Fourth Industrial Revolution

Chris White Excerpts

Thursday 8th September 2016 Commons Chamber

[Chris White (Warwick and Leamington) (Con)]

May I, too, start by congratulating my hon. Friend the Member for Havant (Mr Mak) on securing this important debate? May I also say how delighted I am to follow the hon. Member for Hove (Peter Kyle)? I thank him, as a colleague on the Business, Innovation and Skills Committee, for yet another excellent contribution.

Industry 4.0—we all call it different things—is an extremely dynamic prospect and something that the UK must fully embrace in the years to come. I do not know whether we can talk about centuries to come, as my hon. Friend did earlier, but I know what he was trying to say. As the co-chair of the all-party group on manufacturing, I appreciate the importance of raising awareness of this topic, and this debate gives us a great opportunity to do so.

In my intervention in business questions this morning, I was pleased to be encouraged by the Leader of the House to raise the issue of industrial strategy with the Backbench Business Committee, and I hope my hon. Friend will join me in making that application.

Using technology to aid production is clearly not a new idea, but the advancement of digital and machinery in the last decade has brought to light the concept of this industrial revolution. The first saw the Victorians rapidly improving their wealth and their economic outlook, and we must not underestimate the ability of state-of-the-art systems to change and have a similar impact on the way we do things now. A particular point to stress is that other nations are advancing on this issue, and that is why we must keep up. Countries such as Japan and Germany are already understanding the benefits of these technologies, and we cannot allow them to have this window to themselves.

Through-life engineering services are one way in which we can help innovation to flourish in the UK. The aims of TES are to improve the availability, predictability and reliability of complex engineering products, to deliver the lowest possible whole-life cost. This is an area where we can take the lead. I recently spoke at the launch of the new TES national strategy, and such a focus on improving the design of systems is an important way forward.

More broadly, we need to act now to compete internationally. The adoption of cyber-physical systems that are able to collect data, provide insights and be used on a large scale in heavy industries is vital for the UK manufacturing sector moving forward. Machines using self-optimisation and self-configuration allow complex tasks to be completed in a way that dramatically increases cost efficiencies and delivers better quality.

The potential is obviously immense. Businesses will be able to streamline production, reduce waste, conduct rapid prototyping, exploit new business models and dynamically engage with customers in real time. A European Parliament briefing paper estimates that improvements in efficiencies of between 6% and 8% can be achieved and that, in Germany alone, industry 4.0 will add 1% of GDP to the economy.

One of the recurring themes from meetings of the all-party group is the need to plug the skills gap. As mentioned in the group’s submission to the Business, Innovation and Skills Committee’s inquiry into the productivity plan, the current level of skills in the UK is inadequate for the future success of manufacturing. Satisfying this need for high-level skills is vital for productivity and can be done in a number of ways. Firms need to invest in increasing capacity, and the flow of talented individuals into the workforce must be continuous, with apprenticeships a notable factor in making that difference. Industry 4.0 and its associated benefits are a way of speeding up that process and improving the outlook in terms of our skills shortage. I hope the Government can enhance their support in that regard.

The backing of the UK catapult centres is proving extremely successful. The Digital Economy Bill, which seeks to improve our digital infrastructure, is an encouraging indication of the Government’s commitment, but we should continue to look at all possibilities to secure the UK’s role as a leading research nation. Investment in R and D will encourage new production in the UK, as well as further reshoring. R and D tax credits have been a major boost, particularly for small and medium-sized enterprises.

Another recurring theme in discussing the future of manufacturing is the reshoring of production and the significant impact this has on the sector and the national economy as a whole. In enhancing our efforts, an increase in intelligent automation can be a significant driver of economic growth. With such a significant change, new business models should be analysed, and the adoption of the concept of industry 4.0 fully considered. The significant investment needed may hinder small and medium-sized businesses in the medium term, considering the high level of funding needed to pursue such systems.

There are also issues of data protection. With such technologies, the large volume of data used in production will obviously be sensitive. If competitors were to access the information gathered by smart machinery, profits could be squeezed. It is therefore imperative that legislation around data protection is tight before businesses can be confident about changing their business models.

To name just one more challenge that I see in the digitisation of the market, there is a concern that our talent pool will lack the necessary skills to operate machinery encompassed by the concept of industry 4.0. It is generally accepted that there is a shortage of experts in information and communications technology, and that may be more pronounced in terms of the need for cyber-security and the transfer of big data.

If we are to push forward with industry 4.0, we need to ensure that the whole system, including education and apprenticeships, works in harmony to provide the necessary skills. The industrial strategy is particularly relevant in that respect.

It is therefore clear that we have an incredible opportunity to rapidly advance manufacturing in the UK, and this debate is an excellent way of kick-starting the discussion around how we go about embracing these new technologies and how we overcome the challenges involved in doing so.