Tag: future of manufacturing

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Improving supply chain ethics with the industrial metaverse

Nikolai Kazantsev (IfM, University of Cambridge), Russell Goh (IfM), Bethan Moncur (IfM), and Chander Velu (IfM)

In today’s globalised business world, there is a growing need for ethical supply chain practices. Manufacturing companies are facing complex challenges in modern production, and the importance of transparency and accountability has never been greater.

In this article, leading InterAct funded researchers from the Institute for Manufacturing (IfM) at the University of Cambridge explore the potential of the industrial metaverse to help elevate ethical standards across supply chains. Examining the intersection of technology and ethics, the IfM team offers valuable insights into how manufacturers can navigate regulatory environments, build consumer trust, and promote positive social change.

In a world of globalised supply chains, manufacturing firms often lack awareness and control of their external operations, which can result in unintentional non-compliance with regulations. While forced labour generates $236 billion in illegal profits annually (International Labour Organization), European companies will soon have to show compliance with environmental and human rights standards within their supply chains.

In response to mounting concerns, Europe is poised to implement stringent measures to hold corporations accountable for their supply chain practices. The forthcoming ‘Corporate Sustainability Due Diligence Directive’ heralds a new era of corporate responsibility. Large companies must conduct comprehensive audits of their supply chains, identifying and rectifying instances of forced labour and environmental degradation. Compliance will hinge on demonstrating adherence of the supply chain ecosystem to human rights and environmental standards.

The regulatory landscape is not confined to Europe alone. The UK, through initiatives like the Modern Slavery Act of 2005, has committed to fostering transparency within supply chains to eradicate all forms of worker exploitation. Moreover, further legislative reforms are on the horizon, promising a paradigm shift in corporate accountability.

How high is the risk of being penalised for suppliers’ actions?

Currently, the lack of production transparency allows non-ethical manufacturers to cut corners, giving them a competitive cost advantage that appeals to consumers. Unfortunately, many of these consumers are unaware of the wider context and end up supporting production that causes serious harm to societies and the planet.

Manufacturers can’t wait for new regulations about environmental and human rights standards in the UK. They must lead the development of digital tools for their production environments that delve into the existing supply chain data. This will demonstrate that their products are made with minimal adverse impact.

To enable this, it is crucial to make the production processes more transparent. One possible way to achieve this transparency is by leveraging augmented reality technologies, which can interpret and explain the existing complex data along supply chain echelons and incentivise the creation of new data sources.

So, in light of these developments, how can manufacturers ensure compliance with the new regulations and help uphold human rights and environmental protection?

The industrial metaverse: the foundation for a more transparent supply chain?

Recent research conducted by IfM (supported by the UKRI Made Smarter Innovation Challenge and funded via the Economic and Social Science Research Council (ESRC)-led InterAct Network) offers an extensive overview of 1,680 international studies which reveal how extended reality technologies can support UK manufacturing by demonstrating production provenance in the Industrial Metaverse.

The Metaverse is a term used to describe the merging of the physical and digital worlds. It was first introduced by Neal Stephenson in his novel Snow Crash and later popularised by Mark Zuckerberg with Meta, a social network in extended reality.

The Industrial Metaverse comprises a series of ‘snapshots of realities’ around the data on sourcing, production, and delivery of components of a manufactured product, which can be explored in augmented reality. By exploring the upstream supply chain of components leading to the product, manufacturers can identify risks and take corrective action to comply with upcoming regulations.

Deploying industrial metaverse technology in practice requires:

  • access to data sources;
  • software (e.g. Unity Engine);
  • augmented reality headsets (e.g. Microsoft Hololens, Meta).

Although 3D virtual productions might look complex and expensive, new AI techniques such as Gaussian splatting can significantly reduce the cost of reality reproduction: a ‘reality snapshot’ can now be created by anyone using a smartphone. This means, UK manufacturers can demand the video screening of the production environment from potential suppliers at the procurement stage. This is where lower-tier suppliers are incentivised to agree to increase transparency in exchange for eligibility to sell products and services.  Decentralised databases can be used to store this information at the supply chain level. It is important to note that creating fake snapshots could lead to legal repercussions and regulatory requirements.

