New report calls on more Government funding to help SME manufacturers make the digital skills transformation

Nearly 85% of small to medium-sized manufacturers (SMEs) are crying out for more Government funding to help them bridge the digitals skills divide it was revealed today.

A new report produced by Oxford Innovation Advice has revealed that four fifths of companies are looking to ‘digitally upskill’ their staff but are finding the biggest barriers to achieving this are cost and a lack of in-house knowledge.

Over two thirds (68%) of the 239 businesses questioned are planning to invest in digital technologies, meaning there is a massive opportunity for the new Labour administration to deliver more specialised support to help boost skills and unlock the potential of UK industry.

Based on responses from the survey, Oxford Innovation Advice has developed a five-point policy action plan that it plans to submit to Government to build on successful programmes, such as Made Smarter Digital Adoption.

The recommendations focus on providing basic level training and advice to manufacturing SMEs to convert critical analogue data capture processes into digital ones. This is a critical first step for companies and gives them the ability to analyse processes and identify efficiency improvements.

Training should also be tailored to include a strong problem-solving focus, which could feature mentoring and one-on-one practical support to help manufacturers trial solutions and digitalise processes.

Finally, Oxford Innovation Advice is urging Government to involve companies in the design of businesses support, whilst also ensuring that programmes are available nationally and connect SMEs to their peers to sustain their digital journey.

“Nearly half (49%) of the manufacturers we surveyed are predicting growth in the next six months and this is great news. However, as the report clearly shows, how many more could be increasing sales and creating jobs if they had more help to improve their digital skills?” explained Jane Galsworthy, Managing Director of Oxford Innovation Advice.

“The digital revolution is no longer the preserve of the larger companies, it’s here and needs to be embedded on the shopfloors, in the design hubs and in the offices of our smaller manufacturers.”

She continued: “What is clear is that SMEs need more Government funding to help make this happen, with two thirds admitting they would accelerate their journey if the right specialist support was in place.

“80% also said they want to upskill their staff, so the appetite is there – we just need to create the right business support environment to make it happen using a combination of more financial grants and practical assistance that ensures firms can embrace digital technologies.”

Oxford Innovation Advice surveyed 229 manufacturing SMEs during August for its Skills and Digital Adoption report, one of the largest compiled this year for manufacturers.

Other findings included:

• 46% of companies are looking to hire new employees with the necessary skills for growth
• SME leaders feel that the Industrial Internet of Things is the most important digital tool for their business, followed by big data/analytics and Enterprise Resource Planning systems
• 83% of firms want to embrace digital transformation to improve operational efficiency, with over half wanting to utilise it to reduce costs
• Nearly three quarters (72%) of manufacturers believe cost is the biggest barrier holding back their digital journey
• The top three training approaches preferred by small to medium-sized enterprises are peer-to-peer learning, workshops/seminars and mentoring.

Jane concluded: “Made Smarter Digital Adoption is a fantastic programme for helping SMEs who have already made headway in developing their digital capabilities. However, we feel that there is still a significant number of companies who need support to develop lower-level processes before they can start to apply Industry 4.0 technologies.”

She concluded: “We’ll be taking this report to Whitehall to ensure SME manufacturers can get access to the digitalisation support they require to drive up productivity and growth.

Oxford Innovation Advice is the UKs leading provider of SME business support programmes and has been delivering coaching and advisory services for over 35 years.

It assists the leaders of over 500 manufacturing companies every year and has a detailed understanding of the challenges they face.

Voice of a manufacturer

Sheffield-based Oakworth Timber Engineering is one of the SMEs who echo the sentiments of the Digital Adoption report.

The company, which designs, manufactures and erects timber frame structures for the residential marketplace, has invested in a cloud-based server and ‘Clearview’ open-source software to create a data-rich ERP system that ensures the smooth transfer of information between designers, production and staff on site.

Managing Director John Capper has received fantastic support from the Made Smarter Digital Adoption programme but is still urging the Government to provide even more financial support for smaller companies looking to embrace digital manufacturing.

“Some of the initial measures we’ve taken have really benefited the business, from optimising processes and boosting efficiency to reducing lead times on projects.

“We’d love to do more, we really would and already have one eye on specialised production software and embedding our Site Audit Pro app into our EPS system. Cost is definitely a barrier, and our decision could be accelerated if there were easier-to-access grants.”

He continued: “There’s another big piece of work to do around digital skills as we’ll need to upskill pretty much all our 47-strong workforce to make sure we maximise any investment.

“Manufacturers thrive on practical training so any new programmes should really look to embed on-the-job learning into their digital skills approach.”