Digital tech ‘could boost east’s manufacturing by billions’

Kettle Chips being made in Bowthorpe, Norwich

East of England's 'powerhouse' manufacturing sector could be further boosted by digital investment, says a Siemens report - Credit: Archant

Digitalisation could add £2.6bn to East of England manufacturers’ revenues, according to a study.

A report by Siemens Financial Services (SFS) says the east’s manufacturing industry is viewed as a powerhouse sector for the regional economy and could net the equivalent of around 6% of its total revenue from digital transformation.

“The manufacturing sector in the East of England boasts the fourth largest regional output in the UK, producing 8.2% of the UK’s total output,” said the study, entitled Digitalisation Productivity Bonus: Manufacturing in the East of England.

Key manufacturing sub-sectors in the east are food and beverage and plastics, it says.

“Exports from the food and drink industry in East England generated £1.7bn in the year to March 2019. In the last couple of years a number of local food and drink manufacturers in the area have expanded their exports across Europe and as far as China.”

It added that a tenth of the sector’s businesses are located in the East of England as it explores specialist financing methods, including retrofit finance and software finance.

The efficiencies from digitalisation — which can cover the supply chain — improve performance through increased manufacturing productivity, improved planning and forecasting, enhanced competitive capabilities and greater financial sustainability, it said. 

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“As the UK faces a period of sustained significant economic crisis, this greater productivity and agility will help manufacturers in the region cope with the market disruptions,” it said.

In the East of England the manufacturing sector boasts the fourth largest regional output in the UK, producing 8.2% of the UK’s total output, the report found.

Increasing productivity - to either produce the same number of products for less or more products for the same - has “a clear and calculable positive effect” on costs and margins, referred to as the Digitalisation Productivity Bonus, it said.

Neli Ivanova, industrial equipment sales manager at Siemens Financial Services in the UK, said manufacturing was a powerhouse sector in the region which created opportunities for both domestic and international markets.

“For the region to continue competing at this level investment in Industry 4.0 (digital technology) is essential,” she said. “Understanding increased productivity as a measurable value from digitalisation can help manufacturers to make the business case for sustainable investment in equipment and technology upgrade.”