In Depth

Is the UK ready for a new industrial revolution?

Reshaping the post-Brexit economy could deliver huge benefits - but only with greater ambition from government, says a new report

A new industrial revolution could reshape Britain’s manufacturing sector, unlock £445bn and create thousands of new jobs, according to a report on a radical way forward for the country’s post-Brexit economy.

An independent review led by Jurgen Maier, the British boss of engineering giant Siemens, recommends a deal between government and industry to put Britain at the forefront of new technologies such as robotics, artificial intelligence, 3D printing, and virtual reality.

Writing in The Daily Telegraph, Maier said: “The Government’s industrial strategy will need a red thread of digital running through its core. It will not be about reviving long gone industries but rather it will be about building the new ones.”

 Written after an eight-month consultation with more than 200 companies, including Rolls Royce and Accenture, as well as leading universities, the proposals include a programme to re-skill workers, tax incentives for manufacturing firms, establishing 12 digital research centres to improve innovation and capability - and a national commission on industrial digital technologies.

Maier says this could generate hundreds of billions of pounds for the economy, create 175,000 highly skilled jobs and serve as an “antidote” to some of the tough challenges and higher costs facing the manufacturing sector as a result of the Brexit vote.

Many analysts have warned the threat of Brexit, combined with the rise of automation, could destroy the country’s remaining manufacturing base. While the sector has declined in most advanced countries over the last 30 years, “the UK has seen a particularly marked drop-off”, says The Independent. Manufacturing made up 20% of the UK economy in 1990, compared to just 10% in 2015.

While highlighting the huge possibilities afforded by a new industrial revolution, Maier told the BBC’s Today programme the UK needed “greater ambition” to take advantage of such technology and said a huge number of workers would need to be retrained, as those who failed to adapt would lose their jobs.

“On the one hand it is going to create productivity and more exports and through that we can create more jobs but at the same time robotics and artificial intelligence will displace some jobs,” he said. “We need to upskill one million existing workers in the industrial and manufacturing sector... so they can transition from tasks that might be displaced to, for example, managing or programming robots.”

Backing the proposals, CBI director-general Carolyn Fairbairn reiterated the threat Britain faced from international competitors.

“The UK must compete with China, the USA and much of Europe where there are already advanced plans to embrace the fourth industrial revolution,” she said.

Writing on Conservative Home, Tory MP Alan Mack said a post-Brexit Global Britain must look to the likes of China, whose own “Made in China 2025” programme is designed to upgrade Chinese industry to harness new technologies.

“As the [new industrial revolution] accelerates, we must remember the lessons of the past” he said, “early adopters and fast-moving nations will be rewarded, while countries that fall behind will feel the consequences for centuries to come”.

“China views the race for success in the [new industrial revolution] in global terms, and in Britain we must do the same.”

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