On 27th March 2025, McLaughlin & Harvey hosted an insightful roundtable event at our Birmingham office, bringing together key industry leaders and experts to discuss the future of advanced manufacturing.
Aligning with the UK Government’s Industrial Strategy, the conversation centred around advanced manufacturing, one of the eight growth-driving sectors identified in the strategy that offers the highest growth opportunity for the economy and business.
A core objective of the strategy is to unlock the full potential of cities and regions across the UK, and we are proud that our Birmingham office is contributing to this pivotal conversation.
In the next few weeks the UK is set to get a new national industrial strategy, its first in years. Our panel of experts shared their thoughts on what the strategy should contain.
Paul Griffen, Managing Director, McLaughlin & Harvey
One of the things that many large businesses could do better is communicate with their supply chains to let them know what the pipeline looks like. Better visibility of plans and projects would be beneficial so that we not only know what will be happening in four, five, or six years but can start investing in the necessary infrastructure. It would make a massive difference, especially to SMEs within our supply chain.
An industrial strategy needs to provide a clear, visible pipeline of development; it needs more mature procurement routes that involve more collaboration; and it needs competence within the government to run it effectively.
From a construction perspective, we have enjoyed success in the industrial space. It’s ironic – we’re talking about challenges, but we’ve seen quite a bit of activity in that market over the last few years. However, as mentioned, I don’t see enough of a pipeline of opportunity over the next three to four years. We are flexible enough as a business to adapt and move into different sectors, but I don’t have a plan that says, ‘I’m going to be working in the industrial and advanced manufacturing sector for X number of years’.
Stacey Godbehear, Service Executive, Rolls-Royce
The most important clarification is on what the key growth sectors and subsectors are, securing sustainable growth, and nurturing sovereign capability, particularly in our aerospace and nuclear divisions. We have a huge stake in two particular industries: aerospace and nuclear. We also have to ensure that an industrial strategy doesn’t expand to try and be everything to everyone. We have limited resources in public funds: money, people, and materials. We also have to ensure that whatever plan the country comes up with, we stick to it for the long term. Previous attempts at industrial strategy have seen boundaries expand and stretch so much that they become almost impossible to implement. Let’s help the government write it in a manner that is important to us, and then let’s stick to it for more than a decade.
One of our biggest opportunities as a business is in small modular nuclear reactors. We need the government to determine their deployment: access to clean energy is essential for supporting and developing the supply chain and SMEs. It is a fantastic opportunity for the UK as a whole, for its supply chains, materials, research, technology, and design skills. There are so many ways we could pull these threads together and have an industrial strategy that supports our collective aspirations.
What we aren’t good at, and what we do need the government to help us with, is exploiting R&D and industrialising it in the UK. Without that help, global organisations will look to other nations where they can secure funding, such as Germany and the US, because they have no choice. We would love to be in a position where the industrial strategy helps us to industrialise in the UK, wherever possible, with a robust supply chain that has the weight to make us all succeed collectively. The government has got to help us bridge, commercialise and industrialise locally.
Craig Wright, Chairman, Wright Industries
Economic policy will inevitably be driven by the needs of our larger industries, and it’s right that the government starts there with companies that employ thousands and drive supply chains. However, there are other elements that must be considered, the biggest of which is the security and independence of supply chains. Although large manufacturers have been happy to receive goods from elsewhere in the world, we are now seeing them become increasingly dependent on the UK.
Central to any industrial strategy has to be identifying exactly where economic support applies. Not just through direct financing, but by encouraging institutions like banks to support key elements. For example, if a business is a key supplier to Rolls-Royce, banks should be encouraged to offer better loan rates. Identifying key players is important, but so is the financial support they need. Manufacturing equipment is expensive, and although it is easier to finance than most things because it is a movable asset, manufacturers still need to fund the deposit, then get the kit working and fully efficient on day one. Otherwise, they are making losses for months. Some of the tax allowances the government has given on capital expenditure have helped some of these businesses invest, perhaps when they would not have otherwise been able to.One of the most important issues an industrial strategy will have to do is encourage diversification: an SME cannot bet on any one sector. If I had focused on supplying just one sector, I would have gone bust four times over in the last 25 years. I have seen that happen to some of my competitors, who just focused on, say, aerospace, nuclear, or medical. The secret to surviving in the supply chain is going for niches while supporting multiple sectors. So if you are going to do pipe bending for Rolls-Royce, you can do it for the medical sector as well.
Richard Freeman, Managing Director, Zeeko
A strategy must look at getting rid of red tape, instead of being tied up in it. Remember the bonfire of red tape that we were going to have because of Brexit? We now have to have an extra level of approval in order to be able to ship to Europe.
