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Support SMEs by Supporting Startups

Since the Made Smarter report was published in 2017 1, there has been a concerted push from both Government and industry to increase the adoption of industrial digital technologies (IDTs) by the 98.5% of UK manufacturers that are SMEs 2. Before this, the early adopters of IDTs had been large manufacturers (with over 250 staff members) with the resources and capacity to trial new and expensive technologies, to little or no risk to the company. So when the next wave of middle adopters (that have typically been medium-sized manufacturers; 50-250 staff) started to express an interest in adopting Industry 4.0 in the factories, they found that the available technologies were largely unsuitable as they had been developed for the significantly larger early adopters, with little consideration for themselves and other SMEs.

This is a problem, as SMEs as a group have very little in common with large blue-chip manufacturers. They typically have less working capital, less available time, and fewer technical staff available to set-up and utilise new technologies; meaning that technologies that requires months of integration, and weeks of training are unlikely to be adopted, no matter how much they can benefit a business. Employees of SMEs (in particular small and micro manufacturers which make up 91.5% of all manufacturers) typically work to capacity, with little or no time available to perform anything other than their central job roles. So whilst a large manufacturer may be able to trial a technology for several months with a team of engineers, SMEs will only be able to implement a technology once they are sure that it will bring a benefit to their business, without disrupting their production. Technologies for SMEs must therefore be particularly attentive to reducing disruption; by being quick to install or setup, and requiring little or no training where possible. Put simply, IDTs should be plug and play, easy to use, and configurable to manufacturers of all sizes.

An arguable criticism of the current strategy has been to focus on the SME manufacturers as a problem to be fixed, rather than looking at the technology providers and the solutions they offer. We cannot expect SMEs to adopt technologies that are not suitable for them. Instead we should be challenging tech providers to develop more ‘adoptable’ solutions for SMEs, rather than just focusing on getting SMEs to adopt what is available.

An example of this is the current approach to bridging the skills gap. This gap could be approached in three different ways: by upskilling the workforce, simplifying the technology, or by doing both. Surprisingly, the current single-pronged approach within Industry 4.0 has been solely to upskill workers to use complicate technologies, whereas no real push has been made to encourage technology providers to make their technologies easy to install and use.

Much of the UK population already interact with consumer technologies; 87% of UK households access the internet daily 3, and most of the population own a smartphone (88%), laptop (78%) and tablet (65%) 4. So, if people are successfully using technologies away from their workplace, then why is there such a need for upskilling at work? Put simply, it’s because most Industry 4.0 technologies are overly and unnecessarily complicated.

As so many people are comfortable using smart devices and simple internet-based software, we should therefore be looking for solutions that utilise them wherever possible. These are technologies that are already plug-and-play, intuitive and configurable to manufacturers of all sizes, so can bring digitisation to a factory environment without the scare-factor that often comes with new and complicated devices and systems.

Unfortunately however, there is currently a lack of products that follow these principles, and instead provide solutions consisting of bespoke hardware requiring expert installation, and complex software that is clunky to use. There therefore needs to be work done to increase the number of IDTs that can be adopted by SMEs; technologies that are plug-and-play, intuitive and configurable. This is going to become even more pertinent when the next wave of late adopters, that will likely be small and micro manufacturers, begin to explore the possibilities of Industry 4.0 in the coming years.

Part of the problem is that it’s the default for new Industry 4.0 start-ups to target the glamorously large automotive and aerospace giants; with few of them even considered the surprisingly large, albeit arguably less glamorous market of SMEs. There therefore needs to be incentives to steer technology providers towards developing SME-friendly products. The simplest, and most attractive way to do this is to provide early-stage funding, and a robust support network. Furthermore, if these start-ups were located close to a centre of excellence such as the Advanced Manufacturing Research Centre (AMRC), a package of support and access to SMEs could be provided to help tech providers to hone their offering. For example, just £2m could provide eight technology start-ups with a year’s funding to develop and launch a product for SMEs; and if they were clustered in or around Sheffield City Region they could be provided with a package of support and contacts from the AMRC, Sheffield Digital, local universities, and even local manufacturers. This would be a neat way to create a small collection of solution providers, that could then flourish into an eco-system of novel IDT providers with SMEs as their focus.

If you want to SMEs to adopt technology, you must ensure that there are the appropriate technologies available for them to adopt. To support SMEs, you must support start-ups.

1 Made Smarter Report (2017), Juergen Maier.

2 Business Population Estimates (2019), Office for National Statistics.

3 Internet Access – Households and Individuals, Great Britain (2019) Office for National Statistics.

4 Deloitte Global Mobile Consumer Survey (2019) Deloitte

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