Targeted action to revitalise domestic supply chains could inject £30 billion into the UK economy by 2025, creating more than half a million jobs across the United Kingdom, according to a new CBI report.
The report, Pulling Together, recommends ways to kick-start the UK’s supply chains, and solutions to reinvigorate Britain’s industrial strategy.
Based on new research carried out by global management consultancy firm AT Kearney, the report reveals underinvestment in R&D, a growing skills crisis and weakened foundation industries that are key to advanced manufacturing - such as plastics, metals and chemicals.
To tackle the issues, the CBI is urging the Government and business to act together to strengthen supply chains, focusing on innovation, better quality products and excellent customer service.
Among the measures the CBI is calling for are setting a long-term target for public and private sector spending on R&D to rise to three per cent of GDP and widening the R&D tax credit to support the later stages of the commercialisation and manufacture of innovative British products.
Also doubling spending on the UK’s innovation agency, Innovate UK, over the course of the next parliament and financially incentivising science, technology, engineering and mathematics (STEM) degrees, and ensuring more graduates take up jobs in these sectors
The CBI is also calling for a national materials strategy, as part of the UK’s industrial strategy, to protect and enhance critical supply chain sub-sectors.
Katja Hall, CBI deputy director-general, said: “The molten metals of manufacturing have long coursed through the veins of our economy. Optimism within industry is now rising at a strong rate, and investment intentions are on the up.
“But it’s time for some fresh thinking. We need to see a bold strategy that breathes new life into our supply chains, and makes the UK the destination of choice for manufacturing high value products. This could provide a £30 billion boost to the economy, and create half a million extra jobs.
“The scale of the challenge is sizeable - our competitors are powering ahead, with France outstripping our R&D investment by 40 per cent. At the same time, only three per cent of our graduates end up in engineering or technology jobs.
“We need policies which focus on creating long-term value - from increasing R&D spending to establishing a UK-wide materials strategy - to enable industry to play to its strengths and compete effectively on the world stage.
“This renaissance in British manufacturing will make it a byword for innovation and quality.”