9th November 2023
When the Shock of the New campaign launched, we referenced a BBC documentary of the same name. Its influence has become the foundation to how this series has evolved, poking into all four corners of the tension and opportunity between innovation and resistance to change.
No matter what corners we poke in or subject we dig into, one thing has routinely made itself known: the power of collaboration. It is central to how we solve our biggest problems. It is central to how we take advantage of our biggest opportunities. It is essential.
But are we as effective as we can be at working together?
Perhaps there is another documentary reference we can use to influence and now conclude this campaign series…
Where to Invade Next is a 2015 documentary film by Michael Moore. In the film, Moore visits several countries and examines aspects of their social policies that he suggests the United States could adopt.
What if we borrowed this concept? What if by understanding what works across other regions, successful approaches can be combined to build a collaboration blueprint for UK manufacturers to call their own.
Creating a collaboration blueprint for the UK manufacturing sector by integrating the best elements and practices from around the world is a complex task, but someone needs to start somewhere, so here goes.
In the previous edition of the Shock of the New, we planted the seed for this idea of combining best practice examples from different organisational or economic concepts and structures. From Mittelstand in Germany and Keiretsu in Japan, to the tech giants in Silicon Valley, there is between them all, several commonalities.
Many of these concepts or structures are associated with a strong focus on long-term planning and stability.
They often involve close collaboration and cooperation between companies within the same network or industry.
Each of these structures or regions has had a significant impact on their respective national or global economies.
These organisational and economic concepts and structures represent different approaches to business organisation and management, each with unique strengths. And a uniqueness that could be tapped into to form a comprehensive collaboration framework for the UK manufacturing sector.
To support growth and competitiveness in the UK manufacturing sector, 12 points of consideration emerge whereby the art of collaboration will impact success. At least that would seem to be the case when reviewing other successful approaches both here and overseas.
Let’s look at those 12 points and determine where we need to develop, improve, or ramp-up our strategies.
Establish a conducive regulatory and policy environment to support manufacturing innovation and collaboration.
Incentivise research and development through tax breaks and grants.
Create long-term industrial plans with clear objectives, such as energy sustainability or digitalisation.
Foster the creation of regional manufacturing clusters similar to Germany’s Mittelstand, where small and medium-sized enterprises (SMEs) cooperate and share resources.
Promote co-location of manufacturers, suppliers, and research institutions in these clusters.
Encourage the development of Keiretsu-like supplier networks, where manufacturers and suppliers have close, long-term relationships, leading to shared goals and knowledge exchange.
Emulate Silicon Valley’s culture of innovation by establishing innovation hubs and technology parks.
Promote collaboration with universities and research institutions for technology transfer.
Learn from Denmark’s Renewable Energy Collaboration to drive sustainability initiatives.
Encourage manufacturers to adopt eco-friendly practices and renewable energy sources.
Develop a high-tech manufacturing ecosystem similar to Singapore’s High-Tech Manufacturing Hub.
Promote the adoption of Industry 4.0 technologies and automation.
Incorporate elements of ODM (Original Design Manufacturer) to encourage collaboration in product design.
Create platforms for open innovation, allowing manufacturers to share and co-develop designs.
Invest in a robust education and training system to equip the workforce with the skills needed for advanced manufacturing.
Promote apprenticeship programmes and vocational training.
PP Control & Automation HR People Partner, Malcolm Condon believes a collective push needs to be made to change perceptions of industry and influence at grassroots level to attract the next generation of talent.
Supporting artwork featured throughout this article is a continuation of the ai generated artwork featured in the Shock of the New campaign. It uses ai prompts to depict emerging markets, technologies, and scenes in different modern art styles – A nod to the inspiration of Robert Hughes’ documentary and book of the same name, along with the recent disruption and adoption of artificial intelligence technologies.
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12-point framework cont.
Engage in international partnerships and trade agreements to expand market access and learn from global best practices.
Promote exports through trade missions and diplomatic channels.
Implement regular performance benchmarking and best practice sharing across manufacturing sectors.
Establish a culture of continuous improvement, similar to the Japanese Kaizen philosophy.
Provide access to affordable financing options for manufacturers, similar to the Chaebol model in South Korea, but without inheriting the controversial issues related to corporate governance and the concentration of power.
Encourage venture capital and private equity investment in the manufacturing sector.
Develop a robust quality assurance and certification system, similar to ISO standards, to build trust and credibility in UK-made products.
