According to a report by Santander and Make UK, the electronics manufacturing sector grew by 4.4 percent and 12.4 percent in 2017 and 2018 respectively. Despite representing less than 5 percent of the UK’s total manufacturing output, the electronics sector still generated £19.4bn in turnover and £8.4bn in gross value added (GVA).
That’s a significant change in fortunes for the UK electronics sector following a period of decline in the early 2000s, when lower-cost manufacturing in Asia seriously threatened the future of the industry. However, now the recovery looks complete, with the sector employing over 300,000 people in more than 12,000 companies across the UK.
What has driven the resurgent UK electronics sector?
The Manufacturing Outlook 2019 Q1 report from Make UK, highlighted that the performance of the electronic sector has benefited from the introduction of new technologies and the move towards further automation. The increase in new technologies can be evidenced by the upturn in UK tech patent applications, which rose by 7.8 percent overall in 2018. That was driven by a 9.9 percent increase in digital communications filings and computer technology filings that surged by an impressive 31.3 percent.
The report also suggested that there were continued opportunities for the UK electronics sector to grow, with four specific areas identified:
- Developing products for an increasing number of new smart devices
- Satisfying export demand from relatively untapped markets - specifically in Asia
- Capitalising on the rise of digital medicines
- The roll-out of 5G across the UK’s main cities
A shortage of skills could jeopardise further growth
Despite widespread optimism about the future of the UK electronics sector, there are concerns that a skills shortage could put a dampener on growth. And that’s not just a problem for the UK. The United States and the European Union are also facing significant shortages of skilled workers in the semiconductor and electronic components industry.
The majority of positions in the semiconductor industry are non-technical support roles that do not require in-demand skill sets. This is due to the rise of services-based output from tech companies. However, despite that shift, there is still a growing need for technically skilled workers, and they are proving to be far more difficult to hire.
What’s the reason behind the skills shortage?
With levels of employment in the UK near record lows, market conditions are undoubtedly playing a part. Add to that the fact that electronics manufacturers now require an increasingly complex range of skills, and it’s perhaps not surprising that there’s a shortage. A recent report by Oxford Economics (pdf) into the EU skilled employment shortage also found that electronics manufacturing jobs pay less than similar positions in other fields, which is luring some of the available talent away.
John Mitchell, CEO of the IPC, the Association Connecting Electronics Industries, called sourcing the talent to meet the industry’s ever-evolving technical needs “some of the most difficult challenges facing the electronics industry in Europe and worldwide”.
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