Case study: contrasting opaque and transparent chocolate supply chains

Agriculture is almost uniquely resistant to technological change because of the remoteness/lack of oversight/scale of sites, and it is an area desperately in need of innovation. Leading chocolate brands have long been criticised for neglecting ethical standards in cocoa procurement, and many of the brands can’t effectively enact change since the market behind wholesalers is not transparent. This situation creates a high risk potential for social injustice and modern slavery, i.e. when the wholesaler purchasing prices make cocoa sales below the point of profitability, and farmers are forced to take children out of school to work on the farm.

Industrial metaverse, established along such supply chains, can spur transparency and influence to change the status quo. As European consumers are the primary market for cocoa harvesting, they have the market power to improve conditions for farmers in West Africa. To end forced labour and enable children to access education, requires new tools that support the transparency of cocoa supply chains for consumers.

While labour and environmental abuses exist in many supply chains, shocking 60% of cocoa-growing households in Ghana’s upstream cocoa supply chain are estimated to use child labour. Ensuring manfuacturers and consumers have access to accurate information about these unethical practices is therefore an urgent issue. A famous example of good practice is the ‘Bean to bar’ Tracker, along with QR codes,  barcodes,  biological markers of specific farms and fermentation processing locations, all of which can link chocolate bars to their potential origin. By comparing the known land size of a farm and the claimed cocoa harvest from that land, we can identify if cocoa of unknown origin is blended into the batch. While such tools are currently being used internally for supply chain traceability, adding an Industrial Metaverse component can open up and showcase the evidence to consumers. Consumers will be able to witness vivid experiences demonstrating the potential impact of supporting the chosen brand. This can showcase the positive changes to society (e.g. freeing children labouring to get an education) or highlight negative practices (e.g. the realities of environmental damage or modern slavery). Such evidence can build a strong identification that by purchasing ethical brands, consumers will be supporting the continuity of ethical production practices and local communities’ upstream supply chains.

Transforming production practices in the industrial metaverse

The Industrial Metaverse will increasingly move from merely representing reality, to shaping it. By shifting demand to ethical products, manufacturers will be able to increase their production scale, reducing the cost per unit and creating a greater impetus towards sustainability.

Instead of waiting for new regulations about environmental and human rights standards to be implemented in the UK, manufacturers must lead the development of similar immersive experience prototypes to confirm the ethics of their production environments. Going beyond the food production case, electronics and automotive manufacturers can validate their production processes by establishing an industrial metaverse around their products and demanding ‘reality snapshot’ data from their supply chains. It will propagate the impact across supply chains towards reaching multiple firms worldwide and make production more transparent for consumers. Not only will that reduce risks of non-compliance with upcoming regulations, but it will also anchor consumer demand with positive societal changes along supply chains.  By doing so, manufacturers can champion Sustainable Development Goal 12: “Responsible Consumption and Production”.

What practical steps should manufacturers take from this?
  1. Audit internal cost structures and visibility of operations along supply chains. Instead of aggregating costs at the wholesale level, manufacturers must enquire about the work conditions, energy sources, and potential carbon dioxide emissions through supply chain tiers.
  2. Collaborate with extended reality solution providers to prototype Industrial Metaverse around their products and reveal production ethics along supply chains.
  3. Analyse the integrated data and leverage alternative ways to reduce ethical risks. Communication throughout the industrial sector will help address industrial concerns about data privacy and confidentiality, leading to the industrial standard.

The IfM is currently working on developing a metaverse pilot for highly regulated sectors like aerospace, automotive, and food. These industries have very strict regulations that limit transparency. The goal is to enable a more transparent supply chain, which would contribute to the adherence of human rights and environmental protection. If you would like to collaborate with the team, contact Dr. Nikolai Kazantsev – nk622@cam.ac.uk or IfM Engage.