The success of any collaboration blueprint will depend on strong leadership, effective public-private partnerships, and a commitment to adapt to changing economic and technological landscapes.
The Mittelstand comprises SMEs, typically defined as companies with fewer than 500 employees. These businesses are often family-owned and operated, emphasising a long-term perspective and continuity over generations.
Family ownership tends to instil a strong sense of responsibility and dedication to the business, fostering a culture of innovation, quality, and long-term thinking.
SMEs in the Mittelstand model tend to locate in specific regions, creating regional clusters. These clusters consist of a network of interconnected companies, suppliers, and service providers in a specific industry or niche. These regional clusters facilitate collaboration, knowledge sharing, and specialisation, leading to increased efficiency and competitiveness.
This laser focus on niche markets or specific product categories allows them to focus on producing high-quality products that meet specific customer demands, leading to a deeper understanding of the market and the ability to respond quickly to changing customer circumstances.
It is important to note the German education system and the strong emphasis it places on vocational training, including apprenticeships. Mittelstand companies actively participate in this system, nurturing a highly skilled and trained workforce.
Naturally, these skilled employees contribute to the innovation and quality for which Mittelstand companies are known. They are also well known for their long-term perspective, often prioritising stability and sustainability over short-term gains. The approach is central to how so many of the businesses are able to weather economic downturns more effectively than most.
Despite their relatively small size, many Mittelstand companies invest heavily in research and development to drive innovation and product improvement. Collaboration with universities, research institutions, or other companies in the same cluster is common. Sharing knowledge and resources builds strong networks. These companies may cooperate on joint projects, innovation, and even marketing, which helps them access larger markets and compete more effectively.
Mittelstand companies tend to finance their growth through retained earnings and long-term investment giving them a high degree of financial prudence, and further enhances their resilience and global competitiveness. Export orientation is a common feature of Mittelstand companies, and they often target high-value markets.
Finally, supportive government policies and institutions provide support for SMEs in the form of grants, loans, and favourable regulatory environments. These policies encourage entrepreneurship, innovation, and investment in the Mittelstand.
Keiretsu supplier networks are a unique and successful business model that originated in Japan. These networks involve close and long-term relationships between a large corporation (usually an original equipment manufacturer or OEM) and its network of suppliers. Keiretsu networks are known for their collaborative and integrated approach, which helps drive the success of both the parent corporation and its suppliers.
The central entity in a Keiretsu is a large corporation, often a well-established manufacturer, that serves as the anchor in the network, coordinating and directing the activities of the suppliers.
First-tier suppliers become the primary suppliers providing essential components and materials to the parent corporation. The parent corporation typically maintains a long-term relationship with these suppliers, often involving equity investments, mutual trust, and shared interests. The second tier supply the tier above with stability, collaboration, and shared goals.
This structure is nothing out of the ordinary for most, so what specifically makes Keiretsu tick? And what key characteristics make it successful?
Keiretsu networks are built on long-term relationships that go beyond typical business partnerships. The parent corporation and suppliers establish trust and mutual understanding over time, which leads to stability and predictability in the supply chain. The stability and loyalty in Keiretsu networks often lead to cost savings. Suppliers are more willing to invest in technology, skills, and innovation when they have a secure, long-term partnership. In many Keiretsu networks, the parent corporation may hold equity stakes in its first-tier suppliers. This shared ownership aligns the interests of all parties, with a financial stake in each other’s success.
Collaboration is a fundamental principle of Keiretsu networks. They work together to make important decisions, such as product development, quality standards, and cost management. To this end, they’ll rely on the sharing of information and knowledge, including the sharing of production schedules, technical specifications, and market insights. The practice of sharing helps suppliers respond effectively to the parent corporation’s needs.
As would be expected in any model originating from Japan, high-quality standards and a commitment to continuous improvement are essential. Suppliers are expected to meet stringent quality requirements, but the parent corporation actively supports them in achieving these standards.
Ultimately, and perhaps a summary of all benefits, Keiretsu networks are designed to reduce supply chain risks. By maintaining close relationships with suppliers and collaborating on production and demand forecasting, the parent corporation can manage risk more effectively.
Silicon Valley in Northern California is renowned for fostering the development of groundbreaking technologies and startups. Its culture of innovation has played a pivotal role in the growth and success of the technology industry in the region. Entrepreneurship is at the heart of the culture.
The region encourages individuals to take calculated risks, pursue innovative ideas, and create their own startups. It perhaps goes without saying, but this approach uniquely has a strong tolerance for failure. Or rather than failure, the entrepreneurial take would be valuable learning experiences, and a step closer to success.
