Overall future drivers of productivity for the sector include:

• Small supply chains firms need to meet quality and skills requirements of larger firms
• Companies are actively considering moving investment abroad due to lower labour costs.
• Lean manufacturing and increased automation of technology has allowed UK automotive manufacturers substantial productivity gains to compete with overseas manufacturers.
• Lean production features the continuous elimination of buffer stocks and indirect workers, the development of work teams capable of rotating jobs, the synchronisation of production to reduce bottlenecks and a built in quality check.
• Investment, innovation and lean manufacturing will all impact on the skills required for major productivity gains.
• A significant up-skilling of their workforce is needed to keep up with France, Germany, Japan and the USA.
• The quality of school leavers does not meet the sector’s requirements and careers advice is inadequate.
  

For specific industries:

Electronics

• Raising venture capital is a barrier to business development and management effectiveness, particularly for SMEs.
• Manufacturing has moved abroad to take advantage of lower labour costs
• Shorter product life cycles and design cycles require companies to constantly
• innovate and change products and production methods, requiring a greater breadth of skills.
• Reliance on foreign-owned firms to carry out innovation.

Automotive

• An increased requirement for investment in joint venture work on design and standardisation of common platforms as well as investment in IT-intensive real-time supply chain management.
• Increasingly important to meet customer demand for new models with greater styling, quality, performance and reliability.

Aerospace

• Levels of regulation limit investment.
• Use of modern management practices would increase profitability and therefore investment.
• Improved skills and innovation are needed to boost investment.
• Skills availability has a negative impact on productivity.
• The image of the sector has a negative impact on recruiting the right people.
• The funding of Modern Apprenticeships restricts up-skilling in the sector.
• There is a need to increase the number of science and engineering graduates and the opportunities to gain the required work experience.
• The industry is pursuing Process Excellence implementation to increase productivity and maintain the position of UK aerospace within the global supply chain.
  

Future developments in the automotive, aerospace, ship and boat building/repair, and electronics sectors include outsourcing and devolution of responsibilities down the supply chain.

The sector’s priorities for action include:

• attracting more people into the industry
• developing appropriate qualifications and learning programmes
• up-skilling the current workforce 

Source: SEMTA 2006

Further future trends are noted in the engineering industries information see: automotive, electronics and aerospace.