Prospects and pressures

Despite suffering a series of hammer blows over the last five years, including the longest and deepest recession since WWII, British manufacturing has proved remarkably resilient. I believe the sector – along with the rest of the economy – is now firmly on the road to recovery. However, the ride is unlikely to be entirely smooth. For me, we face three big challenges in the coming year. The first is how SMEs raise their game in terms of exports. This applies to companies that: - Aren't exporting at the moment, but want to? - Are already exporting, but are seeking opportunities in developing markets? Many agencies – the British Chambers of Commerce and UK Trade & Investment among them – have excellent initiatives to help manufacturers rise to the export challenge. However, my question is: How are we going to bring all this admirable work together in a simplified, coherent, cohesive approach that maximises the results? This remains a big challenge. My second challenge concerns rising energy costs, which constrain the ability of UK manufacturers to secure investment and adversely impact upon their competitiveness. The harsh reality is that many of our European competitors pay far less for their energy than we do and this is damaging our competitiveness. I have spoken to too many UK businesses whose margins are being wiped out by high energy costs. That's why I believe we need a clearer picture of where the government's energy policy is taking us. The third challenge revolves around skills: How do we make the workforce of today (and tomorrow) fit for business? I believe the country as a whole could learn from some of the skills initiaitives run in my own region of Sheffield. For example, Work-wise is an employer-led initiative designed to help young people gain the knowledge and skills to place them at the head of the queue to take up employment opportunities. It involves things like employability training and work placements in manufacturing companies. Another example is RISE Sheffield, a city-wide programme designed to increase graduate employment in SMEs. RISE is a collaboration between Sheffield City Council, Sheffield Hallam University, the University of Sheffield and the private sector. And that's the point – the key to success in these types of schemes is a solid partnership between business and academia. By engaging with schools and colleges, companies can help young people experience the world of work which creates a platform from which they can move onto other learning opportunities like apprenticeships. The Company of Cutlers in Hallamshire is a good illustration of this. It is working with schools around Sheffield to place manufacturing onto the school curriculum and get 14 to 16-year-olds interested, engaged and inspired by the prospect of manufacturing and engineering as a career. Indeed, a manufacturing career has a great deal to offer enthusiastic and motivated youngsters, not least because of the growing number of opportunities opening up in the sector. I believe the two most important current business opportunities involve large infrastructure projects – namely, the High-Speed 2 (HS2) rail link and nuclear energy. It is, in my view, vital that we wring every penny of economic benefit from these projects. Ensure that UK?companies derive the benefits HS2 will have a multi-billion pound supply chain attached to it and we need to seize the opportunities resulting from this. I believe we should also exploit the opportunities that arise as a result of the recent news that the government and EDF Energy have agreed a strike price for new-build nuclear power stations. This has created a £20 billion supply chain. The question is, how will we ensure that UK companies – rather than their foreign competitors – secure the benefits that will arise from this? The Nuclear Advanced Manufacturing Research Centre (NAMRC) in Rotherham has developed the Fit For Nuclear (F4N) assessment to help companies measure their current operations against the standards required to supply the UK's new generation of nuclear power stations, and take the necessary steps to enter this £40 billion global market. This sort of support is invaluable. We need to move away from the mindset that insists 'we don't know what's happening with nuclear' to one of 'how are we going to engage to make sure our businesses derive the maximum economic opportunities that nuclear will provide?'