Acknowledgement: This work was supported by the UKRI Made Smarter Innovation Challenge and the Economic and Social Research Council via InterAct [Grant Reference ES/W007231/1]. We thank Prof Letizia Mortara, Dr Michael Rogerson and Alice Mumford for their feedback on this article.

This article draws from the InterAct report ‘Manufacturing in the Metaverse’

This article was originally published on The Manufacturer

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InterAct delivers message of human insight driven digitalisation at MACH24 and Future of UK Manufacturing Conference

On 16th April, InterAct Co-directors Professor Janet Godsell and Professor Jillian MacBryde joined audiences from across the manufacturing, digital technology, policy and academic communities at MACH24 and the ‘Future of UK Manufacturing’ Conference to discuss the strides InterAct is making to deliver new human insights into the digitalisation of manufacturing.

MACH24 is one of the UK’s largest manufacturing focused trade shows, bringing together over 500 exhibitors – all eager to showcase their latest cutting edge, innovative products and services across many sectors. InterAct was present for three days this year, with a stand in the Engineering Supply Chain Show where researchers and InterAct staff had the chance to engage with dozens of businesses.

The ‘Future of UK Manufacturing’ conference is an event organised by High Value Manufacturing Catapult, EPSRC and the Institute for Manufacturing (IfM), University of Cambridge, which brings together leaders from academia, government and industry. This year’s line up of speakers included: Sarah Sharples, Chief Scientific Advisor for the Department for Transport, Katherine Bennett CBE from the High Value Manufacturing Catapult, Benjamin Nicol from the Advanced Manufacturing team at the Department for Business and Trade, and Professor Jillian MacBryde, InterAct Co-director and Vice-Dean of Strathclyde Business School.

Visiting the events at the NEC, Birmingham and Cutlers’ Hall, Sheffield respectively, Professors Godsell and MacBryde delivered talks focusing on the scope of the InterAct Network’s projects, our growth over the past two years and the exciting forthcoming research outputs.

Discussing her session at the ‘Future of UK Manufacturing’ conference, Professor MacBryde said: “It’s fantastic to have the opportunity to be here with so many voices from across the industry, policy, and academic divide, all discussing how we can drive forward a bold vision for the future of manufacturing in the UK.

We are conducting a lot of really valuable work concerning the integral role of people and human insights in the digitalisation process, and it’s been great to have the opportunity to deliver a overview of what we’re doing to such a receptive audience. The discussions we’ve engaged in here today will definitely help to inform our research going forward.”

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InterAct ‘Future of Work’ team publishes new report on perceptions of manufacturing

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The InterAct ‘Future of Work’ team consisting of Dr. Robert Stewart, Professor Jill MacBryde, Professor Colin Lindsay and Carolina Marin Cadavid (University of Strathclyde) have published a new report drawing from their 2023 survey of UK public perceptions of manufacturing. ‘Making Things Work’ – Perceptions of Manufacturing is an insightful examination of the survey findings that looks at issues such as:

  • Whether people still value (and how positive they feel about) manufacturing in the post-industrial economy, and their awareness of manufacturing in the media
  • What people associate with manufacturing work and jobs, and what qualities they are looking for in jobs that need to be reflected in job offers to attract talent
  • The perceived quality of manufacturing jobs for those currently working in (or familiar with) the sector and whether people would encourage others to enter the sector
  • How new manufacturing technologies are likely to change future jobs and careers in manufacturing
  • How can the sector best attract emerging young and ‘untapped’ talent

Discussing the report findings, Dr. Robert Stewart said: “In the ‘war for talent’ perceptions matter because they provide a snapshot of public opinion about the attraction of the sector and working in manufacturing. They may not measure up against ‘reality’, they may be ‘misinformed’ but ultimately this matters more to many of the people we interviewed than employers and industry stakeholders.

However, if you are wondering how people in the UK look at the sector, or how employers should be best positioned to attract people into manufacturing, ignore them at your peril.

