Investment in technology key to growth, Scottish manufacturers tell KPMG

Manufacturers with operations in Scotland are planning to spend more developing new products and services to drive growth, according to a report by global accountancy firm KPMG.

KPMG’s Rethink Manufacturing report found the majority (84 per cent) of manufacturers operating in the region believe that innovation remains the bedrock of UK production, prompting half of those surveyed to increase research and development (R&D) activities over the next three years.

Nearly one third (31 per cent) of manufacturers surveyed cited investment in new technology as one of the top three factors that would help boost their productivity in Scotland.

Manufacturers recognise the step change new technologies can deliver.

More than half (59 per cent) said “Industry 4.0” – the creation of smart factories using the latest digital technology – presents an unprecedented opportunity to boost manufacturing. Many of the respondents (37 per cent) conceded Industry 4.0 will have a major impact on their business model.

In response, firms with operations in Scotland are increasing their investment in technology. Nearly half (47 per cent) said they are already investing in the Internet of Things – the ability to connect everyday devices via the internet. More than a third (36 per cent) said they were planning to boost their investment in this area before 2020.

Artificial Intelligence and advanced robotics are also high on the agenda. In the next three years, a significant proportion of manufacturers operating in Scotland plan to boost investment in both fields – two fifths (41 per cent) identified artificial intelligence and nearly half (47 per cent) noted advanced robotics as areas of priority.

James Kergon, partner and head of industrial manufacturing for KPMG in Scotland, said: “Manufacturing businesses with operations in Scotland recognise the importance of innovation. The industry’s forward thinking approach has made it a hotspot for investment, from companies based in the UK, and overseas.

“The UK Government has already launched a host of initiatives that recognise and support the value of innovation, such as its £2bn R&D fund for emerging technology, which includes artificial intelligence and robotics, and changes to make claiming R&D tax credits easier. That commitment can make a real difference to the fortunes of manufacturer. The onus is now on business leaders to have the determination, vision and proactivity to seize those opportunities.”