Industry heavyweights call for manufacturing makeover

The event, which was co-hosted by executive headhunter Finlayson Wagner Black (FWB) and Scottish Enterprise's Scottish Manufacturing Advisory Service (SMAS), also called for a tougher approach to grant distribution, more apprenticeships and moves to make universities easier to do business with.

The key points and solutions discussed will be summarised in a letter to Finance and Sustainable Growth Secretary John Swinney, who also addressed the debate.

"When you mention manufacturing, people think about heavy engineering and say that we don't do that any longer," Mr Swinney told high-profile delegates from businesses including Thales, Optos, Polaroid, Axis Shield, Caledonian Alloys, BPI and Highland Spring. "This is a perception that the government is determined to address. If we want to work our way out of the economic difficulties of the last few years, manufacturing and exports are two of the keys to that."

The Cabinet Secretary recognised the ‘powerful intervention’ that SMAS has made to Scottish manufacturers as well as the broad support available through Business Gateway.  Mr Swinney also raised the importance of Scotland’s internationalisation activity to help raise the nation's profile abroad.

Outlining "spectacular" manufacturing opportunities in renewable energy, life sciences and food and drink, he pointed out that Scottish manufacturing turned over £38.9 billion last year - adding £13.5 billion to the value of the economy. A joint communiqué with the STUC to support manufacturing, a reduction in business rates and expanding the East of Scotland Investment Fund are among the Scottish Government interventions designed to support the sector. However Mr Swinney acknowledged that access to bank finance remained a concern.

"The position is improving but is by no means acceptable with regard to the terms upon which finance is available and the characteristics of the arrangements being put in place to enable people to do viable business," he warned. "It's very much on our agenda and is something that we continue to pursue vigorously with the UK government."

Steve Graham, the outgoing director of SMAS, said the service had supported 1700 businesses over the last five years and added around £54m in productivity benefits to 400 of those. The organisation helps companies improve productivity, profitability and competitiveness by supporting the development of new products, processes and ways of working.

"We have some fantastic manufacturing companies in Scotland, but we've got to talk up our game and be less reticent and dour in terms of what Scotland has to offer," Graham said. "We've got to improve the industry's image of men and women in boiler suits bashing metal, and promote hi-tech careers like offshore wind, life sciences and food and drink.

"Businesses in Scotland are not very good at taking risks," he added. "That's become very acute over the last two years with the amount of capital declining. We've got to find a way to encourage more businesses to take risk and it's got to be at capital that is at least cost competitive."

Maximising the impact of smaller public sector budgets and smarter collaboration between the public and private sectors were also key concerns. "We need to make sure that scarce resources are really going to go to companies who want to grow," Graham concluded.

Alastair Macphie, the third generation chairman and chief executive of Macphie of Glenbervie, said the food ingredients specialist employed 24 people on new product development and launched one new product for every working day.

"I applaud the government's support for apprenticeships going forward," he said. "There's never been a Macphie family member gone to university, but apprenticeships are a real alternative to higher education. There will be a lot of debate over the next few years about who should go to university. A lot of people can't or don't want to go for a whole host of reasons. But the skills and passion that apprentices have brought to our business have been tremendous."

David Currie, managing director of oilfield services business FMC Technologies, believed Scotland could differentiate itself from low cost economies such as Malaysia or the Middle East through leadership and empowering its significant talent and skills pool. He outlined six building blocks to improve an organisation's leadership culture, including developing a vision that employees can buy into and ensuring that people and performance are recognised.

He added that FMC had licensing agreements with international universities including St Petersburg, but had struggled to form similar alliances in Scotland, with the exception of Glasgow Caledonian University.

"The universities and colleges have to get alive to commercial agreements in industry," he said. "Some of the big universities won't listen. They have a standard format and the approach is always, we own everything."

Mark Bustard, Head of Bioprocessing at the HealthTech and Medicines KTN - which supports innovation in the biopharmaceuticals sector - said building on Scotland's manufacturing capabilities in this sector was the key to unlocking "extreme high value". Biopharmaceuticals are complex medical drugs produced by bioprocessing, such as antibodies, vaccines, DNA products and cell therapies.

"By 2016, all but two of the world's top 10 blockbuster drugs are projected to be biopharmaceuticals," Bustard said. "That's a huge opportunity for Scotland, because we have particular strengths in contract services, supply chain and clinical trials to support this. But manufacturing expertise is essential in realising next generation products such as tissue products or stem cell therapies as commercial products in the next 10 to 20 years."

FWB consultant Ailsa Sutherland said she was delighted at the support the event had received and added: "With the economy emerging from the worst recession in a generation, it has never been more important to support Scottish manufacturing. We hope today's debate will help shape the future direction of the sector and will be writing to the Cabinet Secretary with the key points raised."

‘Scottish Manufacturing: a debate around development, resilience, challenge and the future’ was held at the Hilton Strathclyde Hotel in Bellshill on Tuesday 21 September.