Our results throw up some surprising and interesting findings that we hope will offer insight to, and spark further investigation from, academics, employers, industry stakeholders and UK policy makers.”

access the full report
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InterAct Blog

‘Making Things Work’ – Perceptions of Manufacturing

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Robert Stewart, Jill MacBryde, Colin Lindsay, Carolina Marin Cadavid (University of Strathclyde) & Will Blackshaw (InterAct Network)

The InterAct Network ‘Future of Work’ team has recently completed analysis of a survey of over 2000 people drawn from across the UK to provide insights into their perceptions of the manufacturing sector and jobs.

We hear much about the ongoing ‘war for talent’ in manufacturing and concerns that the older industrial legacy of manufacturing makes it less attractive to jobseekers. In this sense, the emergence of new technologies present both a challenge and an opportunity for employers to positively reshape jobs, careers, and address negative sector imagery through better job quality. Improving job quality in the post-Covid labour market should help manufacturers better compete for emerging Gen Z talent and extend their reach into under-represented groups such as women and minorities.

In the ‘war for talent’ perceptions matter because they provide a snapshot of public opinion about the attraction of working in manufacturing for different groups. They may not measure up against ‘reality’, they may be ‘misinformed’ but ultimately this may not matter to many in our sample. However, if you are looking to attract people into your sector, ignore them at your peril.

Our results confirmed some of the usual suspects but also threw up some surprising and interesting findings that we hope will be useful to employers and industry stakeholders.

People still value manufacturing but visibility is lacking

People still attach a high value to the manufacturing sector, describing it as ‘essential’ for the supply of goods, innovation, prosperity, industrial reputation, living standards, national security, and as a source of local jobs. While most feel positive about manufacturing as an important part of the UK economy, our study identified a weakness in terms of the sectors wider media reach and visibility: less than a third said they saw anything about manufacturing over the past year.

Images of manufacturing work are putting people off

Manufacturing is seen as creative blue-collar work with (on the balance of opinion) poor pay for inflexibile, low status jobs in an old-fashioned sector. On a positive note, of course, manufacturing does mean different things to different people. Gen Z plug into the creative and innovative side of the sector, think pay and security are more likely to be good. The problem for them (and women) is they mainly associate work in the sector with ‘boring old industry’ and think that young people are less aware of digital careers in manufacturing. This latter finding is similar to those more familiar with manufacturing work (workers) but they think of the sector as modern with very reasonable amounts of quality in jobs. One of the questions, this raises for us is how does the sector translate some of these positive insider images (creative purposeful work with career opportunities) to a wider ‘uninformed’ audience? Rightly or wrongly, nearly a fifth of our sample associate manufacturing with poorly paid work.

Does job quality matter in manufacturing?

The short answer is that job quality (whether we express that in terms of ‘good jobs’ or ‘fair work’) tells us what people are looking for in work, including manufacturing. Good job quality is essential for attracting new talent and retaining skilled workers. In our sample, quality is largely driven by pay, wellbeing and flexibility, a desire for clean and safe working environments, contractual security and stability, and employee voice. Gen Z have a strong desire for ‘employee voice’ (where their opinions are heard and valued), whilst women have a strong preference for employers offering wellbeing and flexibility practices.

The good news? Job quality for those people in the sample who currently work in manufacturing looks reasonably satisfactory. Over three-fifths of workers identify manufacturing work as purposeful, delivering reasonable levels of contractual stability, career development, EDI, and safe work. Interestingly, this still means that a significant number of workers don’t rate manufacturing jobs as purposeful and, also jobs appear to be slightly ‘weaker’ on pay, wellbeing (and flexibility), and employee voice. There are some good messages on job quality to sell the sector to ‘outsiders’ but more work to be done in reaching, telling, and convincing people, about the benefits and upsides of working in UK manufacturing.

