Resources Manufacturing & Automation

Powering Up Manufacturing, Levelling Up Britain

    Report added by Vodafone Business on 2 Aug 2021
Manufacturing is vital to the UK economy as a whole, but it is particularly important outside London and the South East of England.

Executive summary

Manufacturing is vital to the UK economy as a whole, but it is particularly important outside London and the South East of England: it is responsible for over 17% of Wales’s total national output, and over 16% of the West Midlands’, for example, compared to less than 2% of London’s. That means improving manufacturing productivity across the board has a relatively higher impact in some regions and nations of the country than others – and in fact, those regions and nations correspond to those that are the main focus of the Government’s “levelling up” agenda.

This report looks at the potential for digital technology, and in particular new applications of 5G delivered via mobile private networks (MPNs) and Internet of Things (IoT) technology, to improve the productivity of UK manufacturing. It describes some of those new applications, which are already being deployed in factories around the world – and includes a case study where Vodafone is working with industrial partners to transform their operations with 5G. And it calculates the boost to UK national and regional productivity if take-up of 5G in the UK manufacturing sector reaches the level by 2030 that evidence from the US suggests is possible.

Our new analysis finds that the increase in manufacturing Gross Value Added (GVA) across the UK would be £3.6 billion per year in 2025 and £6.3 billion per year in 2030, and that while all regions and nations would benefit from this in absolute terms, the highest relative GVA impact would be felt in Wales, the West Midlands, East Midlands, North West and North East. The lowest relative impact would be in London and the South East, reflecting the size of their manufacturing sectors compared to other sectors.

Improving manufacturing productivity through effective deployment of 5G and IoT would not just ensure that the UK does not fall behind other countries which are starting to adopt this new technology, but would disproportionately benefit so- called “left behind” regions and make a positive contribution to “levelling up”. A growth in UK manufacturing would also support the Government’s Global Britain ambitions, with manufacturing already making up a significant proportion of UK exports.

There is a strong case for the Government to adopt measures, in the forthcoming Levelling Up White Paper and elsewhere, which will encourage and support manufacturers to look seriously at how 5G could improve their operations, and to take it up where possible. If we get it right, manufacturing can play its part in ensuring that the whole of the UK can benefit from improvements to the economy.

Previous research commissioned by Vodafone found that 5G could add £150 billion to the UK economy by 2030.1
But to achieve these wider economic and societal benefits, significant investment is required to roll-out and maintain
5G networks, build more mobile sites and develop new 5G applications and technologies. The uptake of 5G in the manufacturing sector would not only deliver productivity gains, but would also create a virtuous circle by opening up new and much needed revenues for mobile network operators. These new revenue streams can then be reinvested in the roll- out of 5G network infrastructure and development of new applications which will benefit smaller businesses which are less likely to have the economies of scale to invest in MPNs and consumers more generally – a win-win situation.

We recommend:

  • Aiming high, with an ambitious and measurable government target that over the next decade the UK will become a global leader in the use of 5G technology in manufacturing.
  • Incentivising investment, with policies to support manufacturers to upgrade their facilities with 5G MPNs and the expansion of the Made Smarter Adoption programme.
  • Supporting innovation, by putting more focus and resources in the industrialisation of 5G with an extension of the Industrial 5G Testbeds and Trials programme by another five years and an increase in funding for manufacturing trials to at least £60 million; the introduction of regional 5G test and innovation centres, starting in those regions and nations which stand to gain most from take-up of 5G in manufacturing; and the creation of at least one new regional industry cluster focused on innovation in manufacturing, including through the application of 5G and IoT technology.