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UK aims for 55 percent rise in electronic systems to create GBP120bn industry by 2020

UK aims for 55 percent rise in electronic systems to create GBP120bn industry by 2020

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By eeNews Europe



Called the ESCO Report, (Electronics Systems: Challenges and Opportunities), the strategy document details how the industry can grow to contribute 7.1 per cent of GDP by 2020. The Report was created for the Department of Business, Innovation and Skills.

The rise from today’s £78bn to £120 billion would place the sector among the top five UK industries. The sector would also support more than 1 million skilled jobs, making it a top-5 UK employer.

The report makes several key recommendations, including measures to improve supply chains and strategic procurement, the skills pipeline and the formation of a think tank to identify future growth sectors.

But, the report also warns failure to take immediate action on the recommendations will have implications for the competitiveness of every industrial sector and the UK economy.

ESCO was chaired by Pond Ventures’ Jamie Urquhart, who said: “This technology is the basis for almost all facets of our lives, from communications to healthcare to transport to education. By working closely together to implement the recommendations we can achieve significant economic growth.”

The UK’s Business and Energy Minister Michael Fallon declared: “This strategy is a welcome analysis of the growth opportunities and challenges facing the sector. Electronic systems underpin many of the world’s economic activities – from education and healthcare to communications and entertainment. This is an accelerating trend and we will continue to see more and more products and services that rely on electronics.

"The strategy heralds a new working partnership between industry and Government towards long-term growth for this vitally important sector."

The report forecass growth in electronic systems for automotive, aerospace, energy and medical vertical sectors, which each have clusters of excellence, allowing the creation of jobs across the UK.

The recommendations include:

Innovation: the ESCO committee will establish ‘Markets of Tomorrow’, a think tank to direct investment into future growth technologies, strategically directing innovation that will help the UK industry stay ahead of the curve.

Supply chain & strategic procurement: the report emphasises the need to establish closer links between the electronic systems community, manufacturers and service providers in the key vertical sectors as well as fostering stronger partnerships at the R&D and technology development stages.

The report especially draws attention to the vertical sectors’ leadership councils as the key starting point for developing these links.

Skills: the report states that critical shortages of high-end skills are hindering growth, and that there is a need to attract more of the brightest young people into careers in the industry.

Emphasis is placed on creating awareness of the sector’s importance and career opportunities, apprenticeships and graduate skills initiatives – such as the UK Electronics Skills Foundation.

The committee is also working with the UK Border Agency’s Migration Advisory Committee to ensure talent is attracted to and remains in the UK; welcomes the recent changes recommended by the Migration Advisory Committee.

Taxation: The report is supportive of changes made by the government, particularly referencing the R&D tax credit and the seed enterprise investment fund initiatives. It recommends yet closer liaison between the industry and government to advise on how future changes to taxation can further advance innovation and create a nurturing environment for innovative UK start ups.

Warren East, CEO of ARM, the world’s leading chip IP company, backed the report, saying: “ARM has demonstrated that UK businesses can achieve global leadership from a UK base. To make sure that we produce ‘more ARMs’ in the future, both business and Government need to drive change. With the great potential that exists here we must ensure we create the right culture and climate in the UK to foster talent for the technology businesses of tomorrow.”

As many as 14 of the world’s top 20 semiconductor companies have established design and/or manufacturing operations in the UK.

The UK is home to the world’s two leading chip IP firms (ARM and Imagination Technologies) and many of the world’s leading research universities. However,
compared to South Korea, which has a similar size, GDP and population, the UK has previously failed to create strong international electronics brands.

The report calls for a long-term strategic approach between government and industry to ensure that the right ecosystem is in place to encourage the investment and entrepreneurship that will trigger the rise of these high-growth enterprises.

Sir Hossein Yassaie of Imagination Technologies commented: “This is a truly enabling industry that underpins so much for every other key sector, has huge potential and offers real business opportunities. It is critically important that the sector gets the importance and the strategic attention it deserves as a top national priority".

“The UK has huge assets in terms of engineering, creative talent and manufacturing capabilities, but we need a long-term and stable strategy agreed between the industry and government that’s driven by both with one voice.”

The UK is a leading player in electronic system innovation for automotive, power generation, aerospace and communications and its electronic systems expertise is vital to many vertical markets with the sector being cited as a significant contributing factor in the resurgence of the UK’s automotive market.

Indro Mukerjee, CEO of Plastic Logic and Chairman of the Semta electronics group and UK Electronics Skills Foundation said: "A crucial element to achieve this growth in the run up to, and also beyond, 2020, is skills. Electronic systems is about everything from semiconductors to embedded software and the UK ES community is exceptionally varied in what it produces   with tens of thousands of firms working actively throughout the supply chain. We therefore need to develop sufficient home grown talent to match skills needs: from manufacturing to embedded software to IP."

The ESCO initiative was led by trade bodies NMI, GAMBICA and Intellect alongside Semta, UKEA and ESP KTN with insight sought from businesses and academia across the sector.

The ESCO Report can be downloaded from https://esco.org.uk/

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