Policy Flashcards
Why is manufacturing important for policy makers?
- No country, other than financial havens and oil states, has achieved high and sustainable standards of living without development of a significant manufacturing sector
- Multiplier effect: for every job in manufacturing there is a complementary one in another business area.
- Jobs
- Innovation: responsible for 70% of R&D
- Rebalancing the trade deficit
What makes manufacturing complex from a policy perspective?
- Manufacturing and services: traditional strict distinctions are less relevant.
- Limitations of statistics: poor level of detail, no standard method of classification, modern industries difficult to characterise.
- Supply chain complexity: intemediary producers will fit into many supply chains
What are the drivers of change in the industrial landscape?
Megatrends:
- digitalisation:
- increased connectivity and integration of manufacturing systems, interfirm systems and integration across product lifecycle
- digital links between design and production
- connected factory and supply chain
- data analysed over product lifecycle
- greater efficiency and productivity
- accelerating product lifecycles
- globalisation: e.g. iPhone
- demographic change
- loss of key skills, increased welfare and healthcare needs
- changing consumer habits:
- individualism and luxury markets
- customisation
- threat to global security
- e.g. natural disasters or economic shocks
- urbanisation: mobility and housing
- sustainability
- resource limitations
- waste, recycling and symbiosis
Megatrends are changing the drivers of competitiveness including:
- efficiency
- quality
- price
- flexibility
- speed of response
- reduction in defects
- reduction in downtime
- speed of NPI
What is the ‘smile curve’?
- A curve plotting value added associated with various segments of an industry’s value chain.
- Presented as evidence of where more valuable activities are and more attractive policy targets
Some sectors frown:
- for semiconductors and petrochemicals, production and processing account for the highest value added.
- The same is true for a range of other industries which depend on complex manufacturing processes and precision engineering.
What are the different sources of value capture?
Product innovation: speed of new technology development
Process innovation: product mix, flexibility and factory productivity
Supply chain capability: reconfigurable supply capabilities
Product/service delivery: superier understanding and response to customer needs
Give examples of sources of value capture in regards to digitalisation of manufacturing?
Product innovation
- Smart products: new data services, mass customisation
Process innovation
- Smart processes: reduced process variability, better planning and forecasting
Supply chain innovation
- Smart supply chain: improved traceability, virtual supply chains
Product/Service delivery
- Smart design and delivery: new business platforms, better understanding of demand
What is industrial policy?
The industrial policy of a country is its official strategy effort to encourage the development and growth of part or all of manufacturing or other sectors.
The government takes measures aimed at improving the competitiveness and capabilities of domestic firms and promoting structural transformation.
What are the characteristics of an industrial policy?
-
Selectivity
- vertical: deliberately target certain sectors/firms
- horizontal: all firms and sectors are equal
-
Diversity of industrial activities
- can cover other industries aside from manufacturing
What policies and instruments can governments use for industrial and scientific, technology and innovation policy?
Economic industrial policy
Economic instruments
- import tariffs/export subsidies
- tax credits
- investment/training grants
- interest rate subsidies
Public goods
- procurement policy
- export market info
- training institutes
- development bank
- incubators
Scientific, technology and innovation policy
- block funding
- cluster policy
- funding for R&D
- competitive research grants
- fiscal measures
- studentships and fellowships
- science and innovation councils
etc.
What is scientific, innovation and technology policy?
Innovation policy is the set of specific public intervention aimed at addressing concrete problems in the innovation system.
The identification of these problems requires the targeted and specific analysis of the determinants of innovation processes, based on relevant and specific indicators.
Why is a systems perspective important when understanding innovation systems?
- firms rarely innovate in isolation
- important to interact with a range of organisations (universities, suppliers etc.)
- organisation behaviour shaped by ‘institutions’ (rules, laws, routines etc.)
What are the functions of national innovation systems?
Overall function: to diffuse, develop and use innovations
-
Knowledge generation: basic and applied research & development activities
- Examples: TRLs: feasibility, development, demonstration, deployment.
- Knowledge diffusion: development of network linkages, system-wide intelligence , roadmapping / foresight
- Knowledge deployment: capability development activities to help firms access new technological knowledge
What are the national policy concerns for UK manufacturing?
- supply chains need to be able to respond to changes in technology
- hollowing out of supply chains across sectors
- Gaps in support for commercialisation of innovation
- Lack of investment in technical education
- Brexit
- Regional disparity
What are the grand challenges in the UK’s industrial strategy?
- AI and data economy
- Future of mobility
- faraday battery challenge
- extreme robotics
- Clean growth
- transforming construction and food
- Ageing society
- medicines manufacturing
What is ‘made smarter’ uk approach to 4th industrial revolution?
A focus on digital technologies used throughout the industrial value chain to increase productivity, growth and jobs.
- Adoption of IDTs across supply chain (deployment)
- Faster domestic innovation in IDTs (generation and diffusion)
What is the role of an research and technology organisation?
RTOs occupy the intermediate space between:
- the exploratory universities and science and engineering research endeavours of universties
- and the more proprietary innovation activities of firms.
RTOs are organisations linking public and private innovation efforts