The engineering infrastructure in Britain is just dreadful. There are good companies, but the overall support infrastructure is a joke compared with Germany, for example. Going to a broader point, an industrial strategy cannot be just about changing the attitudes of the government or manufacturers; it needs to change the attitude of everybody in the country, including the public. I remain a bit cynical because I remember when, straight after the pandemic, the country was going to put manufacturing first. However, is there anything to support it? Can we get money from banks? No, we can’t. I think the financial situation will get worse. I was talking to a bank, and they said: “Watch out, Richard, there’s going to be no money around in the next two years.”
I would like to see consistency. We change our minds far, far too often. Consistency is so important for everybody, so that we can train the people we need and have security in our investments. In formulating an industrial strategy, it can’t be just about job creation, which is what the government usually focuses on: the strategy has to help people make money out of running manufacturing businesses.
Rachel Eade MBE, Chair, UK Metals Council
I would like an industrial strategy that clearly demonstrates engagement right across the supply chain, which pulls in all the expertise that we do have out there in its development. That;s the way to get businesses to feel involved in and get them to want to support its implementation.
Let’s understand that an industrial strategy can’t be just about the big manufacturers, because if we want to maintain those big names, we need to support and recognise the SMEs that sustain them. For example, it has been decided that we will spend more of our GDP on defence. Fine, however, there is a lack of understanding of the defence sector’s needs and the practical support that should be offered. I’ve just had calls from three companies that want to supply the defence sector, but their banks won’t support them, and we can’t get hold of ballistic steel needed for defence work or the necessary skills. Typically, the government puts out a policy statement on a critical industry but has no idea what businesses need to take advantage of the opportunities. The same could be replicated in other sectors such as space and the environment.
The very name “industrial strategy” alienates those in skills, insurance, finance, and development because they don’t think it’s relevant to them when, in fact, they are each essential components. An industrial strategy needs to be presented as a collective effort—you can’t build a factory unless you have the right people, the right land in the right condition, the right finance, infrastructure, energy, and transport. All this cannot be delivered in two years. It’s a 10–20-year plan that requires cross-sector involvement, including all those contributors in the wider supply chain.
Dan Carins, Policy Manager, West Midlands Combined Authority
The West Midlands’ industrial strategy should be coming out around June, after the national one is announced. It will be driven by those national priorities, but with local variations based on our key sectors. It’s right that an industrial strategy should start with clarity of purpose, which is achieved by speaking to businesses. However, it takes an awfully long time for people like me to speak to sector specialists, to speak to businesses, to truly understand the myriad problems affecting them – like finance and supply chains – n granular detail, and then to start developing a clear, effective strategy. And although this work is important, it does not win votes or engage the public. However, it is necessary if we are to gather the necessary support and align efforts towards these agendas. The trick for the government is to ensure that enough people are working on the same projects over time. That will unearth vote-winning initiatives, investment potential, new buildings, and new jobs.
Companies often assume the government just wants jobs, and that’s what they offer when looking for support. In addition, short-term funding means they can’t demonstrate an increase in turnover or productivity in their applications.
An industrial strategy should not be primarily about job creation because manufacturing isn’t where the jobs are. It is where GVA growth is, and that growth then creates wealth for everybody else. Industrial growth is driven through improvements like automation and robotics. In our negotiations with the government about the industrial strategy, we’re pushing back on the results they’re expecting from us: we’ve said, ‘don’t measure us on job creation but benchmark us on productivity and increases in GVA.’ The government does understand this: the challenge for them is how they tie it off politically.
Dr Paul Milne, Deputy Director of SME Programmes, WMG/University of Warwick
I would like an industrial strategy that gives some vision and puts it at the heart of how we’re going to build our way out of our current situation. A fear is that people will see an industry strategy as something that will fix everything. It’s not a panacea: there will be so many gaps in it; businesses still need to do most of the work themselves.
SMEs need the clarity of an industrial strategy because currently, they are being hit from all sides, left punch-drunk. My fear is that several companies are looking for a panacea to their issues, and this will not be it. It will not solve all their problems. The guiding principle of an industrial strategy should be simple: how can the government make manufacturers’ lives easier over the long term? How will it facilitate the journey from where they are now to where they want to be? How will it reduce red tape? How will it improve trade relations? How will it enhance skills and leadership?
There’s a lot of talk about skills shortages in manufacturing, but one overlooked area is building the next generation of business leaders. Because without leadership and strong direction, businesses are not going to change quickly enough. Let’s be honest: most SMEs are not productive enough, not competitive enough, which is why they struggle. They need to improve their productivity and competitiveness but may soon lack the people to deliver it.
Claire Robertson, Divisional Director, Drees & Sommer
The industrial strategy can’t be just the preserve of a few big players and the government. It needs to be in the hands of the many to really take off. And rather than just supporting existing players, the strategy must be more receptive to new entrants, letting competition breed innovation.
I’d like to see tax relief and incentives for the industry commensurate with the time it takes to build industry: not not five year tax relief, but something far longer that reflects the time scales investors think in. On the principle of making life easier, one issue an industrial strategy must address is creating consistency, simplicity, and standardisation of processes and certification. For example, an offshore renewables project still needs bespoke insurance to be underwritten. There is no standard policy wording in insurance, which can really hold a project back.
