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Day 1 – Investment in Manufacturing Robotics Could Boost Economy by £60bn

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  • Investing an additional £1.2bn in automation has the potential to add as much as £60.5bn to the UK economy over the next decade; this represents a return on investment of £49 in economic output for the every £1 invested in manufacturing automation
  • With this investment, the UK manufacturing sector will grow to £191bn in 2025, a £38bn increase on the value of UK manufacturing today, safeguarding 105,800 jobs across the economy
  • More than half (58%) of British manufacturers already invest in automation, and 76% believe there are opportunities for further investment

Investing an additional £1.2bn into manufacturing processes, to increase robotics and automation over the next decade could add as much as £60.5bn to the UK economy over the next decade, forecasts new research from Barclays. This is equivalent to nearly two fifths of the manufacturing sector’s value to the economy today.

The ‘Future-proofing UK manufacturing report reveals that investing in automation technology will help to increase the international competitiveness of the UK’s manufacturing sector through increased manufacturing productivity and efficiency. As a result of additional investment, the manufacturing sector will be worth £191bn[1] in 2025, £8.6bn more than currently projected and a 19.6% increase on today.

Furthermore, increased investment in automation will help to soften the expected long-term decline in manufacturing sector jobs by safeguarding 73,500 additional workers in 2025, due to the creation of a larger, more productive and competitive UK manufacturing sector.

In addition, 32,300 more jobs will be supported elsewhere in the economy through the generation of more business in the supply chain, from raw materials through to logistics, as well as the effect of workers spending more widely in the economy. In 2025 alone this is forecast to represent an additional stimulus worth £3.9bn.

Karen Thomas, Head of Corporate and Business banking for Barclays in Cardiff and South Wales Valleys said:

This report highlights the importance of investing in robotics and automation for manufacturers as a potential solution to the on-going ‘productivity puzzle’.  By investing an additional £1.2bn in automation technologies over the next decade, the UK manufacturing sector is forecast to create an additional £60.5bn of economic output and safeguard more than 105,800 jobs throughout the wider economy.

“However, to reap these rewards we need to address some of the barriers to investment including the need for more user-friendly and flexible technology, addressing skills barriers within the sector and supporting manufacturers to access the funding and information already available to them for robotics investment.”   

Pharmaceutical and food manufacturing sectors most likely to benefit

The pharmaceutical and food manufacturing industries have the most to gain from further investments in automation with the research showing a more than 10% increase in output between 2016-2020 and close to a 25% rise between 2020-2025 for both sectors. This will be driven by the two sectors’ comparatively large existing base in terms of size and take up of automation technology, and by the relative ease of application of automation technology to both sectors.

More than half of British manufacturers already invest in automation

The research found that more than half (58%) of British manufacturers surveyed report that they have already invested in automation and, of these, two-thirds (65%) felt that they are more productive as a result.  Furthermore, 76% of British manufacturers report that they believe there are opportunities for further investment in their business with parts manufacturing (24%) assembly (15%) and packaging (12%) identified as areas of the business with the greatest potential for future investment in automation technology.

Access to funding needed to increase automation uptake

The research* also shows that British manufacturers are nearly as likely to report investing in automation as their German counterparts (58% vs 66% respectively). This indicates a wide base of existing investment for the British industry to build from if barriers to investment can be addressed.

British manufacturers cited factors such as the availability of both internal and external funding (23% and 15% respectively), competing demands for capital expenditure (26%), limitations with current technology (18%), return on investment (16%), concerns over workforce morale (11%) and relevant skills (10%) as barriers to greater automation investment in the past 12 months.

In addition, to help increase investment further, 28% of respondents also highlighted the need for more flexible equipment, where one piece of equipment can accomplish multiple tasks, greater access to external funding (26%), support with technology implementation (18%), and more education and information on the benefits of automation adoption (17%).

[1] This is a Gross Value Added figure, it is a measure of the contribution to the economy of each individual producer, industry or sector in the UK. It is used in the estimation of gross domestic product, but excludes taxes.