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27 June, 2016 - 12:23 By Kate Sweeney

UK lagging in fourth industrial revolution

New research has highlighted a poor understanding among UK manufacturers of Industry 4.0 processes – the digitisation of manufacturing – and it will hold back progress in the sector, the authors warn.

The Industry 4.0 movement has allowed German manufacturing to build on its competitive edge. It is often referred to as the fourth industrial revolution.

Despite the importance of the concept, only eight per cent of UK manufacturers have a significant understanding of the processes involved despite 59 per cent recognising that a fourth industrial revolution would have a big impact on the sector.

The intel comes in a new report by accountancy and business advisory firm BDO in association with the Institution of Mechanical Engineers (IMechE). 

As the increasing use of automation, data exchange, technology and wider supply chain communications driven by Industry 4.0 provides both huge opportunities and threats to UK manufacturing, there remains a ‘gaping hole’ in the education and understanding of Industry 4.0.

According to the BDO/IMechE report, increased productivity, better data analysis, increased competitiveness and lower manufacturing costs are the top ways in which Industry 4.0 will affect UK manufacturing. However, a third of manufacturers are at risk of falling behind global competition having not invested in Industry 4.0 related technology or processes in the last two years. 

Worryingly, a quarter say they have no plans to invest in this area in the next two years and 44 per cent of those not investing said this was due to a lack of understanding.

Of those that are increasing investment levels, 16 per cent expected to spend over £500,000 before 2018, while seven per cent plan to invest more than £5m.

From a security perspective, 73 per cent of those surveyed said Industry 4.0 will increase the risk of cyber security breaches in their business and 48 per cent of these felt they had an adequate IT infrastructure which could prevent breaches.

Keith Ferguson (pictured), head of manufacturing for East Anglia at BDO, said: “It is surprising to see such low awareness of Industry 4.0 amongst UK manufacturers and clearly more needs to be done to educate, support and assist the sector as we make strides into what is likely to become the fourth industrial revolution.

“UK manufacturers need to push ahead or they will be left behind, especially when it is evident other countries are already moving ahead of the game with education and investment programmes being much more clearly supported by government than in the UK.

“The lack of a clear strategy on what could be the most important development in manufacturing for some years is of huge concern. We would like to see the Government doing more to match manufacturers’ long-term outlook by developing a 15-20 years industrial policy that avoids the disruptions of the political cycle.”

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