Ideas generally don’t turn into successful businesses without proper financial resources, and Silicon Valley offers access to a vast network of venture capitalists, angel investors, and other sources of capital. This is a significant contributor in the region’s success. As is networking and collaboration.
There is a culture of open sharing of information and ideas, which leads to cross-pollination of knowledge.
The ecosystem of innovation includes everything from startups to established technology companies, engineers, research organisations, and support services such as legal, accounting firms and investors. Networking events, meetups, and incubators/accelerators facilitate interactions between them all. No wonder then that it also attracts top talent from around the world. Leading universities and research institutions, such as Stanford and UC Berkeley, are in close proximity, supplying a steady stream of skilled engineers, scientists, and entrepreneurs. Innovation hubs and incubators like Y Combinator and 500 Startups also provide early-stage businesses with mentorship, resources, and networking opportunities.
Importantly, this ecosystem of diverse disciplines and services enables entrepreneurs to quickly access the resources and expertise needed to grow their businesses.
It is not just diverse from a professional standpoint, but it is also culturally diverse, attracting individuals from different backgrounds and nationalities. This diversity contributes to a wider range of perspectives, ideas, and experiences, which will almost always lead to more creative solutions.
Silicon Valley’s success can be attributed to a combination of historical factors, critical mass of talent, financial resources, a culture of openness, and the ability to adapt to changing market conditions. This unique environment has propelled the region to the forefront of technological innovation and entrepreneurship.
Denmark is known for its strong commitment to renewable energy and sustainability. The country’s success in driving sustainability initiatives is due in part to the Renewable Energy Collaboration model, which involves a combination of government policies, industry collaboration, and technological innovation.
Perhaps the best place to start is with the government’s long-standing commitment. They have set ambitious targets for reducing greenhouse gas emissions and increasing the share of renewable energy in the country’s energy mix. It is a notably more strategic approach, with Denmark’s Energy Agreement, a key component of the Renewable Energy Collaboration, outlining a comprehensive strategy for transitioning to a green and sustainable energy system. This strategy includes clear targets for renewable energy deployment, energy efficiency improvements, and emissions reductions.
Denmark fosters strong partnerships between the public sector, private industry, and research institutions. Collaboration between these stakeholders is vital for driving innovation and sustainability initiatives. It is this such approach that makes Denmark a global leader in wind energy technology, particularly in offshore wind. The country has invested heavily in research, development, and deployment of wind energy projects, making it a global hub for wind energy innovation.
Initiatives like the Energy Technology Development and Demonstration Program provide funding for research and development projects in the field and there is a regulatory framework designed to promote renewable energy production, encourage investment, and ensure a stable market for clean energy technologies. Denmark has implemented market mechanisms, such as feed-in tariffs and green certificates, to incentivise renewable energy production and consumption.
Renewable Energy Collaboration success is driven by clear policy objectives, public support, collaboration, and the country’s global leadership in renewable energy technologies. Denmark’s approach serves as a model for other nations looking to advance sustainability initiatives and transition to a green energy system.
Singapore has established itself as a global leader in high-tech manufacturing through the development of specialised manufacturing hubs and industrial parks. These hubs are highly successful due to a combination of factors, including government support, strategic location, a skilled workforce, and infrastructure.
There are several high-tech hubs of note; Jurong Island is a major petrochemical and chemical manufacturing hub. Tuas Biomedical Park is a dedicated hub for the pharmaceutical and biotechnology industries. Woodlands Wafer Fab Park is a semiconductor manufacturing hub, primarily focused on wafer fabrication. It is part of Singapore’s electronics manufacturing ecosystem, attracting semiconductor companies to set up advanced production facilities.
There is also the Seletar Aerospace Park, a hub for aerospace manufacturing, maintenance, repair, and overhaul (MRO) services. And CleanTech Park which focuses on sustainable technologies and green manufacturing.
The Singaporean government has consistently supported the growth of high-tech manufacturing hubs by providing incentives, infrastructure, and a conducive business environment. Government agencies like the Economic Development Board (EDB) actively promote and attract investments.
Singapore’s strategic location at the crossroads of major shipping routes in Southeast Asia makes it a key gateway for trade and logistics. This geographic advantage enhances the accessibility of raw materials and distribution networks for manufacturing companies. The country boasts world-class infrastructure, including modern ports, airports, road networks, and reliable utilities, which support manufacturing operations. Singapore’s strategic location also provides easy access to the rapidly growing markets of Southeast Asia and beyond.
