Friday, 4 March 2016

UK Manufacturing Statistics. Part 2: What does it say about Servitization?

In the first of these two pieces we saw how employment in manufacturing has had a re-visit. That post and this draws on the new report Measuring Manufacturing: Manufacturing Metrics Review Report, just published by the Department for Business, Innovation and Skills.

The report also looks at how servitization is changing the shape of UK Manufacturing:

  • In 2011, 39% of UK manufacturers with more than 100 employees derived value from services related to their products, compared with 24% in 2007.  That is a leap of 60% from that initial baseline in 2007. If that year doesn't seem significant to you, remember that the first iPhone went on sale that year. How many apps and support services do you have on your smart phone right now?
  • The number of UK businesses recognized as Service Plus (i.e. with Manufacturing SIC codes and revenues from services >50%) has increased from 2008 to 2013 by either 85% or 212%, depending on the analysis approach. The wide difference in those two percentages are because it is early days in how to measure companies that accrue large revenues indirectly from their manufactured goods. The raw numbers suggest that there were approaching 20,000 such companies in 2013, nearly 3 years ago.
Before I finish consider how GE is re-positioning itself as a digital company, advertising on the TV and Youtube and to learn more about Servitization see the Advanced Services Group video here

So, I ask you is your business part of the servitization revolution? Join us at our Global Forum on 26th April to begin.

Thursday, 3 March 2016

UK Manufacturing Jobs double from 2.6M to 5.1M: Part 1 Is it True?

Now that is a real headline, and puts Brexit discussions into the shade, but is it true?
Measuring Manufacturing: Manufacturing Metrics Review Report, just published by the Department for Business, Innovation and Skills has re-visited how manufacturing is interpreted in the national statistics and the chair Professor Sir Mike Gregory states in his summary:

"In summary, the group found that, while manufacturing as currently defined in national and international statistics is being effectively and reliably reported, there are substantial opportunities to capture and reflect the influence of manufacturing activities within the economy more comprehensively.

and that a new Value chain approach "suggests that jobs associated with manufacturing might number 5.1 million compared with the 2.6 million directly classified to manufacturing using conventional interpretations."

The graphic below taken from that report, reproduced here courtesy of Open Government Licence v3.0, shows the detail:

The report goes on to state:  "it is worth noting that UK manufacturing has delivered a productivity revolution showing a 125% increase in labour productivity since 1985" 

Feeling a little better now? Part 2 of this blog looks at what the report has to say about Servitization.