Government-commissioned report provides new evidence on the future of UK manufacturing

Cambridge Industrial Innovation Policy has authored a new report, The changing value and structure of the UK manufacturing sector published by the Department for Business and Trade (DBT).

The report provides fresh insights into how manufacturing contributes to the UK economy and how its value and structure are evolving, and reflects the latest evidence on the sector’s direct and indirect economic contributions, the growing role of services, and the nature of advanced manufacturing. 

Drawing on innovative measurement approaches and international comparisons, the study highlights that a broader view of manufacturing – including its wider value chain – contributed an estimated £331 billion to the UK economy and supported around 4.3 million jobs in 2022.

It highlights the increasing integration of services within manufacturing activities and proposes new frameworks for defining advanced and emerging manufacturing sectors in policy analysis. 

The analysis also finds that the UK’s relatively modest manufacturing footprint compared with comparator economies reflects both a smaller industrial base and weaker domestic value-chain linkages, rather than statistical undercounting.

The report addresses four interrelated policy challenges: how to measure the full value of manufacturing beyond standard statistics; how to understand the increasing role of services in production; how to define and quantify advanced manufacturing – understood as activities that are hard to replicate or substitute because of their use of innovative technologies, methods or materials; and how to systematically identify emerging sectors within advanced manufacturing.

“UK manufacturing has changed significantly over the past decade, both in its structure and in how it creates value. By bringing together new evidence on its direct and indirect contributions, this report helps to clarify the true scale and nature of the sector’s impact. We were delighted to support DBT with this analysis, which we hope will contribute to a more informed debate about the future of advanced manufacturing in the UK.” Dr Jennifer Castañeda-Navarrete

The findings aim to support evidence-based industrial strategy development by government, industry and policy stakeholders as the UK navigates a rapidly changing global industrial landscape.