91% of North West manufacturers engaged in innovation, but sector still dogged by fears of falling behind

EEF, the manufacturers’ organisation

Over nine in ten manufacturers (91%) in the North West are engaged in innovation, according to a major new survey published today by EEF, the manufacturers’ organisation, and Vodafone UK. The findings suggest that the region’s manufacturers are keeping pace with peers elsewhere in the UK, but share the same fears about falling behind competitors.

The EEF/Vodafone 2015 Innovation Monitor shows that the main focus for North West manufacturers is on improving their products (77%) and their manufacturing processes (76%). However, over half (53%) have innovated around improving their organisational methods and systems.

And the innovation doesn’t stop there – half of the region’s manufacturers (50%) have innovated to improve their service, matched by those who have revitalised their marketing or distribution methods (50%).

The biggest driver for manufacturing innovation is the desire to satisfy existing clients (60%). However, over five in ten (51%) of the region’s manufacturers have innovated in the last three years to comply with environmental standards and regulations – higher than anywhere else in the UK.

Export success is also clearly top of mind – four in ten North West manufacturers (40%) say that developing existing export markets is a key innovation driver, while 37% say that seeking new export markets has been the impetus behind recent innovations.

The research shows that, UK-wide, manufacturers are highly ambitious about innovation and are investing heavily in it. But they are finding innovation challenging and a lack of resources is reducing the chances of success. At the same time, manufacturers report for the second year running increased concerns about falling behind competitors. The number concerned that their level of expenditure on innovation is not enough to keep pace with competitors is up from 19% in 2013 to 28% this year.

Stephen Fitzsimons, North West Region Manager at EEF, says: “Manufacturers continue to forge ahead into new markets at home and abroad, with investment in innovation playing a starring role. However, innovation is a resource-hungry process and manufacturers are finding that the results they achieve do not always match their ambition. Shortages of expertise, equipment and finance are holding them back.

“This matters for manufacturing and for the UK because manufacturers are increasingly concerned about falling behind competitors. We’ve seen year after year that manufacturers want to do more and every additional pound invested in developing the products and services of tomorrow can help get the UK closer to its goal of having a more productive economy. This ambition should be matched by Government to ensure the UK continues to compete on the global stage.”

Tim Hancock, Head of Manufacturing at Vodafone UK, says: “It’s essential that we create the right environment for continuous innovation in manufacturing, which is the backbone of UK industry. The good news is that almost all manufacturers are innovating in one form or another and with a variety of business goals, but they are doing so with decreasing diversity. This seems to be down to an organisation’s size and access to resources, which can impact the level of innovation that can be taken on without disrupting day-to-day operations.

“Despite this, it is well-recognised that to keep pace with competitors both at home and globally, innovation is an essential ingredient. Improvements in other areas, such as streamlining operations to enhance productivity, maintaining full visibility of a connected supply chain and improving responsiveness can free up valuable resources that can be re-invested in innovation across a variety of areas.”