Could Net Zero Products Lead UK out of Manufacturing Decline

The green industry has been a boon to many countries around the world. It has driven innovation and been a catalyst for the reshoring of manufacturing away from the far east to Europe and the Americas. Both the EU and the US have strongly incentivized industry to locate manufacturing facilities for green products in their geographical areas, in the case of the US as a matter of national security. Since Brexit, the UK has seemed lost on the world stage, looking for its own niche. According to a new report by the Institute for Public Policy Research (IPPR), net zero products could offer the country a way to regain its own manufacturing base if the country can utilize the capabilities it already has in green production to drive more investment, which would boost growth, help the country reach net zero, make its economy more resilient and create new jobs country-wide.

The report found that the UK already has a clear competitive edge in green manufacturing, with the experience of making one in three of 143 key products that the researchers judged were needed for a future green economy. It urged the government to use this ‘comparative advantage’ to reverse years of manufacturing decline.

Backed by MakeUK, the organization of UK manufacturers, and the CBI, the new report identifies which growth industries the UK should focus on as part of a “pathfinding strategy” to build new economic and manufacturing strength in a net zero world.

Researchers performed analysis which determined the specific areas of existing UK manufacturing expertise that could be used to act as a launchpad for green industrial growth, as well as those that the UK is well-placed to exploit in future. The research took into account the green products where is not enough domestic or global supply, those products where the UK already has manufacturing advantages, and those to which the UK could most readily pivot. The areas where the report stated the UK already had expertise included products for monitoring, measuring and analysing, which are all crucial for the electricity grid, renewable energy generation and decarbonising industry. The UK is also strong at making electric trains and components, heat pump components, and turbines for geothermal or hydro electricity generation.

Those strengths identified by IPPR are spread widely across Great Britain. The North and the Midlands are particularly well-placed to develop all three of these, while other areas including some coastal districts, the South East and part of Scotland and Wales have potential strengths in one or two.

IPPR also urged policymakers to consider how to retain and rebuild some of the heavy ‘foundational’ industries – including steel – that are essential for the resilience of the UK economy, and are strategically crucial in an increasingly volatile world. It says that over-concentration of manufacturing in China, puts the UK and the world’s green transition at risk.

Dr George Dibb, head of IPPR’s Centre for Economic Justice, said, “The UK faces three generational challenges: to deliver net zero, to level up and reinvigorate our economy, and to become more resilient to future shocks. These challenges have a common solution - seizing the growth opportunities of green manufacturing. Over the past 30 years we have slipped sharply behind our global competitors in the quantity and kinds of things we actually make. That’s bad for jobs, for living standards, for our security – and for our long-term economic strength as a country. Yet UK manufacturers still have a competitive edge in making some of the products vital for a net zero economy, and with the right government support we have the potential to be world-leading in many more. Our report has identified what we should target to develop in the near future; now we need government to adopt a long-term strategy that will lead us along this path.”