The digital future looks bright but hold back on the shades

Most people think that tomorrow’s manufacturing jobs will be more advanced and hi-tech wit less environmental waste. Although people think that increased leadership diversity will fuel more innovation, over a third are sceptical about whether there really will be more representation from women and minorities in the future.

People have concerns about the destruction of jobs in manufacturing

We hear plenty about people using new technology (especially AI and robotics) to autopilot or co-pilot work and how new manufacturing technologies will continue to replace the ‘dull, dirty and repetitive’ manual tasks. In practice, the technological future will likely be the same old melting pot mix of greater creativity, augmentation, and job destruction. On a positive note, most people think that new technologies will augment (and co-pilot) tasks and people’s skills – upskilling not downskilling – and make jobs more interesting and rewarding for workers. Less reassuring is that just over a quarter think that they will have a destructive impact on the numbers of jobs in the sector. The link between new technologies and their impacts on jobs is a divisive and uncertain issue, with potentially negative implications for attracting talent, workers job stability and security that must be addressed by businesses. It is not surprising that those in the lowest socio-economic groups (those most at risk from job elimination) think more negatively about the impact of new technologies in future manufacturing.

Attracting future talent means more good people practice

Gen Z are the most optimistic about manufacturing jobs of the future. To harness that optimism how should employers’ best harness that potential and attract more digital talent into the sector, particularly from digitally ‘native’ younger generations and from groups such as women and minorities? The largest positive factor for attracting young digital talent and women concerns the promotion of wellbeing and flexibility practices. Young people are perceived as less ‘threatened’ by digital technologies, linked with greater innovation potential but thought to be less aware of digital careers in manufacturing workspaces. There is also a recognition that manufacturing employers may need to refresh their practices to attract more women and minorities into jobs. Working practices and environments need to adapt to become more inclusive.

What does it all mean?

There are some key messages for employers and industry stakeholders from our survey:

  • Keep talking up the value of your sector, people know you are essential and valuable, but the media reach and messaging of the sector isn’t reflecting that effectively.
  • Legacy images of old-fashioned manufacturing work impact negatively on how people look at jobs and careers in the sector. Although job quality is reasonable for many manufacturing workers, more needs to be done selling this message outside the sector to hard-to-reach groups such as women and minorities.
  • People anticipate that new technologies will improve the quality of future manufacturing jobs but have concerns about job destruction and its likely impact on opportunities and job security.
  • Going forward, attracting new talent will mean employers making greater investments in positive people practices in areas such as well-being, flexible working and inclusive workspaces.
Access the full report and survey infographics
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Supply Chain Superwomen boldly draw the future

By Helen Armstrong

“Companies need to figure out now how to survive in the future by selling less.” That was the message Professor Janet Godsell conveyed to female supply chain executives at Supply Chain Superwomen. The event, organised by Supply Chain Media to mark International Women’s Day, proved to be a unique opportunity to share supply chain challenges and visualise future scenarios in an open atmosphere.

Female supply chain executives gathered from across Europe at a hotel at Schiphol Airport on 8 March to attend Supply Chain Superwomen. For many of the 45 participants, normally outnumbered by their male colleagues, the event proved to be an eye-opener as they suddenly realised how many women hold top positions in their field. Supply Chain Superwomen was an opportunity to support each other as role models and to encourage more women to run for top jobs.

Diversity leads to higher profitability

“We need to attract more women into supply chain,” said Martijn Lofvers, founder and chief trendwatcher of Supply Chain Media and chair of the event. “Not only do we have to enlarge the supply chain talent pool, we also know that diversity leads to higher profitability as it brings more insight, better decision-making and it drives innovation.”

According to a recent Gartner and Awesome report the percentage of women in the supply chain workforce in 2023 was 41%, compared with 35% in 2016. Just 34% of first line managers are female, falling further to 31% at senior management level and 26% at senior vice president level. “The percentage of women in supply chain is rising, but it’s not fast enough and requires more action by the talents themselves, their managers and HR managers. It is also imperative for the talents to have a supporting sponsor,’’ said Lofvers.

