Building Agility in Manufacturing, a new survey report by PwC and Make UK, reflects on the unprecedented challenges that faced UK manufacturers last year, from supply chain shocks and managing on-site and remote workforces, to changing customer expectations.
Customs delays (47%) and increased costs of regulation (39%) are among the biggest risks to the supply chain with fears of national/local lockdowns reported as the second biggest risk overall (46%).
A third of companies believe the investment prospects for UK businesses will decrease now that the UK is no longer part of the EU, however, many manufacturers still believe the opportunities to come will outweigh the current risks for their businesses. Almost 40% see a significant or moderate improvement for the industry in 2021, which is something to embrace and encourage.
Cara Haffey, PwC’s manufacturing and automotive sector leader, said:
It is heartening to see that so many respondents are focusing on strengthening business resilience this year by investing in their people and diversifying their trade models.
Four in 10 manufacturers are focusing on new product development in 2021 with many others looking beyond current offerings to explore new markets as well as adopting technology to boost efficiency and drive productivity. People are still in sharp focus with 40% of firms planning to continue investing in apprenticeships despite the difficulties caused by the pandemic.
With the EU trade deal now confirmed and positive progress with both COVID-19 vaccines, business leaders should have the confidence to start planning for the future with greater clarity.
UK manufacturers are resilient by nature and, with the right investor and government support, their agility and drive will enable them to build new trade networks and embrace the clean, green digital revolution, ensuring the UK remains a go-to destination for many more years to come.
2021 will be the year manufacturers can really show their mettle, playing their role in building a stronger, innovative industry, and helping to make the UK a great place to work and do business for generations to come.
Dinesh Patel, PwC’s UK space lead, says:
The idea of using nuclear power to propel spacecraft into deep space is not something new but dates back to the early 20th century. During this period, the US and Russia - and even the UK as part of project Daedalus in the 1970s - have performed studies to explore the viability of such technology.
These technologies are aimed at allowing faster travel to further reaches of space. In the immediate term, it could support the ability to allow astronauts to travel to Mars faster and minimise the time the astronauts are exposed to radiation.
What is most unusual is that until now, most of the UK’s involvement in human spaceflight and research in the space environment has been through the European Space Agency (ESA). This partnership with Rolls Royce potentially indicates a new direction for the Agency, outlining areas of interest to the UK and a willingness to invest in innovative national programmes.
The UK has significant expertise in this area. The involvement from Rolls Royce alongside existing national nuclear capabilities is likely to be good news for British engineering and innovation.
Three quarters of companies are considering using ESG targets into their executive pay incentive plans or will strengthen their current approach, a PwC poll of 50 companies shows.
Nearly one third (30%) of respondents say they are looking to incorporate ESG targets into both their annual bonus and long term incentive plans (LTIP). Just over half (51%) say they are considering using the targets in bonus structuring only while 19% are more likely to introduce them for LTIPs only.
Of all the ESG measures, ‘environmental’ is the one being considered by the largest number of companies in both long and short term planning.
Phillippa O’Connor, reward and employment leader at PwC, said:
While many companies have talked about ESG measures in executive incentives for some time, it has tended to form a very modest part of the bonus decision. We’re now seeing a rapid expansion of the environmental and social targets in a more significant way across both the bonus and long-term incentive thinking.
This is no surprise given the investor focus on ESG practices within businesses. A lack of historic data and benchmarking around industry standards has proved a stumbling block for many companies when setting targets and more than half of the companies we polled revealed they do not currently use ESG targets in their own incentive planning or bonus structure.
But the noise is only going to get louder. The measures themselves depend on the sector, but workforce diversity targets, reducing single use plastics and looking at the sustainability of investments within asset management are all areas where we expect to see new metrics being introduced.
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Something to listen to: ‘N for Nanotechnology’, the latest episode in @PwC_UK’s A-Z of #Tech podcast series, looks at the amazing opportunities this tiny tech offers to advanced medicine and sustainable technology - pwc.to/2X7y9Tm
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