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25 February 2019

Juergen Maier: “There are things happening in the North that are more important than Brexit”

The chief executive of Siemens UK has big plans for the North.

By Augusta Riddy

When Juergen Maier was ten years old, he came with his family from Germany to Leeds. It was 1974, and the UK had just joined the European Economic Community. He got a job with Siemens UK in 1986 as a graduate trainee after studying production engineering at Trent Polytechnic (now Nottingham Trent University). Maier stayed with the company throughout his career. Sitting in his office at Siemens HQ in Frimley, his abiding memory is “walking through the centre of Leeds and looking down at the River Aire which was this green slush of chemistry… if you had seen some life, you would have thrown it a line to rescue it.” No birds went there. Now, over 40 years later, Leeds is a bustling, attractive metropolis, and the businessman is delighted with the change that has taken place in his home town. “It’s transformed beyond all recognition … that same spot has riverside flats. There are birds!”

Maier, who now lives in Manchester, likes to reflect on how far the region has come since the 1970s, when social unrest was so bad that he and his brother couldn’t go into town for an ice cream, as they had in Germany. “I always enjoy that reflection. I enjoy it in a positive way because so much prosperity has been brought to the North, and we do knock it too much. We’ve come a long way.”

His accent is uniquely part-German, part-Northern; his voice could easily be mistaken for that of a football manager. And like his namesake, Liverpool FC manager Jürgen Klopp, he has developed a huge and characteristically emphatic affection for his adopted home. This sentiment is not pure nostalgia, however. Maier has high hopes for the North; he believes, with the right investment and support, it could become the home of a new industrial revolution.

“The North was at the vanguard of the first and second industrial revolutions,” he says, referring to the explosion of mass manufacturing and production that centred on the North, leading to nicknames such as “Cottonopolis” for Manchester, “but we lost our way in the third,” by which he means the use of the internet to accelerate and increase production, which countries like China capitalised on. “We lost our way, and others found their way … I think with all of the strength we have in the North around innovation, technology and manufacturing … we can again take a stronger leadership in this fourth industrial revolution.”

Maier is one of many engineers and businesspeople who believe that a set of emerging technologies – machine-to-machine communication, advanced robotics and machine learning – are beginning to transform the way things are made and sold, with profound effects for the global economy.

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He sees this as a crucial factor for Siemens, which operates a number of hubs across the North – he refers to the region as “our manufacturing centre of gravity” – and employs 15,000 people in the UK. As a member of the Northern Powerhouse partnership, Maier says the Powerhouse brand is “strong” – “I like brands!”. He does, however, question the political focus on connectivity. “The issues are much deeper than transport,” he argues.

In order to rebalance the economy, Maier says the North itself needs to “create much more economic activity” rather than waiting for the government to provide. “It is always difficult, if you’re in a scenario where you have to go with a begging bowl, and say ‘Westminster – please redistribute the wealth back up to us in the North.’ Much better is to be on the front foot and to say ‘what are we going to do to create the wealth in the first place?’”

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So how will this wealth be created? For Maier, the answer to this question is connected to what the UK makes, and how. It is time, he believes, for the North to call upon its industrial heritage, “to make sure that we innovate, we make, we create and we export more things… Even if [people] are not old enough they do know the history and what created the wealth in their regions, and they increasingly feel that the future can’t be low-value service jobs just to get people employed. It has to be more tangible.”

That’s not to say he agrees with Jeremy Corbyn, who has called for things to be built here “that for too long have been built abroad”, and for intervention to have state manufacturing contracts brought back to the UK. “I can’t think of one economic example of where that has worked sustainably for the long term.” Nor, Maier argues, is competing with the likes of China over production of existing goods the answer: “Totally wrong – totally wrong!” he says, with evident feeling.

The answer, he says, is for the North not only to produce, but to invent. An “innovation climate” must be bred to create long-term growth, and the Made Smarter review – led by Maier – was established to help the government and the private sector do just that. “Made Smarter is all about creating support mechanisms and incentive mechanisms for people to invest in technology and innovation.”

Made Smarter focuses on four key needs: leadership, research and development (R&D), government-led policy and taxation incentives, and skills. “If we get those right between us, then we can create a fourth industrial revolution. “Investment in skills is a particular priority, as the UK continues to suffer from a skills gap and the threat of an aging population: “To me, skills is everything in this. You will only do everything we’re talking about – whether it’s leadership, innovation, R&D – if you’ve educated your people to the highest possible levels.”

In September 2018, the Made Smarter Commission – co-chaired by Maier and the business secretary, Greg Clarke – was established to oversee the delivery of the review’s proposals, and a £20m North-West pilot was launched in November, to help local businesses engage in digital and technological opportunities.

It is obvious that Maier, aside from his day job of running a huge manufacturing firm, has put a great deal of time and effort into this scheme; the report alone is 247 pages, and the pilot is already up and running. He is frustrated, however, by the mammoth distraction Brexit has become. “The momentum [behind Made Smarter] is remarkable actually, the problem is that … the news is just full of Brexit. That’s unhelpful for us domestically, but it’s even more unhelpful internationally. We don’t want people to be reading about our inability to make up our mind about what Brexit deal we want, we want people to be reading about how we’re investing in the fourth industrial revolution and how you should be investing here.” Made Smarter and its work in the North is “not yet a self-generating, sustainable initiative” that can weather extended political upheaval, he warns.

For the last few months, Maier has been giving television and radio appearances up and down the country, working hard to persuade MPs and the public of the benefits of a soft Brexit. He had hoped that MPs would vote for the Prime Minister’s deal in January, as he thought it to be the best option for ending uncertainty, allowing policymakers and business “to get on with the reindustrialisation, the Northern Powerhouse, and what we need to do on transport infrastructure.” The deal was roundly defeated by 432 votes to 202.

Maier seems angry and disappointed with the risks being taken with the economy. “Business is being very responsible, in a very difficult climate, to continue to do the right things for the future economic development of Britain whilst unfortunately too many of our policymakers are involved in Brexit.” He now hopes that politicians will “get a cross-party initiative going and work out what majority [they] can agree on”.

He certainly isn’t interested in a general election; “No! That’s the last thing we need – even more uncertainty!” And what if the parties struggle to reach a consensus? “My view is very simple: as long as it’s not No Deal, we in business can live with the alternatives… The only thing we can’t make work is No Deal.” While he has never suggested Siemens would leave the UK, speed is now of the essence, he urges, as we may start to see companies pack up and leave the UK: “That risk is there, yes, because it has now been nearly three years of uncertainty … this is just too long.”

Thinking back to his childhood, Maier is particularly mindful of the EU investment that went into his neck of the woods, such as the environmental standards that helped to clean up beaches and rivers like the Aire. “I do think it’s a shame that we never attribute the EU as having been a facilitator for that [progress].” And yet he remains an optimist and a pragmatist – Maier says the EU has set high standards in the UK “that we deserve”, and which our policymakers will have no choice but to uphold. “I think there is a great deal of innovation, there are good skills, and there is a new devolved politics that’s happening. I think we will continue to make progress.”

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