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Blog - Published 16th November 2016

Innovation at the Heart of UK Manufacturing

The future of UK manufacturing

Manufacturers large and small descended on Innovate 2016 in Manchester at the beginning of November to discuss the current state of manufacturing and what the future may hold for the industry.

The conference also showcased new technology, systems and practices that could bring a welcomed boost to manufacturers and help them remain competitive.

Sam Swansborough from Menzies Innovation and R&D Tax Team went along to find out what developments are expected for UK manufacturers in the next few years.

Current Health of Manufacturing

Innovate 2016 - a manufacturing focusAlthough many challenges face manufacturers at this time the conference started off by highlighting the strength of the UK manufacturing sector. The UK is currently 9th in the world for manufacturing output and this makes up 10% of our gross value added supplies.

UK manufacturing employs 2.7 million people, produces 44% of our exports and makes up 68% of business research and development expenditure.

These figures suggest that UK manufacturing is a vital and vibrant sector but how do we keep up with global competition and climb the output rankings?

The Future of UK Manufacturing


Experts attending the conference such as Simon Edmonds (Director of Manufacturing and Materials at Innovate UK), agreed that the following five key areas needed to be focused upon by UK manufacturers to gain a competitive advantage:

  1. Collaborative design between virtual teams
  2. Connected services by bringing more assets online and joining the internet of things
  3. Increased customer experience and introducing a more personalised engagement
  4. Flexible manufacturing such as the increased use of 3D printing technology
  5. Serving customers as a market of one with more customisation.

These areas point towards moving away from the traditional manufacture of a final product with a fixed value to a model of the product as a service creating an income stream over the entire life of the asset.

However, a barrier to embarking on such innovation in the manufacturing life cycle is the investment required to develop the technology. To ease this burden there are a couple of excellent funding opportunities available.

Closing the Funding Gap

Sam Swansborough_320X238Innovative manufacturers can claim funding through HM Revenue and Customs R&D tax credit system. This can provide additional funding of up to 26% of the qualifying revenue costs incurred on creating or appreciable improving a process, material, device, product or service.

The funding is claimed via a company’s corporation tax return and is received either through a reduction in its tax liability or, if it is loss-making, a cash purchase of those R&D losses.

Innovate UK, a public body sponsored by the Department for Business, Energy and Industrial Strategy, run many grant funding competitions throughout the year. For example, over the next few months Innovate UK aim to make available £137 million of funding to innovative manufacturers across a series of competitions.

Catapult Centres

catapult-manufacturingIn addition to the funding assistance the High Value Manufacturing Catapult has seven centres across the UK that offer access to world-class equipment, expertise and collaborative opportunities. The centres work with manufacturing businesses of all sizes and from all sectors to help turn ideas into commercial applications.

Menzies has the depth of experience and knowledge to assist with applications for either or both funding routes. Our manufacturing sector focus has enabled us to make many valuable connections in the industry to help our clients grow and achieve success.

If you would like to know more please contact Caroline Milton, Head of the Manufacturing Sector, by email cmilton@menzies.co.uk or by phone on 01372 366173, or Sam Swansborough, R&D Tax Manager and member of our Innovation and R&D Tax Team by emailing sswansborough@menzies.co.uk or by phone on 01372 360130.

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