Speech by: Lord Mandelson
Venue: Advanced Manufacturing Launch
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There’s a terrible, lazy assumption made about modern Britain, and that is that we don’t make anything in this country anymore.
The reality is that British Manufacturing employs more people than the financial services sector. We are the sixth largest manufacturer in the world and manufacturing is one of our biggest exports.
So much for the myth therefore that manufacturing is dead in Britain.
And for that reason it’s critical for Britain’s fight back to growth and in the decades ahead, for us to back manufacturing. And to back manufacturing means backing advanced manufacturing.
Our future is in advanced manufacturing because that is where our competitive advantage lies.
There’s no denying British manufacturing has changed dramatically over the last 30 years – and it’s been difficult change, often involving painful and difficult adjustments for companies and their workforce. But what has emerged from that transformation is a world-leading 21st century manufacturing base in Britain.
We still have the residual image, or some people do, of 30 years ago: of smokestacks and factory gates. But manufacturing is not a muscle job anymore – unless you want to categorise the brain as a muscle. It is right smack at the centre of our knowledge economy – with high skilled jobs and representing 75% of British business R&D.
It is about niches and it’s about supply chains – high value supply chains, where we are more often building high-value components rather than finished consumer goods: what I’ve called ‘company clusters’ built around ecosystems of often hundreds of suppliers. This is a world where our best manufacturing companies, as I say, will be making individual components to slot into the high value end of the production market, as often as they make finished consumer products.
And above all it is about science and technology and sophisticated skills in innovation, in design and production.
At the cutting edge
Today is about the manufacturing that we do right at the cutting edge.
This is where the low carbon solutions are being found. Where new industrial platform technologies like plastic electronics, industrial bio-technologies, lightweight composite materials and silicon electronics are reshaping the way we think about certain products.
The point is that these technologies, and others like this, are transforming the production of everything from lipsticks to solar cells, to civil nuclear components and next generation vehicles.
These are areas where Britain has immense potential. We are already a leader. But we have to remain, all the time, ahead of the curve, because the competition is always catching up with us. And therefore, if we stand still, we will simply fall behind.
We also need to recognise the risks involved in trying to succeed in high-growth industries and technologies at an early stage of development. Risky expensive barriers, especially in the current economic conditions, from which in my view it is the Government’s job to help set businesses free. Our job is to take away those barriers which hold back the development of innovative and potentially high growing companies using these technologies.
So that’s where I believe there’s a clear role and responsibility for Government in making sure we have the best possible business environment and skilled workforce for advanced manufacturing.
We can’t do the work of the entrepreneurs – nor should we try. And we can’t displace the private sector. We can’t replicate markets – that’s not the job of Government. But where there are barriers holding such business back, our job is to intervene, and try to minimise or pull away those barriers to allow for that business growth to take place. And that’s the remit of this department, our new Department for Business, Innovation and Skills.
Today’s package
Today, we’re launching a package of major new measures to help UK advanced manufacturers seize these new opportunities.
It comprises more than £150 million of targeted investment that will increase your access to information and support; help boost our skills base, encourage the take up of new technologies and tackle challenges faced by specific sectors such as aerospace.
It includes: £45 million from the Strategic Investment Fund to help develop low-carbon aircraft engine technology. We have a good track record, but again, there are others who are catching up and we are at risk of being overtaken; so we have to stay ahead of the game.
Not only advancing and perfecting products, but making sure products and their engineering processes form part of our transition to a low carbon economy. And for that, the Government’s low carbon industrial strategy and our wider manufacturing industrial objectives and strategy are going to underpin what Government in total can do to support that activity.
£40 million of support for the SAMULET Research and Technology Programme which will strengthen the position of UK aero-engine manufacturing and its supply chain through new technologies.
A significant expansion of the Printable Electronics Centre (PETec) in Sedgefield, creating up to 1,500 new jobs in the next 5 years. I’ve been to that Centre – it has huge potential; the foundations are great; it has a long way further to go and to expand.
And developing a Centre for Excellence in Silicon Design in the South West. Both exciting technologies with huge potential.
We’re increasing access to the services available through our highly successful Manufacturing Advisory Service to enable businesses across the industry benefit from low-carbon and other growing markets. Four companies, including the excellent high-potential growth company we visited in Cambridge this morning – and three others here now – have told me how their businesses have benefitted from the support provided by the Manufacturing Advisory Service.
I congratulate them, thank them, and now they’re going to have to do more with additional resource that we are putting in to the service.
And we’re investing £45 million of funding in Rolls-Royce to build four new Advanced Manufacturing Facilities in the UK - creating and sustaining around 800 jobs and sharpening Britain’s competitive edge in aerospace and civil nuclear global supply chains.
As the advanced manufacturing industries of the future evolve, we will be right behind them as a Government. With strategies on skills, innovation and venture capital that make sure they have the platform they need for global competition.
I was very pleased that we were able to launch the Innovation Investment Fund – seed-corn investment of £150m; over the next ten years I am confident that it will grow into a venture capital fund of £1bn in scale and size; in order to help back innovative companies that need growth capital.
I want to thank the Ministerial Advisory Group, the TSB, the Regional Development Agencies – which play an essential role in deepening our industrial strategies and activism in every part of the country – the CBI, and all of the companies involved in today’s important step forward.
Conclusion - Looking to the Future
If there are two messages that I want people to take away from today’s launch it’s this.
First, that modern British manufacturing matters to our future. I’d go further – it is indispensible for our future. Which is why I am determined that this Government should continue to play its part in putting in place the conditions for our future success.
It is vital to our balanced economic mix in this country. It is at the heart of Britain’s knowledge economy. As one of the UK’s biggest exports, advanced manufacturing can and must be key to our recovery from recession. The next generation of British entrepreneurs, scientists and engineers will be among the most important Britain has ever produced. And we must back them and invest in them now.
But the second part of my answer is, this is not a government that believes in the post-industrial economy. That’s what you get when you have an internet consultant with too much time on his hands. We are committed to creating the conditions in which British manufacturing can compete and prosper. We are not, therefore, a post-industrial economy. And that is what today is about. And today is, I hope, just the start of the development and evolution of our active industrial policies that will see Government backing where there is opportunity for that intervention to place; as long as we can be sure that, as a result of our action, real impact is the result.
So – opportunity and impact. Those will be the criteria which the Government will refer to as we develop our industrial activism. And I’m very grateful for you for coming here today to start that.