The government also collaborates with industries to develop skills in line with technological advancements. It drives a vibrant innovation ecosystem with research institutes, universities, and technology parks that collaborate with manufacturing companies to develop and implement cutting-edge technologies. Furthermore, its commitment to protecting intellectual property rights make it an attractive destination for technology-intensive manufacturing industries.
The many benefits to Singapore’s high-tech ecosystem are amplified by the region being consistently ranked as one of the easiest places to do business globally, with a transparent regulatory framework and minimal bureaucracy.
In Taiwan, Original Design Manufacturer (ODM) collaboration approaches involve the partnership between a company that specialises in product design and manufacturing (the ODM) and a brand or client looking to bring a new product to market. These collaborations can be highly successful.
A successful collaboration aligns the goals and vision of both the brand and the ODM. They should share a common understanding of what the product should achieve, its target market, and its unique selling points. Clear communication and managing expectations become vital here. The ODM should bring innovation to the table and provide valuable insights and suggestions for product improvements or customisation. Collaborations that prioritise unique, innovative features have a better chance of success.
As well as clear communication, shared vision, and innovation, successful ODM product design collaborations hinge on IP protection, quality assurance, transparency, and ongoing collaboration to adapt to changing circumstances. By following these approaches, brands and ODMs can achieve successful product launches and maintain productive long-term partnerships.
Perhaps what unlocks real success is the collaboration’s market orientation. Both the brand and the ODM leverage market and consumer insights to guide product development. This approach ensures the product is well-aligned with market demands and consumer preferences. When done properly, a company or collaboration that is market orientated will develop a success profile shared by many of the most profitable businesses in the world: customer-centricity, deep insight, brand integration and rewarding customer-focused innovation – this is the makeup of the so-called ‘success profile’.
The Chaebol model is a business structure commonly found in South Korea, which involves large, family-controlled conglomerates with diverse business interests. Whilst Chaebols have faced criticism for issues related to corporate governance and concentration of power, and there is ongoing debate about its role in the South Korean economy; they have been successful in delivering affordable financing options for manufacturers.
Its success can be attributed to economies of scale, financial synergy, risk mitigation, government support, a global presence, and a long-term commitment to manufacturing operations.
Chaebols can leverage internal financing within the conglomerate. Profitable subsidiaries can provide capital to those in need, reducing the need for external borrowing and interest payments. This internal capital flow helps make financing more affordable. The scale of Chaebol operations allows them to achieve economies of scale, reducing costs in manufacturing and other operations. These cost savings can be reinvested or used to service debt more easily, ultimately lowering the cost of financing.
They’ll have access to bank loans, bonds, equity offerings, and intercompany loans. Their diversified business holdings provide flexibility in choosing the most cost-effective financing options. Due to their strong creditworthiness and close ties to financial institutions, Chaebols can secure loans at more favourable interest rates compared to smaller businesses. Lower interest rates lead to more affordable financing.
Furthermore, Chaebols’ financial arms can issue credit guarantees on behalf of their manufacturing subsidiaries, reducing the risk perceived by lenders. They will also often take a long-term approach to financing and investments, allowing them to undertake capital-intensive manufacturing projects with extended payback periods, which may not be possible for smaller, short-term-focused companies.
At this point, you may be thinking that many of these approaches exist in the UK already; that there are countless examples of excellent supply chain collaboration, R&D partnerships, and industry clusters. And whilst our government’s appreciation for a robust industrial strategy to boost UK performance is lacking, there are very successful funded programmes such as Innovate UK or sector specific initiatives like Agri-EPI Centres.
It is not to say that the UK lacks the understanding or is unaware of the benefits behind strategic collaboration, but rather that the strategy itself is too loose. Perhaps much of the good things we have currently, are operating in silos, with separate agendas.
Perhaps, if we were to play devil’s advocate, we would say that the UK’s efforts are too fragmented. It is alignment of the many initiatives and efforts where we need to make improvements. It would also be fair to say that in comparison to the region’s we’ve analysed here; that investment is limited, we are more risk adverse, there are too many regulatory barriers and cultural or organisational barriers. Perhaps there is a lack of trust between organisations, hindering proper knowledge sharing, and competitive pressures exist that deter businesses from collaborating.
