Orange Business: Why UK Manufacturing Needs to go Smart

The UK economy has been grappling with sluggish growth, declining productivity and a widening digital skills gap.

Despite being an early adopter of automation in some areas, UK manufacturing still struggles with outdated infrastructure and inconsistent investment. 

Economic pressures continue to mount while a skills crisis is costing the UK billions. The manufacturing sector alone shoulders an annual economic burden of £1.4 billion due to work-related ill health and injury, with 2.3 million working days lost each year.

Stress, depression and musculoskeletal disorders are on the rise, accounting for 94,000 cases of work-related ill health in 2023. These figures highlight the need for not only technological advancement but also a renewed focus on employee wellbeing within the manufacturing industry.

Within this context, the UK manufacturing sector must fully embrace automation and smart industry technologies to remain competitive and fuel economic prosperity.

While some see the UK as lagging, the truth is that more nuanced pockets of excellence exist in automotive aerospace and healthcare manufacturing. 

However, it's now time for the rest of the sector to follow suit. 

Manufacturing overcoming legacy challenges

To combat declining productivity and labour shortages, the UK manufacturing sector must focus on three key priorities:

• Accelerating automation: investment in AI, IoT and robotics can streamline operations, reduce reliance on manual labour and improve efficiency.
• Building stronger collaboration: industry players, technology firms and academia must collaborate on manufacturing research and innovation.
• Bridging the skills gap: training and upskilling programmes should ensure workers are equipped for the evolving demands of digital manufacturing.

Playing catch-up or leading the way?

Much of the manufacturing sector still relies on outdated processes and short-term decision making, which hinders long-term transformation regardless of industry.

Government initiatives, including tax incentives for digital adoption, aim to encourage automation investment.

But a major barrier to widespread automation adoption is the growing digital skills gap. UK businesses are struggling to find talent with expertise in AI, cybersecurity and data analytics. 

This challenge is not unique to manufacturing or to the UK, as industries across the board are facing similar workforce shortages.

Manufacturers can address this through apprenticeship and upskilling programmes, including the UK’s Apprenticeship Levy. There’s a misperception that this is only for young people leaving school, but it’s also a fantastic way to invest in reskilling existing employees, ensuring they can transition from legacy roles to positions that support AI-driven innovation.

This year at Orange Business, 50 current UK employees have started an apprenticeship training in AI and data, and will gain Level 3 AI certifications over a 13-month programme. The average age of the participants is over 40 years old, proving that it’s never too late to learn.

Programmes like these not only fill immediate skills gaps but also contribute to long-term industry resilience. With structured training and practical application, the future workforce will be better prepared for a technology-driven manufacturing landscape.

Opportunities and risks of automation

AI and predictive analytics are already proving their worth, boosting productivity by streamlining operations, cutting costs and reducing downtime. Far from the common fear that automation leads to widespread job losses, it is actually creating high-skilled manufacturing roles that require specific human expertise. 

With the right training and investment, workers can transition into new careers that are more engaging and better paid.

At the same time, sustainability is becoming a core focus, with smart industry solutions improving resource management, cutting waste and reducing the environmental impact of production.

Workplace safety and employee wellbeing will also improve through greater technology adoption and transformation.

For example, AI-driven monitoring systems can prevent accidents, enhance compliance and help tackle some of the biggest health issues facing manufacturing workers.

But while the benefits of automation are undeniable, the risks cannot be ignored, especially when it comes to cybersecurity.

The industrial sector is now the target of 57% of global cyberattacks, with financial losses reaching as much as £1.6 million per hour. As IT and OT systems become more interconnected, businesses must ensure that security is not an afterthought but a fundamental pillar of their automation strategy. Without robust cybersecurity measures in place, the benefits of digital transformation could quickly unravel.

The road ahead 

Manufacturing, once the backbone of Britain’s industrial strength, must not become a relic of the past. AI, IoT, and robotics are the tools that will decide which manufacturers thrive and which fade into irrelevance. 

While fears of job losses persist, history has shown that automation creates new, higher-skilled roles when businesses invest in their people. The UK’s widening skills gap is already costing billions, so we need a national effort to reskill, upskill, and prepare the workforce for the digital era, largely driven by the private sector.

The UK has the technology and the expertise to lead a new industrial revolution, but only if businesses commit to action now.

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