New Times,
New Thinking.

The manufacturing sector is a vital part of the green transition

Driving economic growth, levelling up the country and reaching net zero are all interdependent.

By Andy Haldane

Growth in the UK has been stagnant for the past 18 months. Forecasters expect this growth stasis to persist for at least the next 18 months. Underpinning these anaemic rates of economic growth is the long-term malaise in UK productivity, which has flatlined since the global financial crisis of 2008. This explains why real pay has also flatlined over that period.

Low growth makes it harder to meet the challenges of the climate crisis. It has been estimated that around £20bn-30bn extra will need to be invested each year if the UK is to meet its statutory net zero targets by 2050. Which other areas of public spending must have their share cut for these targets to be met?

Finally, rates of economic growth are not just low but geographically imbalanced, which is the challenge of levelling up. Many parts of the UK, including but not confined to the north, have low levels of income per head, productivity and pay. These regional differences have widened to their highest levels in more than a century.

The three signature challenges facing the UK – low growth, levelling up and net zero – are interdependent. For example, the higher share of manufacturing in the northern economy, together with the higher carbon emissions of this sector, makes the green transition larger, and more expensive, in poorer parts of the UK.

But far from compounding the UK’s problems, there may be the opportunity of a lifetime here to turn all three into a single strategy. That strategy is to invest, at scale and in place, in so-called green or net zero manufacturing. A major conference in Sheffield last week aimed to sketch the contours of this net zero manufacturing strategy.

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It was hosted by the University of Sheffield’s Advanced Manufacturing Research Centre (AMRC), whose industrial board I chair. The AMRC is based just outside Sheffield on the site of the former Orgreave coal mine – a place of deep symbolism as the location of the infamous Battle of Orgreave during the miners’ strike of 1984-85.

The AMRC today is a pertinent example of how manufacturing could look in the 21st century. A visit to Factory 2050 at the AMRC is to step into that future, robotics and all. The AMRC, and other members of the High Value Manufacturing Catapult (HVMC) network, are demonstrating that the manufacturing sector can once again lead the charge in driving growth and productivity, while accelerating the UK’s transition to net zero. And they are doing so outside of London, helping to level up the UK.

The potential of the manufacturing sector, especially in the north of England, to stimulate regional and national growth while helping hit net zero is now increasingly being recognised by policymakers and politicians. Two months ago, South Yorkshire became the UK’s first Investment Zone – designated areas of high-innovation, placed-based growth. This has the potential to reshape the industrial make-up of South Yorkshire as a green manufacturing superpower centred around the AMRC.

The investment zone and the AMRC are, however, about much more than growing jobs, income and productivity. Part of the AMRC’s role is also to showcase engineering to children in local schools and help transform the skills of young people through its training centre apprentice programme. On its doorstep sits one of the biggest brownfield redevelopments in the UK, with thousands of new homes and hundreds of acres of green space.

The AMRC and the accompanying investment zone illustrate, in practice and in place, how economic, social and environmental capital can be natural bedfellows when they are pursued strategically and innovatively. It is sometimes said that the future is already here but unevenly distributed. The opportunity is now here to bring the green manufacturing future into the present, boosting growth, speeding up the passage to net zero and levelling up the UK.

[See also: At Cop28, the UK must be honest about UAE’s human rights record]

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