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SUPPLEMENT SUSTAINABILITY IN MANUFACTURING
DIGITALISATION: THE KEY TO ACHIEVING NET ZERO
Digitalisation is playing a huge role in the drive towards a sustainable and Net Zero future. But despite many UK manufacturers reaping the benefits of digital technologies, 16% of
manufacturers still have no plans to invest in them. Rachael Morling reveals the findings of
MAKE UK’s, in partnership with Sage, Digitalise to Decarbonise report, which recommends policies the government could introduce to help manufacturers hit Net Zero targets
D
igitalise to decarbonise. This was the topic of a recent press event I attended in which MAKE UK discussed the role
digital technology can play in helping British manufacturers reduce energy use, boost productivity and innovation, and take steps towards a Net Zero future. Manufacturing is key to helping the UK
achieve Net Zero emissions by 2050. Nearly a quarter of manufacturers believe new digital technologies have had an impact on decarbonisation and their businesses’ ability to achieve Net Zero carbon emissions; and 43% expect that these technologies will positively impact decarbonisation in the future. In fact manufacturers today are investing
more in digital technologies and reaping the benefits. According to the research, the need to reduce carbon emissions is becoming a priority for many businesses, with around 23% having already invested in digital solutions and 24% planning to invest. Around 62% of those who have adopted digital technologies are already reporting significant cost savings, with half reporting savings of between £10,000 and £100,000 over the past 12 months. A further 46% said the savings came in at under £10,000 but were still significant to their overall balance sheet. 44% of companies surveyed said that digitalisation has been their company’s top driver of productivity improvements, with production processes streamlined. Critically, the report states, 18% of
manufacturers that invested in and implemented digital technologies have benefitted from reduced carbon emissions. Moreover, 27% of manufacturers saw a reduction in energy consumption, while 26% saw a reduction in raw material and waste efficiencies. Both of these outcomes will also be contributing to carbon emission reductions. According to the report, multiple digital
technologies are being deployed, but in particular manufacturers are using new data analytics tools, data capturing tools and supply chain management tools to decarbonise. In fact data analysis is proving beneficial, helping manufacturers to capture data from different stages of the manufacturing process and production lines, helping to pinpoint bottlenecks and areas for improvement, and therefore streamlining production. However, despite the clear benefits, around 16% of manufacturers still have no plans to invest in digital technologies to reduce their carbon footprint. Reasons for this range from lack of information to belief that there will be high costs and a long payback (around 46% of companies said that more evidence on investment return would help drive the decision to adopt digital decarbonisation technologies); while the skills shortage is a further barrier to adoption. Help with upskilling the current workforce is seen as a key incentive by nearly half of companies. So what can be done to encourage
manufacturers to invest in digital technologies and accelerate their company’s decarbonisation plans? According to the report, incentives for investment are needed, such as: • 52% of companies cited tax incentives • 46% want more evidence of the return on investment • 45% want tax incentives to train existing employees • 45% want expansion of R&D tax credits to include green technologies • 39% want easier access to funding for digital adoption
• 30% want information and guidance on how to adopt digital technologies • 28% want a regionally focused funding body that provides advisory services (Made Smarter Adoption)
34 DESIGN SOLUTIONS - SUPPLEMENT JULY/AUGUST 2023
• 26% want access to non-partial specialist technical advice.
RECOMMENDATIONS MAKE UK has therefore published a list of policy recommendations that the government could introduce to help manufacturers hit Net Zero targets: 1. Commit to Made Smarter across the UK and expand its remit. The government should commit to the full roll-out of Made Smarter which has proven to support the adoption of new technology in manufacturing businesses. It should also extend the remit of Made Smarter to include industrial decarbonisation to help support manufacturers become more energy efficient and transition to Net Zero. 2. Expand the R&D tax relief to include capital equipment relating to industrial decarbonisation.
3. Introduce a Help to Grow Green scheme: Existing funds such as the Industrial Energy Transformation Fund (IETF) should be extended, increased and reshaped into a more accessible fund.
4. Introduce a green skills tax credit. 5. Introduce employer incentives for digital and green apprenticeships.
6. Enable employers to invest in upskilling and retraining through a reformed apprenticeship levy.
7. Renew the Industrial Decarbonisation Challenge (IDC) support for the development of low-carbon technologies and infrastructure beyond its current expiry date of 2024.
8. Improve micro and SME engagement and collaboration with the Digital and Energy Systems Catapult Centres. 9. Set the long-term direction and boost incentives for industrial energy efficency. With energy costs soaring and climate change continuing, digitalising to decarbonise is rapidly becoming the fastest way to scale sustainable impact but, as this report shows, there is much work still to be done.
MAKE UK
makeuk.org
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