It also bursts the bubble of some popular misconceptions. The loss of manufacturing jobs is a global phenomenon and it has been particularly severe in the UK where the last 30 years have seen the loss of some 4 million manufacturing jobs. But this has been matched by massive gains in productivity to the extent that in 2006 the UK was still the sixth largest manufacturer in the world and the real value of manufacturing output continues to grow.

It’s a case therefore of relative, rather than absolute, decline and growth has been maintained in the face of incessant and fierce price competition from emerging economies. The survival of UK manufacturing is a success story and the sector has a depth of experience from which others could learn.

However, the image and definition of manufacturing desperately needs updating: many ‘manufacturers’ today are integrated solutions providers providing complex bundles of specialised goods and services. Key opportunities in the future exist in the development and exploitation of new technologies, intellectual property and complex product / service combinations that cannot be easily replicated or commoditised.

For this to happen there’s an urgent need for closer collaboration between government, academia and business. Government needs to develop a tax regime, including incentives such as tax credits, that encourages investment in R&D, capital expenditure and energy efficiency.

Overtime, labour cost differentials will diminish and sources of competitive advantage will shift towards unique knowledge and skills. Much closer collaboration is therefore needed between industry and UK universities to more fully exploit their research capacity and intellectual property.

Some of the other key points form the report include:

• Low value of sterling offers a temporary cushion against the worst effects of the recession but cannot provide a source of long-term competitive advantage and the report authors note that despite the relative weakness of the pound, the balance of trade with the Euro zone has worsened.
• UK manufacturing faces a serious deficit in technical skills and continued los of skills, rather than competition, could eventually make UK manufacturing unsustainable: jobs and skilled employees lost in a recession do not tend to come back as the economy recovers.
• Training needs to improve. foreign industrial investors are often dismayed at the levels of training needed by UK employees
• at the same time there is a desperate need to improve the image of manufacturing is vital: young people will not train for careers in manufacturing and engineering if they think there’s no future in them.
• There’s a desperate need for investment in both R&D – spend as a percentage of GDP is lower in the UK (1.8%) than in other countries such as Germany (2.5%), Japan (3.3%), the US (2.6%) and Sweden (3.8%).
• And there’s a need for much greater support for entrepreneurship: only 4% of investment goes into venture capital in the UK compared to 33% in the US.

Two outstanding and thought-provoking speakers enabled representatives of regional companies to learn how innovation can be used to gain a competitive edge.

Barry Dodd, CEO of GSM Group and Council Member Yorkshire Innovation, used real life examples, rather than text book theory, to demonstrate the role of innovation in growing a business. He emphasised the importance of the value chain and the supply chain as sources of opportunity for innovation and growth.

David Bott from the Technology Strategy Board, looked at the future of manufacturing and how the use of competitive funding is driving research and development to help solve some of the most pressing problems facing society.

Business Link Yorkshire also presented an update on support available for manufacturing companies.