Most Admired Unilever at the vanguard of UK's 'unsung' manufacturing heroes

The CBI says manufacturers can spearhead the UK economic recovery - with a bit more Government support.

by James Taylor
Last Updated: 19 Aug 2013
This year, consumer goods giant Unilever was named as Britain's Most Admired Company in MT's annual awards, the first time it has ever won the top prize. So does this signify a sea change within UK plc? Whereas a few years ago, retail and financial services giants ruled the roost, the last two years' BMAC lists have been topped by companies who actually make stuff and sell it (Diageo having won the year before). With the Government determined to rebalance the UK economy, these could be good times for UK manufacturers. Indeed, the CBI reckons they can power the UK's economic recovery - but only if they get a bit more help...

The CBI has just launched its manifesto for the promotion of Britain's manufacturing sector, which it says is 'in many ways the unsung hero of our economy'. The 'unsung’ bit is clear enough: the popular perception is that UK manufacturing has rather withered on the vine in the last ten years, while the economy has become increasingly weighted towards services (it now makes up around a fifth of GDP). But the CBI also points out that since 1997, the sector has improved productivity by no less than 50%, twice the rate of the economy as a whole. What's more, it now accounts for almost half of all the UK's exports, and three-quarters of our R&D - two areas the Government is desperate to push.

So what next? Well, the CBI reckons manufacturers need to focus on three areas. One, trying to maintain productivity growth of 5% every year (although we're boosting productivity faster than our European rivals, we're still lagging behind the likes of the US and South Korea). Two, getting better at innovation, particularly in new markets like low-carbon. And three, boosting the growth rate for UK exports – in the last ten years, we've had the worst growth rate in the OECD, and we need to double it (to 8%) just to hit the average.

The trouble is, according to the CBI, the Coalition's current measures don't go far enough. So it also wants the Government to promote greater investment via lower taxes, lighter regulation and simplified capital allowances; to encourage 'innovation in management and capability building', learning from competitors overseas; to focus its own spending and support on potentially high-growth areas like health and low-carbon; to do a better job of promoting UK exporters overseas; and to build more links between Government, industry and academia to improve R&D.

Unilever's victory in this year's Most Admired awards is due recognition of many factors: the quality of its employee development, its ability to attract and retain top talent, its commitment to sustainability, and its new-found organisational agility (a legacy of ex-boss Patrick Cescau) – while it's also been boosting margins and focusing on high-growth markets like personal care. If more UK manufacturers can follow suit, this until-recently-unfashionable sector may yet lead us back into the sunlit economic uplands.

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