Two fifths of the output of UK manufacturing can be categorised as “hardtech” with the capability to invigorate the economy. Hardtech is essentially manufacturing plus technology.
Businesses in this sector combine a range of technological skills to design and make products, with manufacturing-related services often a big part of their activity. Hardtech fairly features in the business lexicon – but it should do.
Brandon Medical, a company making high-tech hospital lighting in West Yorkshire, is among many hardtech manufacturers based in the UK. Two of its employees are pictured above in its Leeds factory.
While devising the ideas behind products is vital to what hardtech companies do, they may leave the manufacture of the items to other businesses under outsourcing arrangements, in which case they become categorised as “factory-less goods producers”, a growing part of the manufacturing landscape.
Hardtech companies in general have high productivity and export ratios, are important employers of skilled people and spend more than most businesses on research and development. Government ministers and civil servants should give these businesses greater attention.
UK manufacturing sales came to about £400bn in 2021, of which just under half was exported. Of the total, 60 per cent consists of standard industrial products requiring a modest amount of technological acumen, and which are often sold mainly to domestic customers. Such items include much of UK food production – the biggest manufacturing sector, accounting for about 20 per cent of the total – as well as basic building products, textiles, household furniture and packaging.
Of remaining 40 per cent of manufacturing sales – all of which can be categorised as hardtech – about half includes the so-called “high-tech” industries such as electronics, biotech, telecoms and military equipment. While the high-tech areas of the economy are generally widely recognised by government policymakers and tend to get special attention, the rest of the hardtech sector is often ignored.
Within the hardtech sector are many niche areas including parts of chemicals, industrial and scientific instruments, machines, metal and plastic goods and automotive. The employees of the relevant businesses must be adept at using multiple technologies, often blending several in creating the designs and making the final product.
It’s important not to ignore the factory-less goods producers – typically design-based businesses which know a lot about the intricacies of manufacturing but for many reasons choose to leave production to others, perhaps in low-cost countries, while owning the intellectual property behind the item in question. Once you take on board the FLGP concept, you understand that it is possible to be an excellent manufacturer, while not doing any manufacturing.
Key technologies that many hardtech businesses are good at include materials development, design engineering, high-level electronics, information technology and automation. IT skills and using the internet – as in the interest in the “internet of things” – are vital many of these companies. But they are rarely the main reason for a company’s ability to compete effectively on world markets. Often there is another technology – or set of technologies – which the company excels at but which often falls below the radar screens of policymakers.
This article is based on a talk given by Peter Marsh to the Foundation for Science and Technology in January 2023 at the Royal Society in London. You can listen to the author discussing hardtech manufacturing and its role in boosting the economy in this FST podcast.