These factors, when combined, can create an environment in which successful collaboration in UK manufacturing is challenging. As a nation, we need to tighten our position on what we’re attempting to achieve through collaboration, and importantly come together to realise the opportunity.
Where to Invade Next by Michael Moore concludes on an optimistic note. In the final scenes of the film, Moore reflects on his journey through various countries, where he “invaded” to learn about their social and political policies. He emphasises the idea that the United States can learn from these other countries and adopt some of their policies and practices to improve quality of life. This concluding campaign story will end with a similar call to action.
As a manufacturing community, what can we do to create a better future? If collaboration is the secret to success, the secret to unlocking emerging market opportunities, to becoming champions of sustainability, key investors in robotics and automation, Greentech, clean energy and mobility, advocates for sustainable consumption and contributing to a circular economy; then what are we waiting for?
A collaboration blueprint has been in front of us all along.
We just need to join the dots.
PP Plus is an easy access support network designed to help create a more sustainable and environmentally friendly future by supporting the growth of technological innovations in the UK.
PP Plus offers three pillars of support (Manufacturing, Business, Academia) that give access to hundreds of capabilities, services, and methods to help fledgling businesses rise through seed investment, to the flourishing market debut of their ground-breaking green technology.
The PP Plus partner network, founded by PP C&A, is a carefully curated collective, selected with discernment and purpose. They share a unique blueprint for better collaboration. Together, they constitute the most accessible growth support network in UK manufacturing, serving as the catalyst for a multiplier effect that unites entire communities in the shared mission of guiding successful innovation.
For more information on how PP Plus is supporting GreenTech innovators, see the brand new website, launched to promote its important mission and the services of its network of over 20 partners.
The Shock of the New campaign comprises of five stories. All can be found in the carousel below.
“The shock of the new” highlights the dynamic relationship between innovation and the human response to change. It acknowledges that whilst change can be challenging, it can also lead to profound advancements and opportunities for societal and sustainable development.
The fourth industrial revolution has a new engine and manufacturing is on the cusp of its most transformative era since the invention of the assembly line.
Recent history has been defined by turbulence and supply chains have become the front line of disruption. These shocks have acted as both a warning and a wake-up call.
At the heart of the green transformation lies a somewhat critical element: skills. Shock of the New reacts to the 2024 Global Green Skills Report.
The Shock of the New campaign returns, as Tony Hague states that if the UK continues to outsource its green technology production overseas, it risks squandering a once-in-a-generation opportunity.
Over 70 pages, collecting every story from the Shock of the New campaign. Includes bonus content and available for instant free download.
What if by understanding what works across other regions, successful approaches can be combined to build a collaboration blueprint for UK manufacturers to call their own.
In an era where environmental concerns are at the forefront of global discourse, the UK manufacturing sector finds itself at a crossroads. To flourish, there is a compelling argument that it must undergo a profound transformation towards sustainability.
The Greentech landscape and opportunity for innovation and investment is driving the sustainability agenda and encompasses a wide range of new technologies.
There are various types of machines and devices that contribute to the circular economy by enabling resource conservation, waste reduction, recycling, and the reuse of materials. The demand increase in these varieties has been more progressive in recent years.
When adopting new technologies and exploring emerging industries, there is often a disruptive element involved. They can challenge established norms, disrupt traditional industries, and require individuals and organisations to adapt to new ways of doing things.
One of the UK’s leading strategic manufacturing specialists is tapping into the UK’s unprecedented investment in upgrading the electricity grid.
As Britain accelerates investment in grid infrastructure, protection and control capacity could become a critical delivery constraint.
The appointment of a new Prime Minister inevitably brings renewed debate about the direction of the UK economy and what it could mean for business.
Ian Knight, Chief Information Officer at PP Control & Automation (PP C&A) challenges the prevailing, often vague narrative around AI adoption and reframes the conversation around a more practical starting point: operational constraints.
Artificial intelligence is no longer a distant concept for manufacturers. It is already being explored across quotation, production planning, engineering, quality, supply chain and customer service functions. Yet, for many organisations, the gap between experimentation and meaningful operational impact remains difficult to close.
A leading aquaculture specialist – that is changing the way fish are vaccinated safely – has signed a major manufacturing deal.
On paper, defined discipline-specific suppliers can look organised. However, every additional supplier introduces another handoff, and every handoff creates another point where time, quality, communication and accountability can be lost.
Very rarely does growth not surface because an OEM lacks ambition. Shortcomings arise because operating models built to support such ambition don’t evolve quickly enough.
