For quite some time UK industry has been fully aware that it’s been playing catch-up to most of its global competitors when it comes to the deployment of automation. So, where are we now, what’s changing in the sector and is the needle shifting? The Manufacturer speaks to Oliver Selby, Chairman of BARA (British Automation and Robot Association) to find out.
Market conditions for robotics and integration companies are beginning to improve after a challenging few years, though recovery is proving something of a mixed bag across the manufacturing space.
Businesses operating in food and beverage have remained relatively resilient, with robotics adoption continuing to grow. In contrast, companies tied to machine tools and automotive have faced significant difficulties, with orders frequently delayed or postponed due to geopolitical uncertainty and shifting policies around electric vehicles.
Key takeaways
Recovery is underway, but uneven: Robotics demand is picking up after a tough period, with growth in sectors like food and beverage, while automotive and machine tools continue to struggle due to delays and uncertainty.
The UK is falling behind on automation: The UK lags significantly in robot adoption compared to global competitors, with flat growth over the past decade while other nations accelerate ahead.
Barriers are more financial and cultural than technical: While skills gaps exist, the bigger challenges are short-term thinking, reluctance to invest, high upfront costs, and resistance to modernising legacy equipment.
Long-term thinking is critical for ROI: Automation rarely delivers quick returns, but with robot lifespans exceeding 20 years, businesses that accept longer payback periods stand to gain significant long-term value.
Support exists – but more is needed: Initiatives like UK robotics hubs and improved financing options are helping, but stronger government incentives and better access to funding across the supply chain will be key to accelerating adoption.
FAQs
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Despite these headwinds, there are encouraging signs of renewed activity. Over the past six months, a steady increase in new opportunities being generated is indicating growing interest and engagement in the market. However, wider uncertainty has meant that many of these seeds of promise have yet to be translated into completed deals.
“There is cautious optimism that the start of a new financial year will unlock some of this pent-up demand, as companies revisit budgets and investment decisions,” Oliver commented. “However, much will depend on how geopolitical conditions evolve, particularly in relation to global economic stability. Interestingly, tariffs have had minimal direct impact, with broader geopolitical uncertainty proving to be the more significant factor influencing customer decision-making.”
Shifting the needle
The sad fact is that the UK has always been something of a laggard as far as robotics are concerned, sitting in 24th place for the number of robots installed per 10,000 employees, and the only nation in the G7 with a robot density lower than the global average.
This would be a concern even if the UK was showing signs of acceleration and were gaining some ground on the rest. However, if anything, the other nations that have been setting the pace for years are starting to pull away even further.
Despite this, Oliver is optimistic as foundations have now been put in place to arrest this slide. The Department for Business and Trade has worked closely with Innovate UK to establish several Robotics Adoption Hubs across the UK that are specialised in de-risking automation and giving businesses the confidence to commit to the technology.
“I’m confident that we’ll see the situation begin to change,” he added. “And it has to, because the truth is that we’re fast approaching a do or die scenario for some companies who know that there’s stern European and global competition for whatever they manufacture.”
Oliver added that the last few years has seen a balancing of manufacturing quality across the globe, with customers now far more willing to look further afield.
“Components coming out of China are now, in some cases, just as good as what’s being produced in Europe, and that’s a challenge for us all to manage going forward. It’s no longer the case that we build best; we’re now competing with what were classed previously as low-cost manufacturing nations.”
When looking at the correlation of robotic deployments elsewhere in the world against increases in productivity, it certainly raises the question around why the UK has for so long, been reticent towards the technology, and Oliver puts this squarely down to short-termism, particularly around return on investment.
And he stressed that the UK needs to look at the way in which contracts are devised and developed across the whole supply chain to make it easier to automate over a longer period.
“If a company wins a sub-contract for the manufacture of parts, for example, manufacturers should be looking for a two or three year deal, rather than a six or 12 month contract. That will create the perfect environment for those businesses to automate,” Oliver continued. “And if manufacturers have that capability in their back pocket, it will stand them in good stead for winning more work in the future.
“The challenge is that the other countries we are competing with have got first mover advantage; they have already automated, and they’ve done it at a lower cost than what the current situation is for UK businesses.”
Singapore has incentivised its manufacturers to invest in automation through generous R&D tax breaks, leading to widespread deployment
Barriers to entry and investment
In the past, the main issue in robotics has revolved around skills, and while Innovate UK and the Robotic Adoption Hubs’ Skills Competition will look to address that, Oliver is not convinced that this is where the true problem lies.
Operational stock of robots across Europe has doubled in the last ten years, which is good news when viewed through the lens of competition with Asia. However, the picture looks less rosy considering that, in the same period, UK operational stock has flatlined.
“This is a shame,” Oliver added, “particularly when you consider the growth elsewhere. Operational robotic stock globally is increasing at around ten per cent per annum.”
Putting the exponential growth in Asia to one side – and focusing on Europe – the robotic density of the UK’s traditional economic competitors such as Germany (driven by automotive) France and Spain is significantly higher. Not only that but nations such as Sweden, Denmark, Slovenia and the Netherlands are also showing high adoption rates, due to the maturity of the technology within those countries.
“In terms of barriers to entry, Make UK has identified a lack of technical skills, integration and data challenges, high costs, lack of budget, workforce transition and cultural changes. That one in particular is a big challenge for me day-to-day; trying to get people to understand that robots don’t take away jobs.
I’m confident that we’ll see the situation begin to change. And it has to, because the truth is that we’re fast approaching a do or die scenario for some companies who know that there’s stern European and global competition for whatever they manufacture.
Components coming out of China are now just as good as what’s being produced in Europe, and that’s a challenge for us all to manage going forward. It’s no longer the case that we build best; we’re now competing with what were classed previously as low-cost manufacturing nations.
