Industrial Digitalisation – A cure for the British Economy

I am delighted and honoured to have been asked to lead a Review on Industrial Digitalisation as part of the Government’s recently published Green Paper on Industrial Strategy. Today, we held our first launch meeting with top companies from across the country, including IBM, Rolls Royce, GKN, Cisco and Accenture, along with many other business leaders. Nick Hurd, Minister for Climate Change and Industrial Strategy joined us and we are hoping that this initiative will turn into a very strong partnership between Government and Business and create significant value for the UK economy.

You will probably  have heard about the new modern Industrial Strategy, launched by the Prime Minister recently, and in this blog, I wanted to talk about this and explain what we will be doing with our review – and why it is especially important for our economic future.

The first obvious question is what is Industrial Digitalisation? It has sometimes been described as Industry 4.0 or the 4th Industrial Revolution.  And you will hear jargon such as the Internet of Things, Connected Devices and Big Data.  But at its most basic, Industrial Digitalisation, and the purpose of this Review, is to work out how UK manufacturing can increase its use of digital technology and automation to become more productive and competitive.

Of course, there is nothing new in this – the essence of manufacturing has always been about using new technologies and finding new ways of working.  But this latest technological trend –connected, smart products that collect data and communicate it to users – is sure to create new business models, service offerings and very importantly, brand new industries.

But as always there is a global race to get ahead.  So the Industrial Digitalisation review is about identifying policy interventions and support mechanisms that will encourage advanced manufacturing and broader industry in the UK to invest more in digital technologies and drive faster innovation, and automation of industrial processes.

At the same time there is a wider economic and societal imperative for doing this. It isn’t just about numbers, processes and investment strategies.

If we get  this right, there is a massive prize – creating a key lever and a cure for the British economy. Creating opportunities for many new and highly skilled and well paid jobs, and giving more people in our economy the chance to feel less like they are being left behind. This is of course a message we have been hearing loudly from many of our communities, especially outside of the South East.

Get it wrong and we will de-industrialise more, losing out on high-value, well paid jobs and relying on imports even more than we currently do.  If this happens, it is sure to be harder for the UK to balance its books and living standards would inevitably drop.

A lot of what we do, will be about assessing what sectors would benefit most from this approach and the technologies where the UK has the opportunity to be world class in the future. We’re ambitious but we are realistic too – we can be at the forefront of the industrial digital age, but we think it is a long term job with no quick solutions to such a complex set of issues.

We will also learn from the approaches of some of our international competitors, such as the USA and Germany. We will report in the summer and the intention is that its recommendations could form the basis of Industrial Digital Sector Deal, and create a very strong partnership between business and government. 

Regular readers of this blog or those who have heard me speak will know that I am incredibly passionate and optimistic about the UK’s ability to benefit and become world leaders in this area.  I would really welcome your feedback and ideas in the comments section below.

10 thoughts on “Industrial Digitalisation – A cure for the British Economy”

  1. Hi
    I have great interest in Higher education and industrial digitisation and would like to get a copy of the report mentioned in the Guardian toady – is the possible?

    Robin Baker

  2. Juergen,

    I recently found out you were leading the Industrial Digitisation Review Leadership Team.

    I firmly believe that industrial digitisation can be key to future economic productivity for those of us outside the M25 and look forward to reading your review of the strategy. With regards to the IoT and IIoT, there are various numbers banded about but a recent Forbes article had 20.7 billion connected devices by 2020 and 75.4 billion connected devices by 2025 with the economic impact somewhere between $3T and $6T by then. So in time, when the UK finds itself world class in the delivery of IoT / IIoT solutions (Data storage / Data Analytics / Data Communications [from the factory floor or sensor tip to the cloud]) due to a sustained effort from industry, academia and successive governments, then both the economy across the entire UK and the countries competitiveness will be enhanced noticeably.

    I think the above also relies on Pillar 3 of the green paper to some extent with the upgrading of digital infrastructure such as the roll out of full fibre broadband and the deployment of 5G mobile technology as these can only further enable and enhance industrial digitalisation.

    Wishing you all the best with this challenge,


  3. Hello Juergen. A voice from the recent past here! Having retired early from Siemens last year, I have plenty of time and used some of it to thoroughly read the Goverment’s Industrial Strategy green paper and to also send them a detailed response. My main observation was that, if the goals outlined in the green paper are achieved, we will indeed massively improve our economy in the medium to long term. However an awful lot of resource will be needed to make this happen and I am not confident that government (national and regional) is in a position to provide the necessary funding and people. I suggested that there must be tens of thousands of people like me, newly retired professionals, who would be willing to get involved in the initiative in some way. If you agree then perhaps you could promote the suggestion to the relevant people? All the best.

    1. Great to hear from you Bob and a great idea also. I’ll place your thoughts in a couple of places. It of course would need some resource to coordinate such an effort to make sure it is targeted, but I guess that should be possible!

  4. A really interesting blog post and really relevant to my sector of building services and construction. Digital provides the tools for us to overcome the challenges we face in productivity, safety and skills through; off-site & modular techniques, energy optimisation and design for performance. The lines between industrial sectors are becoming more blurred, I think we will see the emergence of new exciting companies that link energy, construction and manufacturing.

  5. Juergen,

    I work for the building engineering services sector representing the interests of circa 12000 contractors who are active in the design, supply, installation, operation and maintenance of technology within the built-environment – we use the phrase built-environment because this covers the full spectrum of structures and buildings within housing, health, energy, education, infrastructure, office, retail etc.

    My personal interest in this area comes from being blind and knowing how technology has revolutionised the economic, professional and social existence of the blind community over the last 7 years.

    I am our Director of Legal & Commercial and of Policy and run a team of lawyers advising those operating in our market. Our market is made-up of over 280,000 businesses, but 99% are SMEs. It involves on average 70 sub-contract packages and a supply-chain, which comprises 4-5 tiers. On top of this 40-60% of the cap ex value of any built asset is derived from the mechanical, electrical and plumbing technologies, which make built assets smarter, more carbon efficient and functional for society to operate in.

    To give you a picture of the eco-system in which my industry operates, it is historically seen as an industry of two halves. 1) Construction; and, 2) Facilities Management. However, this structural commercial divide in itself leads to a devaluing of the built-environment. If construction is isolated commercially from, the operation of the built asset, then the highest tolerable price is charged for the lowest cost product, which inevitably leads to a long-term reduction in quality and increase in operating costs.

    The whole life cost of built assets is represented in the 10:80:10 ratio – the cost of a physical built asset can be broken down into 10% construction, 80% operation and 10% demolition/recycle/recirculation. Centres such as the Future Cities Catapult are vital for exploring, enabling and attracting innovation on how the built-environment can positively influence economic and social issues.

    My industry is incredibly immature from a digital technology perspective and is ripe for transformation on 2 levels. 1) Digitisation of the construction and operating process; and, 2) digitisation of the business operating models and systems, which exist within the industry’s, supply chain. However, whilst the industry has made some embryonic footsteps (BIM, off-site prefabrication, 3D printing etc) towards the exploration of the true potential of digitisation, we are a long way from embracing the synergies and productivity benefits.

    We are viewed as a key economic contributor and enabler for the wider economic and social plans within the UK, but are often underestimated in our ability with the right support to contribute through innovation on topics such as smart cities and smart infrastructure.

    Our hope is that with the right dialogue and leadership, we can ensure digital disruption is positive within this industry and that it remains a key competitive contributor to the continued success of the UK moving forward delivering value for money over the whole-life of the built-environment and not just in the construction phase.

    If we can help in any way – we would be very happy to get involved.


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