One of the challenges an industrial strategy must tackle is finding long-term solutions and making them more accessible. For example, the investment zones dotted across the country provide tax relief for five years, but that’s not nearly long enough. In reality, developers can spend two and a half years remediating a site to make it attractive for investment. If they can’t get insurance, a developer is not going to invest in an investment zone. The government can talk about freeports and investment zones all they like, but unless they provide long-term incentives, they won’t encourage real investment.
John Carlin, Regional Director, McLaughlin & Harvey
At the core of any industrial strategy has to be creating a level playing field with the rest of the world by providing cheap and abundant energy. Our current 2030 net zero objectives are misaligned with our global partners – China’s target is 2050, and India’s is 2070. They can effectively ignore net zero for now and continue building coal power stations. Nor do we have their competitive advantage of cheap, abundant energy.
One of our biggest issues is making sure we have got the energy to power the industry that we need and to change the strategy around energy. We have got to change our thinking about the future, and start to use an energy mix in our supply. Those small nuclear reactors can power a town or an industrial village. This is tried and tested technology.
Christian Smith, Director – industrial & logistics, Savills
A strategy must include a reform of the planning system, which is slow even when it simply involves remediation. It is slow, there are not enough qualified people on the local council side, and it is getting increasingly expensive. The other big issue is energy supply, bringing forward power that businesses need to a site.
For a long time, industrial development has had a poor relationship with housing and offices; it hasn’t had the attention it needs, despite being such an important part of the economy. Governments since the 80s have barely given it much thought. Although industrial development is getting more recognition now, it’s still not a top priority, and the government just hasn’t got the cash to do what’s needed. The best thing the government could do for industrial development is invest in infrastructure, enabling industry to grow.
The planning system needs deregulation and simplification. If we don’t do that there’ll be less industrial space coming forward, which will in turn push rents up, stopping SMEs taking space and expanding.
Ben Green, Associate Director, Development, National Markets, SEGRO
Any industrial strategy will need to take a long, hard look at property. Here we have a problem, because planning takes a long time, even on land with relaxed regulations like the Freeport. All those tax incentives there, and at enterprise zones, are great, but they do not accelerate planning in any way. The industrial strategy must accelerate our ability to get planning approval, because we know that when we build in the right place, there will be an occupier for that space.
An industrial strategy has to acknowledge the importance of the industrial logistics sector, and helps unblock barriers to delivery of development projects, from planning processes to access to energy sources.
The money for industrial development is there: we have a lot of private sector money chasing what we do. Where we do need help is in accelerating the planning process. If we are to create the buildings that industry needs, we also need more covenant strength from the customers that lease our spaces – more security that they can fulfil their plans. That means they, in turn, need greater security in funding, which is where something seems to be missing.
Steve Smith, Director, Arcadis
An industrial strategy must look at the assets the supply chain needs to support the tier ones. There is an issue where developers who are doing speculative builds do so with a certain amount of power available, without really knowing what the end occupier will need. I think there is a strong case for nuclear and hydrogen, which could both be used to power a lot of these units. However, developers do not know a lot about hydrogen, so that is where communication and collaboration become increasingly important, where developers start talking to suppliers and universities about what is possible for their development.
The government needs to be accountable for an industrial strategy, but allow the industry to support its delivery. That means greater collaboration between the two. When the UK collaborates, we’re really powerful. My concern is that the government might not necessarily allow for that collaboration.
The industrial strategy needs to be around economic growth, not immediate job creation. Get the growth, and the jobs will follow in the supply chain. However, currently, if an overseas company comes over and says, ‘I want to build a facility,’ they can’t get government money because they’re not employing enough people. However, that support is needed: we’ve done cost plans for Chinese manufacturers planning to come to the UK, and it’s 20% more expensive to build here because of the cost of employment, cost of utilities, and because we do not automate as much as they do.
Ian White, Business Development Director, McLaughlin & Harvey
I want to see clarity within a strategy, which lays out which sectors we are going to push, and clarity about where government funds will be spent, and how it will support not just the tier ones but the supply chains. We also need government to be better at singing the praises of British manufacturing across the world
An industrial strategy will be a major change because, frankly, we have not had one in this country for many years. Plenty of plans for housing and health, but not one for manufacturing, even though it’s that which creates the wealth and jobs, and from that, houses and health. This will involve spinning the government’s attitude on its head and making manufacturing a priority.
How does this strategy get tiered down to departments below, who are then challenged on how they are going to deliver their part? The government will set that overall framework strategy on the sectors we back – say, defence, aerospace, or car manufacturing. The success will depend on how we tier that strategy down to the grassroots so every SME, every tier one, knows what they have to do. But more than that, they can also feed back up the line, saying, ‘if this is what you want’ this is what we need to deliver’.