skip to primary navigationskip to content

Manufacturing Policy Portal [beta]

Hosted by the Centre for Science, Technology & Innovation Policy (CSTI)

Studying at Cambridge


Key Policies

Key Policies and Policy Analyses

Future of Manufacturing (Government Office of Science)

The 2013 Foresight document, Future of Manufacturing, produced by the Government Office for Science identifies manufacturing as being “essential for long term economic growth and economic resilience. However, many of its characteristics are changing profoundly. Physical production processes are increasingly at the centre of much wider value chains.” In evaluating its contribution to the UK economy, it points out that manufacturing contributed £139 billion (in 2012) to UK Gross Domestic Product, that manufacturing businesses are more likely to engage in R&D, to innovate, and to export compared to non-manufacturers, that growth in total factor productivity was higher for manufacturing between 1980 and 2009 (2.3%) than it was for the UK as a whole (0.7%), and that manufacturing performance affects other sectors through its wide range of input-output and other inter-industry linkages. It also notes that “economies with strong, export-led manufacturing sectors typically recover from recessions faster than those without equivalent manufacturing sectors”.

The report identifies four key characteristics of manufacturing and implications for government:

  • Faster, more responsive and closer to customers
  • Exposed to new market opportunities
  • More sustainable
  • Increasingly dependent on high-skilled workers 

Furthermore, the report posits three systemic areas for future government focus:

  • Taking a more integrated view of value creation in the manufacturing sector
  • Targeting specific stages of the manufacturing supply chain
  • Enhancing government capability in evaluating and coordinating policy over the long term


BIS Economics Paper

In 2010 the Department for Business, Innovation & Skills (BIS) published an Economics Paper that analysed the manufacturing sector, the third largest in the UK economy, representing just over 11% of the economy and over 8% of total UK employment. Aside from established industries such as food and drink, aerospace, pharmaceuticals, electronics and automotive, it highlighted new industries based around new emerging technologies including low carbon, industrial biotechnology, nano-technology, digital and advanced materials.

In analysing the global economy, a key feature has been the globalisation of the supply chain, with increasing competition from emerging economies which are steadily moving up the value chain into higher value activities and industries. Manufacturers in developed countries have tended to outsource to emerging countries lower value activities in the value chain and differentiate by means of ‘servitisation’, a trend in which the sale of a product is combined with associated services. Global trends will lead to new product and geographical market opportunities, potentially leading to the emergence and expansion of new industries, particularly those based around new technologies, and a revival of others. The report also makes a case for government intervention when markets for labour, capital, knowledge, goods and services fail to function properly, whether that’s in relation to skills, innovation, investment, supply chain collaboration and institutions.


  • Also in 2010 BIS published its ‘Growth Review Framework for Advanced Manufacturing’. The document set out the Government’s ambitions for manufacturing, developed through consultation with industry, and also the actions the Government was taking to provide a conducive business environment. It also examined major future long-term growth opportunities and challenges. Manufacturing policy has been developed since then as part of the wider Industrial Strategy development.


  • A 2014 Industrial Strategy Progress Report by BIS discusses the need for a new approach to how government and industry work together. One in which government does not prescribe actions for industry, but also one which does not adopt a hands off approach. This new industrial strategy features five themes: skills, technologies, access to finance, procurement and sector partnerships. A year previously, 11 sector strategies were published, and engagement with other sectors has been undertaken since to identify upcoming challenges. Over the past year Government has allocated more than £2 billion to industrial strategy objectives, which has mostly been match-funded by industry. Among the prominent initiatives emanating from this strategy are the following:
    • Aerospace Technology Institute operational using £2 billion joint funding commitment by government and industry between 2013 and 2020.
    • Advanced Propulsion Centre established with up to £75 million available initially from Government for pilot projects to develop a new generation of low carbon power train technologies, kick-starting a £1 billion joint investment by Government and industry over 10 years.
    • £70 million Agri-Tech Catalyst launched to support industry-led ‘proof of concept’ development of near-market agricultural innovations.
    • Dedicated funding at £100 million per year to support projects to grow skills in key sectors and technologies, through co-funding with employers.
    • Seven catapult centres now open for business, with £1.5 billion of public and private funding over their first five years.
    • The British Business Bank launched in interim form. Its programmes made £660 million of finance available to Small and Medium sized enterprises (SMEs) in 2013 – a 73% year-on-year increase from 2012.