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Blog: Did Covid-19 and Brexit really put smart manufacturing on hold?

When we published our whitepaper – Unleash the power of the Smart Factory – in September 2019, no one could have predicted the wild ride we were about to go on.

We were two months away from the first coronavirus being identified by the Wuhan Municipal Health Commission, and UK EU withdrawal proposals were still being debated in the House of Commons.

Looking back now, over two years later, it’s fair to say that for many businesses, things did not go quite as expected across 2020 and 2021.

Far from having the resource to push forwards with the hailed ‘fourth industrial revolution’ – a time in which automation and data exchange would transform our key economic sectors – manufacturers instead were thrown into a state of emergency.

Wide-spread skills shortages increased, access to international talent became harder, supply chain issues were compounded, and for many, productivity and financial performance were well below forecast.

Now, as the World Health Organisation predicts a ‘long period of Covid-19 tranquillity’ and with new trade deals being negotiated every month, is it time to seriously bring Smart Factory ambitions back into focus? We think so.

There has been progress

There are 54 officially recognised Industry 4.0-leading smart factories in the World Economic Forum’s ‘global lighthouse network’, and ten were added in 2020. So, for some, advancement hasn’t slowed at all and macro factors only accelerated the implementation of 4.0 systems and technologies.

Elsewhere, even if full ‘smart factory’ status hasn’t been reached, most operations do now include some elements of what makes a factory ‘smart’ – i.e. the automated collection of data from machines that is transformed into immediate insight.

What’s next for Smart Factories?

So we can’t do our manufacturers a disservice here. It’s been an unprecedented time for them, but the determination to move forwards and evolve is very much still there.

Luckily, it’s easier than ever to find a solution if you really want to invest in transforming your operations.

  • There are examples of how to do it that you can learn from, as mentioned above
  • There are start-ups disrupting the market, making the technology cheaper and easier to implement and use
  • Government investment in Industry 4.0 is at a record high with schemes like ‘Manufacturing Made Smarter’ offering millions in funding

What all of that actually means, then, is that Industry 4.0 in 2022 is less about introducing smart technologies and more about using them to make a real difference. To operations, to the UK economy, and to entire sectors and everyone they impact, from leaders to workforces to consumers.

If you’re behind this curve, do you know why? And if you’re struggling with how to maximise your investment in smart, ask yourself:

  • Is my workforce using what we have effectively and if not, how can I bring them on the journey with me?
  • What part can I play in the sustainability agenda and does the tech I have support it?
  • With all this data at my fingertips, how can I use it to differentiate my own offering to stay competitive?

Funding the next phase

Whether you’re looking to optimise existing smart operations or you’re restarting the journey to becoming smart, financial support is still out there.

Offsetting investments in R&D

In the UK, tax credits are available to offset investment in R&D activities focused on unlocking innovation.

The system works by providing tax relief on costs directly associated with R&D – commonplace for manufacturers adopting and transitioning to smart technologies.

It’s paid either through a direct tax rebate or a reduction in corporation tax and can be backdated by up to two accounting years. Small and medium enterprises and larger businesses alike can claim, including those that are currently loss-making.

In the 2018-19 period there were just over 17,000 claims made for R&D tax relief from companies within the manufacturing sector, with an average claim value of just £100,264.

Considering the level of investment we’ve explored above, the size of the sector, and the vast array of innovation-active companies that it includes, we’d expect that claim value to be much higher.

What that shows us is that there are many companies who are undertaking qualifying activity that are claiming, while those that are claiming are potentially missing out costs that could be included.

Are you one of them?

Grants and regional schemes

Well publicised assistance is also available through Innovate UK Smart Grants, Knowledge Transfer Partnership, Innovation Loans and the Small Business Research Initiative, as well as through local or regional funds.

Some live Innovate UK competitions and challenges to make note of include:

A round-up of funding available for manufacturing and materials businesses can be found at ktn-uk.org.

The right help

Like the UK Government, our goal is to help business owners usher in a new dawn of manufacturing productivity. We believe that by helping those companies investing in technological and scientific advancement, we can make the UK a world-leading knowledge economy for the benefit of all.

How we do that

We are proud to say we have analysts from manufacturing and engineering backgrounds in-house who partner with qualified tax advisors and accounting to help businesses like yours get rewards and funding for being innovation-first.

A quick conversation with one of our team will help you understand where funding for your smart transition may come from or what incentives you may qualify for, and if there’s a way we can help you access those finances, we will.

Get in touch