Scottish manufacturing research study: executive summary

The aim of the research was to develop an understanding of the key factors which companies believe impact on manufacturing in Scotland, as part of a wider programme of work to develop a Scottish Manufacturing Action Plan that will underpin and promote a competitive and sustainable high value manufacturing sector in Scotland.

The methodology consisted of over 140 interviews with industry bodies broadly representative of the different sectors within Scotland’s manufacturing economy. These included a selected sample of manufacturing companies and other organisations who support and engage with the manufacturing sector across Scotland.

The report found that in general, there was significant optimism (greater than 80%) across the companies interviewed in terms of their growth prospects over the next 5-10 years. It is suggested that Scottish manufacturing companies typically invest less in capital equipment than competitor companies, however renewed confidence in the market may allow for greater investment in the future. The report indicates that there is a need to encourage long term planning and investment; promote strong leadership and networks of best practice and knowledge sharing; and increase links between manufacturing companies and the university sector. It was found that variation exists with regards to views on the international dimension of manufacturing, with the strength of sterling highlighted as a constraint, while Foreign Direct Investment and learning from overseas markets are seen as being of particular importance. Specific strengths of Scottish manufacturing were identified as including: the core engineering and technical skills base; and natural assets, particularly water quality and renewable energy potential. The strength of the research and academic base was also recognised. It was found that interviewees considered the key threats to manufacturing as: the ageing manufacturing workforce; minimum wage; increasing raw energy costs; challenges of planning for the future; and the lack of ability in many companies to scale up operations; and skills gaps in certain areas – in particular around production and technical engineers, food technologists, and commercial sales and marketing skills. The Sector Skills Strategies and Skills Investment Plans developed by SDS with strong industry input were found to be broadly welcomed. It is suggested that the image of manufacturing remains a challenge, and that more needs to be done in terms of attracting more females into the sector, and promoting STEM subjects across all school groups from an early age.

The report makes brief recommendations regarding the creation of an action Plan for the Manufacturing Sector in Scotland.