Introduction
   The UK Commission is working to transform the UK’s approach to investing in skills to 
   help secure jobs and growth.  Key to our ambition is the need to encourage greater employer 
   ownership of skills, working to secure long term sustainable partnerships.
   This slide pack and accompanying evidence report present the case for more employers  in 
   this sector to invest in the skills of their people.  It does so by presenting real-life, skill-based 
   business solutions that have been used by leading employers to tackle the performance 
   challenges they face and by drawing on examples of the investments being made by the UK 
   Commission through its investment funds.
   There are several determinants of employers’ skills needs and training behaviour including firm 
   size, strategy and location but it is by sector which the strongest variations appear.  Hence this 
   work focuses on the Manufacturing sector.  Slide packs and reports are also available for a 
   number of other sectors from: www.ukces.org.uk Each of the sectors are important to the 
   economy in terms of employment, productivity or their future potential.
   For information about this slide pack and accompanying report please contact:
   Zoey Breuer, zoey.breuer@ukces.org.uk 
   Source information can be found in the notes section of each slide
    The storyboard
                                                                          Performance challenge:
                                            What is the current              PRODUCTIVITY
                What key skills            position of the sector?
             challenges are being                                              Supported by 
                    faced?                  What would success              innovation, effective 
                                                 look like?               management and good 
                                                                              skills utilisation
            Performance challenge:         Performance challenge:         Performance challenge:
                MANAGEMENT                 ATTRACTING TALENT                 INVESTMENT IN 
                   QUALITY                   To meet current, and         WORKFORCE SKILLS
             To manage and drive              future, demand for          To support productivity,  
              change, productivity              technical and              retention and flexibility 
             and skill development            management skills               of the workforce
            Growth through skills:
             How can skills help           What are the benefits 
                secure future                  to business?
                  success?
                                                                                                        3
    What key skills challenges are being faced 
    overall?
    As international competition intensifies so does the pressure on businesses to perform. 
    Productivity of the sector is growing but not as strongly as our major competitors. 
    Businesses need to move up the value chain, meet more sophisticated consumer 
    demand, and provide whole business solutions.
    Success relies on the capability of our managers to develop a culture of continuous 
    improvement, to innovate, keep ahead of developments, and utilise employee skills more 
    effectively .
        Advanced manufacturing requires highly specialised skills, which take time and significant 
        resources to develop. 
        Employers face strong competition from other sectors to attract and keep the best talent and 
        there is a lack of alignment in the skills supplied and those needed by employers.
             Investing in the workforce.  The majority of employers do train their staff but this only reaches 
             a minority of the workforce.  Spend per employee, and per trainee, in the sector is lower than 
             average.  
             Whilst the majority of employers are happy with their levels of investment, two-fifths would like 
             to provide more. 
             Poor perceptions of vocational qualifications amongst two-fifths of employers is clearly an issue. 
             But other barriers to training include cost, time and staff willingness.                           4
   Advanced Manufacturing matters
   The sector TODAY
   Traditional Manufacturing
   • Iron & steel production, shipbuilding, textiles, printing, food processing
        Advanced Manufacturing
        • The use of design and scientific knowledge to create innovative and 
         technologically complex solutions of high value
              Existing high performers
              • High productivity and international trade (R&D; computer, electronic and 
               optical products
              • High patent intensity (pharmaceuticals; biotech; measurement control; 
               chemical engineering; polymers
              • High R&D investment (pharmaceutics; biotech; aircraft and space; radio, 
               TV and communications equipment
                  Opportunities to exploit in the future 
                  • Aerospace, plastic & silicon electronics, biotechnology, composites, 
                   nanotechnology, low carbon technologies                 5
  Advanced Manufacturing matters
  The sector TODAY
  •UK’s 2nd largest sector (GVA) 
  •The sector employs nearly 10 % of the UK workforce, almost 3 million people
  •145,000 establishments (65%) in the sector have less than 50 employees
                The sector is a significant investor in R&D,  innovation and technology
                o 70% of firms engaged in innovation
                o 75% of the UK spend on R&D  was in manufacturing
                   Productivity is rising, lean production is now common place and 
                   the UK has consolidated its strengths.
                   o Generated £150 billion in 2008 (12% of UK GVA) GVA per employee 
                     stands at £49,000, while the average across the economy is £37,000
                        Manufacturing accounts for over half of all UK exports
                        o Exports of manufactured goods expected to have grown by 9% 
                          in 2011.
                        o 65% of UK manufacturing exports are from high and medium-
                          high tech firms. 
                           Government has emphasised the sector’s growth    
                            potential and is working to maximise it.
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