Building future scenarios

With the focus of the event on innovation, Professor Janet Godsell, dean of Loughborough Business School, UK, was invited to lead a workshop on building future scenarios to stimulate the delegates to think out of the box, to start a journey and to make a bolder first step.

“Women need to be brave in organizations to make disruption,” she said. “Since the industrial revolution we have pursued consumption-driven economic growth based not on what we need but on what we want. Now we recognize that this is destroying the planet, hampering social equity and widening the gap between rich and poor,’’ said Godsell.

Surviving with less sales

‘‘Today we are at a pivotal point and we need to make a fundamental change in the way we pursue growth in order to better balance the environmental, social and economic cost of growth. Looking to the future we have to consider the challenges, the trade-offs and the opportunities. Companies today have to work out how to survive in the future by selling less.”

With that in mind, the workshop based on backcasting, a visual approach to scenario-building by creating postcards, stimulated discussion, decision-making and most importantly drawings that depicted the future, in this case 2040. “Backcasting tries to shake people out of their current mind-set and to get them thinking differently about how a digitally-enabled supply chain can look,” explained Godsell.

Dragon’s Den

Earlier in the day three start-ups were invited to enter the Dragons’ Den and deliver their pitches: Lox Solution, which coordinates all carriers during the last-mile delivery, The Climate Choice, an intelligence platform that collects and audits data to enable scope 3 decarbonization, and Winddle, a supply chain collaborative platform to create ecosystems.

The delegates were invited to spend their money – poker chips in this case – on the start-up that had most potential to help them with their supply chain challenges. While all three were relevant, managing sustainability was the biggest issue for many. Consequently, the winner was Lara Obst of The Climate Choice.

This article was originally published by Supply Chain Movement.

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InterAct partners with Made Smarter Adoption for ‘Technology Transfer Workshop’

As part of Leicester’s Innovation Festival, InterAct partnered with Made Smarter East Midlands (MSEM) to host the latest in their series of Technology Transfer Workshops titled, ‘Increasing Productivity through the Adoption of Digital Technology’ on 9th February, 2024.

The InterAct and MSEM teams gathered a sizeable audience of manufacturers to hear from four Industrial Digital Technology (IDT) providers about solutions designed to assist SME’s with increasing productivity, and the InterAct funded, human insight focused research that can help to support successful implementation.

Attendees had the chance to learn about best practice for adopting new manufacturing technology, minimising implementation time, and maximising upside. Our guest speakers drew on a wealth of expertise to discuss the risks, key challenges, and considerations in adopting digital technology.

Presenters sharing the technologies on offer included:

  • Phil Tonge and Mark Lees of TQC – discussing their design and supply assembly automation, robotics, and testing equipment services.
  • George Slater of FourJaw – examining the how manufacturing analytics technology can use new and existing operational information to power data-driven production planning and strategy.
  • Vignaes Rajesh and Chris Pavelin of Sensopart – delivering a presentation on optical sensors and vision-guided robotic solutions.
  • Nicola Ballantyne of MESTEC – explaining the benefits of MESTEC’s integration of a manufacturing execution system with a traditional ERP framework to integrated front and back office functions more effectively.

Participants then had the opportunity to hear from two InterAct funded researchers from the University of East Anglia, Dr. Dimitrios Dousios and Dr. Antonios Karatzas about their work on application of digitally servitized business models for SME manufacturers. Their online tool offers decision-makers the means to diagnose the contextual and organisational conditions of their business and determine the suitability of digital servitization business models. You can access their full report and toolkit here.

The event concluded with a panel discussion featuring technology providers and InterAct researchers, discussing the challenges associated with digital implementation and improving productivity within the sector, followed by a general networking session and showcase opportunity for businesses and Made Smarter investments.

