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Innovate 2016 - UK manufacturing is still major driver of innovation

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It is a truism that our economy has seen a shift in recent decades from manufacturing to services. However, the extent of this shift is perhaps often overstated.

Manufacturing has far from gone away and it remains a major driver of innovation, of exports, and of prosperity.

The UK is 9th biggest in terms of manufacturing output globally, and it represents 11% of our economy.

Services around manufacturing add value

Adding value to increase customer satisfaction

However, if we include the services around manufacturing, that add so much value, this figure should perhaps be doubled.

Our strength of expertise in services can offer much to manufacturers who are prepared to think in more depth beyond their factory gates, for example, about:

  • their customers
  • the end users
  • products’ failure modes
  • what happens at the end of a product’s life

A greater emphasis on the service that is delivered by manufactured products can yield ideas for additional ways of retaining or adding value to the product and the system around it, including:

  • ideas for product improvements
  • alternative ways of earning revenues
  • differentiation in the marketplace

These can deliver enhanced sustainability and brand value, and indeed new sources of revenues.

We’ve only tapped the tip of the iceberg of services

At a recent conference in Cambridge, I heard the scale of untapped opportunities described as akin to an iceberg, in other words:

the value that manufacturers can readily see is a mere fraction of the opportunities which exist beyond the obvious.

I remember becoming aware of this notion in connection with using the eco innovation compass, developed by Dow over ten years ago.

Circular economy is the future of manufacturing

My interest in this field really took off, however, with my engagement in the “circular economy” which offers manufacturers the promise of:

  • reduced costs and risks
  • additional revenues
  • enhanced sustainability
  • enhanced CSR

Innovate UK strongly support circular economy


By helping businesses access Innovate UK funding in this space, and through programmes such as REBus, I’ve become closer to a variety of businesses, big and small, and across a surprising variety of sectors, that are thinking about their business in a different way – bringing innovation into:

  • the product development
  • supply chain
  • business model

These include companies looking to sell lighting as a service, offering furniture for life, and the likes of Caterpillar and Ricoh reducing their material costs by remanufacturing their products.

Lighting as a service

Digitalisation is changing the face of manufacturing

There is now a whole new raft of innovation springing forth as a result of “digital” and the related technologies that fall under the umbrella of the term “Industry 4.0”. This includes:

  • the internet of things,
  • cloud-based data and communications,technologies such as additive manufacturing

Benefits for the customer include enhanced tailoring of product to the individual customer – “the market of one”.

KTN and Innovate UK have recognised the significance of these ideas and many competitions over recent years have explicitly picked on them.

Most recently the materials and manufacturing competition brief highlighted the opportunities for:

  • diversification of product and service lines to serve new markets
  • the development of novel services that open up new sources of revenue from manufacturing

Hear about adding value through services at Innovate 2016

To find out more, come and hear from businesses and academics, who have been doing great things in this space, at the dedicated

It will explore how advanced services, and the shift in thinking from product to service, might be part of what is being referred to as a “fourth industrial revolution”.

Confirmed speakers include:

Find out more

You might also be interested to check out these links and initiatives:

You can follow me on Twitter: @BenPeace

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