Innovation is the key to maximising return on investment in product development and is vital to the growth of developed economies.
UK manufacturing executives say that their strategic focus going forward is one that is innovation led, supported by attractive UK corporation taxes like the Patent Box according to the latest KPMG global Manufacturing Outlook. The report found that nearly half (48 percent) of UK manufacturers said that their company’s strategic focus is on innovation and that only two per cent felt that UK taxes are a challenge to their business in the next 12 to 24 months.
The survey of manufacturing executives found that, encouragingly, half of the UK respondents said that they plan to spend more than six per cent of revenue on research and development and innovation over the next two years, an increase of 21 per cent from what they spent in the past two years. With innovations like 3D printing changing manufacturing, product development cycles (from concept to commercialisation) have reduced from years down to a few months. Yet 1-5 years is the time horizon for an innovation roadmap for 64 per cent of UK manufacturers.
Stephen Cooper, head of manufacturing sector at KPMG UK said: ‘’UK manufacturers are keenly aware that innovation will be the key to future growth. They also know that timelines are shrinking the lead time from concept to commercialisation is dropping dramatically for those manufacturers hoping to remain competitive in today’s technology-driven business environment The UK has always been viewed as a leading in manufacturing innovation and there are clear signs that this will continue to be the case. Encouraging tax rates, stable markets and growing investment in new technologies and advanced materials –such as graphene – continue to provide competitive advantages for UK Manufacturers.’’
Availability of talent
Engineering talent in the UK is strong, but the availability of talent remains an issue. Respondents of the survey highlighted that by partnering with academic institutions (55 per cent) and investing in internal training and apprenticeship programs (52 per cent) is the way they are addressing their personnel shortage.
Commenting on talent availability in the sector, Cooper said: ‘’The tightening access to talent could limit UK manufacturers’ ability to evolve, grow and adopt new technologies. Whilst there is additional effort being made to increase the number of apprenticeships which can only be good, more must be done to attract young people to become engineers. Ongoing retention within the manufacturing sector is ever more challenging whilst recruitment of other smart and innovative people , is necessary to drive forward the manufacturing models of tomorrow.’’
‘’These are exciting times for the UK, and manufacturing is evolving rapidly,’’ Cooper concludes. ‘’In the automotive industry for example, ‘connected cars’ offers the UK huge opportunity to develop and commercialise new technologies. This type of activity, in turn, will attract new talent, new investment and new technologies to the wider UK manufacturing sector.’’
Innovation, then, is vital to economic growth in developed economies. President Obama recently acknowledged: ‘’We all know that the nation that goes all-in on innovation today will own the global economy tomorrow.’’ But while global innovation spend has reached an all-time high of $647 billion, in a recent McKinsey poll, 94% of the managers surveyed said they were dissatisfied with their company’s innovation performance So does success lie in the quality of innovation, not the quantity?
Maximising return on investment
Product development specialist Cambridge Design Partnership launch ‘Potential Realised’ – a new innovation capability that helps to maximise return on investment in product innovation.
Based on nearly 20 years of experience, helping some of the world’s most innovative companies launch market leading product, Potential Realised sets out five key steps to maximise the value of innovation projects. It achieves this by combining research, design, technology, engineering and manufacturing into a single integrated approach that both optimises product performance and appeal while continually streamlining development and manufacturing costs.
Cambridge Design Partnership is well known for its market leading engineering and design capabilities in the consumer and healthcare sectors, and has recently strengthened its ‘front end’ capability to offer specialist product strategy and consumer insights research linked to first class technology and design base concept development. Speaking about this new capability, Mike Cane, founder of Cambridge Design Partnership, said: ‘’Potential Realised has evolved out of our experience working with major brands and manufacturers around the world. It starts with a rigorous evidence-based front end opportunity and concept optimisation process that we believe is essential, but find is often undervalued – even though it can define market success. It then translates the resulting concepts quickly and efficiently into reliable engineering and cost effective new products through a detailed engineering and design programme.
‘’We believe by methodically optimising product appeal and controlling development and manufacturing costs, return on investment in innovation can be maximised. Importantly we have structured Potential Realised to succeed with both consumer products and regulated medical devices.’’
At the forefront of product innovation
Truly innovative products sell better, demand high margins, create a buzz and generate a platform for success. The report, available as a PDF download by visiting www.cambridge-design.co.uk/potential-realised, offers a summary how clients can benefit from the Cambridge Design Partnership approach.
Cane concluded: ’’At Cambridge Design Partnership we believe we are at the forefront of product innovation now providing both front end and back end innovation capabilities in one integrated process. Our customers will benefit from new products that perform better in the marketplace because they deliver an exemplary user experience and product performance from leading edge technology and design.’’