Made Smarter East Midlands – ‘Technology Transfer Workshops’ are a dynamic series of events dedicated to empowering manufacturing Small and Medium-Sized Enterprises (SMEs) in the East Midlands. Presented by Made Smarter East Midlands, these workshops are specifically designed to show how the adoption of digital technology can help manufacturers solve everyday challenges and capitalise on new opportunities. To find out more about how Made Smarter Adoption can help you, and keep up to date with upcoming events, visit their website.

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People Resilience Resources Sustainability

Manufacturing in the Metaverse

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Research overview

The future of manufacturing will be underpinned by two elements: digital technologies and collaboration. The industrial metaverse is the epitome of these elements, using extended reality to blend the physical and digital worlds to transform how businesses design, manufacture, and interact with objects.

This report presents a coherent summary of established knowledge from academia and practice on the drivers, risks, enablers, and barriers of the industrial metaverse for manufacturing through a systematic literature review. These aspects are explored at three levels of granularity: the individual, the firm, and the manufacturing ecosystem.

As a result of this work, the InterAct funded team has also conceptualised a prototype for an industrial metaverse implementation using a case of cocoa manufacturing.

This research was conducted by Dr. Nikolai Kazantsev, Dr. Bethan Moncur, Russell Goh, Professor Chander Velu (IfM, University of Cambridge). This work was supported by the UKRI Made Smarter Innovation Challenge and the Economic and Social Research Council via InterAct [Grant Reference ES/W007231/1].

For further discussions or to propose potential applications/collaborations, please contact Nikolai Kazantsev.

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UK automotive industry vulnerability revealed in new research findings

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The UK faces being left behind in the electric vehicle revolution, economists have today warned.

Researchers have called for urgent policy intervention and a focused effort to ensure the UK’s automotive industry remains a critical pillar of the British economy.

The report, entitled Powering the Future: Aligning Economic Policy for Automotive Sector Resilience in the face of Critical Material Challenges, offers a comprehensive analysis of the UK’s EV industry.

Researchers Jun Du and Oleksandr Shepotylo, from Aston University’s Centre for Business Prosperity, found that the UK is in a weak position to capitalise on the EV revolution and immediate market opportunities – and such is the pace of change, the opportunity won’t wait for policy makers to catch up.

The UK is currently heavily exposed through its critical dependency on battery imports, with imports exceeding exports by 10.5 times.

Germany continues to lead the global market in the value of EV exports, whilst China now leads in terms of the number of EVs exported.

The UK’s position is further weakened by the resilience of the EU as a formidable EV market. The EU has made efforts to tackle the dependency on China for its battery imports by investing in production capacity in areas such as Poland, coupled with EU interventions such as the Green Deal which provides a simplified regulatory environment, faster access to funding and skills and supply chain development. 

Moreover, the UK relies on sourcing materials from the rest of the world outside of the EU, coupled with higher prices making compliance with regulations more challenging.

The report warns that the UK risks a continued critical dependency on battery imports while its EU competitors are reducing the risk. 

Strikingly the report shines a light on the level of Government intervention in the EU, US and China, all have coherent industrial strategy that capitalise on the shift to Net Zero, whilst the UK does not, favouring a reactive sticking plaster approach, such as the short term extension of Rules of Origin deadline with the EU. Whilst this provides respite to the UK the risk is that the gap with its competitors widens.  

Jun Du, Professor of Economics at Aston Business School, said: “Cultivating a resilient and competitive UK automotive industry demands policy ideas that align with the ever-evolving dynamics of the global electric vehicle market.

“Our research highlights the weakness of the UK’s current position and outlines the strategic interventions urgently needed to fortify the UK’s interests and navigate the transformative landscape of the electric vehicle revolution.

“The implementation of these recommendations can effectively cement the UK’s leadership position in the realm of electric mobility, ensuring enduring growth, competitiveness, and innovation.”

The report outlines a three-point plan for automotive sector resilience. This crucial roadmap sets out the steps the UK must take to fortify its presence in the global EV market. 

The recommendations strategically target global opportunities in the EV revolution, advocate for the optimisation of trade policy, call for strategic investments in EV battery production, emphasise the imperative of crafting a future-ready industrial strategy, and underscore the significance of continuous monitoring of global value chains.

