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Innovation vs. Productivity

National productivity figures for Q4 2015 surfaced in April and it’s not pretty reading. The figures released by the Office of National Statistics (ONS) stated:
“UK labour productivity as measured by output per hour fell by 1.2% from the third to the fourth calendar quarter of 2015 and was some 14% below an extrapolation based on its pre-downturn trend”. 
This combined with the uncertainty of UK’s entry/exit into the EU where three million jobs could be at stake, and the ever changing environment of the British Steel industry, has offered some uncertainty back into the UK economy. The UK is on the precipice and UK manufacturing should reinvigorate growth, and halt any negativity that surrounds this tricky time.


Over the years there has been a clear link to productivity figures and economic growth and the ONS says: “Labour costs make up around two-thirds of the overall cost of production of UK economic output. Unit labour costs are therefore a closely watched indicator of inflationary pressures in the economy”.
We have all heard the same conversations over and over around the manufacturing skill set shortage, especially in the more technical fields. Michael Page Engineering and Manufacturing can clearly see these new figures pressuring this matter further, and it’s becoming increasingly difficult to access this talent in the manufacturing sector.
There are numerous important questions triggered from this. How can we get better productivity into manufacturing? How do we get ahead of the competition? Who is coming out on top?


The businesses that seem to be going from strength to strength are also the leading market sectors, especially automotive and aerospace. These sectors are investing in three environments: innovation, innovation, and innovation, and the emphasis is not only on the product base, but also the people and the processes on site.
The demand to innovate, re-invent and re-energise products/processes/people is imperative for UK manufacturing’s success and the more specialised high-end, added value processes we concentrate on could develop into a UK manufacturing hotspot. If we can concentrate on improving our innovation then this will lead to better products, sales growth, higher market share and ultimately better productivity figures leading to an economic uplift.
The Michael Page Engineering and Manufacturing business is adapting to prepare for the changes we perceive may happen through this drive to innovate, gearing its networks and preparing clear market information to deliver to its client base an integrated solution to access the right talent pool. The business can see a need for an array of design, NPI, NPD and lean process specialists, due to the increasing high demand to bring new ideas across its products, processes and people, and its need to be ready to deliver at short notice.


Creativity leading to new ways in manufacturing products isn’t a new concept and innovation is usually incorporated into most business strategies. However with a variety of new techniques readily available, and emphasis on further technical development in joint ventures with universities in advanced manufacturing centres dotted around the country, it is the ever pressing agenda that cannot be ignored. If UK manufacturing can balance driving innovation with increasing productivity, it can further establish itself in all industry sectors and make UK manufacturing a dominant force again. 
Joe Walton
T: +44 121 2309382