionals, ‘hybrid’ expertise, STEM
• Potential for cognitive / physical enhancement?
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…with strong demand for workers with ‘hybrid’
expertise as countries compete on quality
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International perspectives on
change and uncertainty
5 areas of long term shared interest emerged from
workshops in Berlin, Washington DC and Singapore:
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Sustainability (emphasis on resource efficiency)
Education and skills
Automation
Big data
New models of distributed manufacturing
Interests highlight fascinating balances:
(1) Investment in automation versus jobs
(2) Global versus local supply chains
(3) Distributed versus traditional manufacturing
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1. More than making a product and selling it
• Services with products e.g. Rolls Royce
• Selling of technological ‘know how’ e.g. ARM
• Remanufacturing of products e.g. JCB / Caterpillar
Manufacturers will increasingly make use of a wider
value chain to create revenue.
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Foresight Future of Manufacturing Project: 7th November 2013
Share of manufacturing exports in manufacturing output
#FoMn #manufacturing
2. Faster, more responsive and closer to customers
• Mass personalisation of products on demand
• Distributed: big high-tech, modular, home, mobile
• Greater design freedom
• More digital connections along value chains
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Foresight Future of Manufacturing Project: 7th November 2013
Share of manufacturing exports in manufacturing output
#FoMn #manufacturing
3. Exposed to new
market opportunities
• Changes to personal wealth / ageing populations
• BRICs and the ‘Next 11’
• Continued global ‘fragmentation’ of the value chain
• Some ‘onshoring’
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Foresight Future of Manufacturing Project: 7th November 2013
Share of manufacturing exports in manufacturing output
#FoMn #manufacturing
4. Increasingly dependent
on highly skilled workers
• Strong demand for manufacturing workers
• A need to accommodate more older workers
• Importance of STEM qualifications
• Blending of technical & commercial ‘hybrid’ skills
• Potential for human enhancement
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Foresight Future of Manufacturing Project: 7th November 2013
Share of manufacturing exports in manufacturing output
#FoMn #manufacturing
5. More sustainable
• Growing / urban populations raise resource demand
• Climate change and global supply chain vulnerability
• Volatility in price & availability of commodities
• Reuse, remanufacturing, recycling: circular economy
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Foresight Future of Manufacturing Project: 7th November 2013
Share of manufacturing exports in manufacturing output
Foresight Future of Manufacturing Project: 30th October 2013
Future of manufacturing
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Lean & Clean: (eco)-efficiency
Never can say goodbye: closed loop
Make it anywhere: local making
Keeping in touch, experiments, selling service
Knowing me, knowing you: using big data
Kissing frogs: new collaborations
Slow making, provenance, high value
this is a personal (Steve Evans) picture