For further information, contact Professor Jun Du.

find out more and download the full report here

This press release was originally published by Aston Business School.

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Resilience Resources Sustainability

Aligning economic policy for automotive sector resilience in the face of critical material dependency challenges

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Research overview

The automotive sector holds a distinctive and pivotal position within the UK economy. Beyond its substantial contributions to national outputs, employment, and value addition, the sector embodies a catalyst for future growth, aligning with the levelling up agenda and propelling the Net Zero transition.

In 2022, automotive-related manufacturing injected £78 billion turnover and contributed £16 billion in value added to the UK economy. The sector’s impact extends to the employment of over 208,000 individuals directly in automotive manufacturing and a total of 800,000 across the broader sector. Noteworthy within this context is the diversity epitomized by more than 25 manufacturing brands, collectively producing over 70 distinct vehicle models, complemented by the presence of specialized small-volume manufacturers.

This intricate ecosystem is further supported by approximately 2,500 supply chain businesses, housing some of the world’s most skilled engineers.

This paper offers a comprehensive analysis of the UK’s electric vehicle (EV) industry within the framework of economic policy and global value chains. It delves into the intricate dynamics involving supply chains, industrial policy, and critical dependencies.

The UK’s automotive sector confronts multifaceted challenges stemming from technological advancements, socioeconomic transformations, and geopolitical intricacies, necessitating the formulation of agile and responsive economic policies. The UK’s departure from the EU, as stipulated in the Trade and Cooperation Agreement, amplifies the complexities, particularly in navigating non-tariff measures and rules of origin that exert influence on EV exports. Within a landscape marked by heightened global competition characterized by escalating industrial policies on a global scale, the urgency of nimble responses becomes evident.

This research was conducted by Professor Jun Du Professor, Reader Luciano Battista and Dr. Oleksandr Shepotylo (Aston Business School). This work was supported by the UKRI Made Smarter Innovation Challenge and the Economic and Social Research Council via InterAct [Grant Reference ES/W007231/1].

For further discussions or potential applications/collaborations, please contact Jun Du.

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InterAct features in latest Midlands Engine ‘State of the Region’ report

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The Midlands Engine Observatory’s State of the Region 2023 report is now available to read, this edition features a spotlight on the practical partnership between Midlands Engine and the InterAct Network as part of the Future of Digital Manufacturing Ecosystems project.

Each year since 2019, the Observatory has gathered together a wealth of data to provide a snapshot of how the Midlands is faring and where the key opportunities lie.

The 2023 report details a challenging twelve months across the Midlands and the UK.

The report is split into two sections, based on the business plan published by the Midlands Engine earlier this year.

The first half explores how the region fared in terms of our key economic drivers: increasing productivity; innovating across sectors; building infrastructure for growth and increasing investment.

More in-depth stats are presented in a thematic deep-dive section covering the Midlands Engine’s five key themes: Green Growth; Advanced Manufacturing; Food & Agri-tech; Med-tech and Life sciences and New Market Opportunities.

InterAct is pleased to continue working with Midlands Engine as the Network moves into it’s final year of research. Following the sucessful development of the Future of Digital Manufacturing Ecosystems ‘Scenarios 2040’ report, InterAct will be hosting workshops focusing on the agri-food and medical technology sectors followed by in depth case studies of three midlands based manufacturing firms outlined in the report.

Discussing planned collaboration, InterAct Co-director, Professor Jan Godsell said: “At InterAct, we’re committed to working with businesses
to help shape and co-develop our research to achieve the greatest benefits for regional and UK wide manufacturing.

By focusing our case study on the Midlands, we have a unique opportunity to support the thriving industrial base here and enable them to establish future systems of digital manufacturing – creating more resilient and prosperous supply chains which will enhance the productivity of the region and provide a blueprint for wider applicability to the rest of the country.”

read the full midlands engine ‘state of the region’ report