In a groundbreaking study conducted by the Research Institute in Innovation and Entrepreneurship, the Federation of Small Businesses in Wales (FSB) has unveiled a comprehensive report titled "Manufacturing Momentum," shedding light on the current state and future trajectory of the manufacturing sector in Wales.
The report, derived from insights provided by FSB members and manufacturing firms across the region, offers a detailed stocktake of the challenges faced by small and medium-sized enterprises (SMEs) within the sector over the past decade. Notably, the research indicates a concerning trend as small manufacturing firms in Wales experienced a significant 20% reduction between 2010 and 2022. In contrast, larger enterprises witnessed a 15% increase during the same period, showcasing a distinct advantage for companies with the capacity to navigate short-term challenges and align with long-term government policies.
The dynamic landscape of the Welsh manufacturing sector has been influenced by a confluence of factors, including the integration of new technologies, the growing importance of the circular economy concept, and a business environment shaped by the aftermath of Brexit, the ongoing challenges posed by the COVID-19 pandemic, energy price fluctuations, and global political uncertainties. These factors collectively present a complex set of issues for the majority of Welsh manufacturing businesses, which are micro, small, or medium-sized enterprises, encompassing concerns related to supply chains, training and skills, innovation, finance, infrastructure, and sustainability.
A crucial revelation from the research is the existence of a gap between businesses focused on short-term pressures and the imperative need for a long-term vision. Bridging this gap, according to the report, would empower Welsh manufacturing businesses to establish a more resilient foundation, with a key focus on developing skills to prepare for future opportunities.
Addressing this challenge, the report underscores the pivotal role of the Welsh entrepreneurial ecosystem, calling for collaborative efforts from government at all levels, Higher Education institutions, and businesses in Wales. Swansea University, and in particular, the Research Institute in Innovation and Entrepreneurship, have expressed readiness to fully support this crucial agenda.
David Pickernell, Professor of Small Business and Enterprise Development Policy, and Director of the Research Institute in Innovation and Entrepreneurship at the School of Management, emphasised the significance of the research, stating, “This important research for FSB Wales shows that the Welsh manufacturing sector generally, and manufacturing SMEs in Wales in particular, have undergone significant change over the last decade, and will undoubtedly continue to do so over the next ten years."
He added, "It is vital, therefore, that universities play their full part through innovation, knowledge exchange, education, skills and training, as well as research, to support the resilience of this vital part of the Welsh economy as it transitions to more sustainable and circular production systems.”
The "Manufacturing Momentum" report not only serves as a comprehensive analysis of the challenges faced by Welsh manufacturing SMEs but also offers a roadmap for collaborative initiatives that can pave the way for a more resilient and sustainable future for the sector.