Technology and Industry 4.0 can help with the challenges UK manufacturing faces due to Brexit but they are not the solution, according to a report.
The report on manufacturing and Brexit, by think tank The UK in a Changing Europe, said there had been optimism around the potential of technologies such as 3D printing, but it could not replace supply chains that depend on frictionless trade between the UK and EU.
“Industry 4.0 technologies can be a part of the solution to the issues that will likely arise after the transition period ends, but they cannot be the solution itself, particularly if there is no trade deal,” said the report.
“3D printing as a technology is simply not capable of eliminating the need for supply chains.”
The report also said reshoring, as a way to shorten supply chains, faced “many barriers”, including access to finance, wage and energy costs, and availability of land.
“Reshoring would require a much more supportive industrial policy than is currently on offer,” said the report.
The report said some sectors, such as automotive, could “suffer a severe blow” from the imposition of WTO tariffs in the event of no deal, adding: “In almost all cases, Brexit will create additional financial or other cost burdens for companies.”
During a press launch Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said 1,100 trucks came into the UK each day carrying components for just-in-time operations.
“We have a dependency on imports. Not surprising given the complexity of what we produce,” he said.
“The entire European industry sources across Europe.”
Hawes said most cars bought in the UK were imported and WTO tariffs would add around £1,500 to the price of a vehicle.
“Brexit has been about damage limitation,” he said. “We do need that free trade agreement. Without it some of decisions these global companies are making will be difficult.
“If we can avoid tariffs that is the main priority.”
The report added: “Whatever the form of Brexit, it seems that a better funded and more active industrial policy will be needed to boost competitiveness in the UK manufacturing.”
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