Oliver Selby, Chairman of BARA (British Automation and Robot Association)
“If anything, they improve and secure jobs, because companies can continue to exist, and don’t end up having to close down due to being uncompetitive.”
Of course, it would be remiss not to mention the UK’s current crisis over industrial energy costs, which is a contributing factor in the automation space. It’s no secret that modern technology is more efficient in terms of the way it’s designed, built, manufactured, and in its use of energy, so investment in this area would ultimately ease that energy cost burden.
However, there is an undoubted culture issue in the UK around modernising and upgrading infrastructure. Businesses have traditionally been happy to keep machines running – even display a sense of pride if they still have equipment that is operational several decades after deployment. And for the most part, this is not a trait shared by other nations.
“These legacy assets might well be twice or three times more expensive to run than something that’s brand new off the production line,” added Oliver. “It goes back to the total cost of ownership of a piece of equipment that’s running. If you can invest in a new piece of equipment, it may pay back a lot quicker than you might expect, especially in high energy use processes.”
Encouragement at the highest level
The Industrial Strategy, launched last year, covers much around advanced manufacturing, and there has also been a huge focus around improving the skills landscape to improve automation adoption. However, Oliver added there is still a missing piece when it comes to finance.
“It has to come down to grants,” he added. “The government won’t like that, but they’re quite willing to dish out grants to the larger manufacturing primes; what about the rest of the supply chain? How can they get hold of some cash to improve their processes?”
Robotics installations are on the rise across the globe, so the UK can’t afford to be left behind
Oliver added that this is an area that really needs investigation, and again, perhaps there are lessons to be learned from other nations.
Singapore is second only to the Republic of Korea for robot density and under the country’s Enterprise Innovation Scheme (EIS), companies can claim an additional 300% tax deduction on the first S$400,000 of qualifying R&D expenditure (for which robotics count). These represent generous, layered incentives that make it worthwhile for businesses to look at capital investment.
Top tips for deployment
Oliver explained that the key to early success with industrial automation is the low-hanging fruit and not to do too much, too soon.
“Often we see businesses coming to us with a half-baked plan of deploying a robot in a particular area because they’ve seen a video on social media,” said Oliver. “Trust the experts to tell you where robotics could make a difference in your business, and make sure you work with them – most robotic companies or system integrators are more than happy to feed into an existing business plan.”
He added that the vast majority of manufacturing businesses won’t have the data they need to populate a business plan thoroughly enough to convince the stakeholders of investment – whether that’s finance, higher engineering, management or owners.
System integrators and automation providers will have that information to hand, they will have done it before and they can help build that business case. And quite often, a key piece of information they will provide is that the ROI on any investment will be longer than anticipated.
“Manufacturers need to trust that and live with it,” Oliver added. “The reality is that most businesses won’t see a one year payback. For most it’ll be closer to two or even three years ROI. That’s the reality in around 80% of cases.
“That acceptance is commonplace in other parts of the world. An industrial robot could have a 20+ year lifetime, so after that initial three year ROI, a business will have 70-80% of the lifetime of that piece of equipment to make money from it. And that’s where UK industry needs a change of mindset.”
Finance and funding
Of course, with other fiscal constraints hampering many manufacturers – not least skyrocketing energy costs – there begs the question around how businesses, particularly SMEs, can finance investments such as these.
However, more and more financial institutions are happy to support automation solutions as a financeable option over multiple years. In addition, there are many more integrators producing off the shelf equipment, which is certainly easier to bankroll.
Whether it relates to welding, palletising, machine loading or even painting systems, off the shelf equipment – from the perspective of a finance company – is readily available and can be redeployed very easily, should they need to; which is one of the key factors lenders look at.
It will be some years before we see large-scale deployment of humanoids on production lines, but trials have already taken place at the likes of Siemens and BMW
“Does this happen often? Not really. But lenders use it as one of the key KPIs for the financing offers they give to their clients,” Oliver added. “One of the difficulties we see from a finance point of view is that often, around half the cost of a bespoke solution is in labour. That means a manufacturer is essentially having to finance the building, designing and commissioning of a bespoke piece of equipment for a certain need.
“The challenge then for any finance company, is that if that piece of equipment needs redeploying, all that cost is repeated.”
Predicting the future in a changing landscape
Industrial Strategy, geopolitical uncertainty, skills issues, energy costs, supply chain disruption – there are a multitude of factors currently shaping the industrial landscape, making any sort of prediction a tricky task.
However, it’s Oliver’s belief that the automation sector looks bright, especially from the perspective of the next generation of talent coming through. Jobs within the space currently will no doubt evolve over time, while there will also be roles being filled in five years that don’t exist at all today, so the prospects within the sector are exciting.
“Data is driving new roles every single day,” Oliver added, “so whether you’re talking about AI, ML or machine vision technology, the pace of change is rapid, and key to the role of any future engineer is understanding data, drawing the correct insight from it and understanding what it can do for your business.”
The development and roll-out of the Robotics Adoption Hubs is also likely to accelerate automation uptake, and the skills competition that Innovate UK will be running alongside those hubs will put the right skills paths in place for young people to come into the sector, which will only be good for the industry.
UK manufacturers have known for some time that standing still is no longer an option. And while the road to automation may be complex, the long-term benefits – as has been proven by other nations – are difficult to ignore. Productivity gains, improved resilience and enhanced competitiveness all point to robotics as a critical enabler of future success.
Encouragingly, the building blocks for change are beginning to fall into place, from growing market interest and stronger financing options to government-backed initiatives such as adoption hubs and skills programmes. But as those other nations continue to accelerate ahead, the UK must act decisively to close the gap.
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