Target supply chains to boost competitiveness, says CBI

15 September 2013

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16 September 2013 | Will Green

Firms are split on whether business conditions in the UK will improve over the next five years, according to a survey.

Research by the CBI, published 12 months after the government launched a new industrial strategy, shows just 51 per cent think conditions will improve.

In a report Raising the Bar, the CBI said 63 per cent of companies did not think the government was strategic in how it used policy and funding levers to underpin UK competitive advantage, and 60 per cent were unclear about what UK industrial strategy is trying to achieve.

The report said: “Above all else, targeted action to strengthen the supply chains underpinning key sectors should now be prioritised. 

“Action should be focused on improving understanding of supply chains to help target weaknesses and reinforce strengths, promoting existing initiatives to support supply chain development, and encouraging and incentivising supply chain collaboration.”

The report came as the government announced £116 million of investment in the manufacturing supply chain.

Business secretary Vince Cable told a conference the investment from the Advanced Manufacturing Supply Chain Initiative would strengthen supply chains and encourage new suppliers to locate in the UK.

Cable, speaking at the joint government and CBI Industrial Strategy Conference, said: “A stronger economy won’t be built overnight. It won’t simply emerge of its own volition. It will come from long-term thinking and the government working in partnership with business.

“We know manufacturing, training and innovation have all suffered. I hear it time and time again from companies across the UK. That’s why our industrial strategy is making the most difference by strengthening manufacturing supply chains, supporting new designs and developing skills.”

CBI director-general John Cridland said the government had made “good progress” on its industrial strategy but “still had some way to go”.

He told the conference: “Strengthening supply chain companies that underpin our champion sectors will make industrial strategy real to people and businesses in every region of the country.”

The CBI report pointed out 80 per cent of automotive parts could be sourced in the UK, compared to 36 per cent that currently are, and UK companies have only won around a third of contracts involved in new offshore wind energy developments.

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