Susanne Baker from EEF argues that the UK must invest in research and development if it is to compete in the global green goods sector
The UK is the world’s sixth largest producer and provider of low-carbon goods and services. But there are signs that progress in this sector is faltering.
Manufacturing, the largest slice of activity in the sector, contracted in 2010/11, while China, the US and others are experiencing rapid growth in low-carbon goods and services.
Yet there remains a real opportunity for the UK as a whole, and for manufacturers, especially in energy technology sectors.
In our latest report, Tech for growth: delivering green growth through technology, EEF outlines the steps the government must take to support low-carbon manufacturing and help manufacturers decarbonise.
First, the government needs to set out its economic vision for manufacturing. A strategy to tackle the greenhouse-gas emissions from manufacturing processes, not just from the energy consumption of industry, is missing. Industry needs to know what is expected of it: 2050 is just one or two investment cycles away for some sectors.
A strong innovation culture holds the key to minimising the cost of meeting climate change targets, reducing the cost of energy, capitalising on the economic opportunity presented by green growth and overcoming the technical challenges to decarbonise industry. But this is being undermined by an erosion in spending on research and development (R&D).
The UK must invest more in R&D. This must be underpinned by improving the skills of the workforce: without skilled people, the UK won’t be able to innovate.
Finally we need to ensure that finance works effectively. Manufacturers have implemented technologies that deliver paybacks within the normal investment horizon, but the UK now needs to unlock the next tranche of technologies, with longer payback periods. Our report sets out some initial solutions.
Get it right and UK-based firms will continue to export low-carbon solutions to the rest of the world.
Susanne Baker is senior climate and environment adviser at EEF and author of and author of Tech for growth
