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Advanced manufacturing: succeed with speed
The UK government’s Advanced Manufacturing Sector Plan sets the direction. Now manufacturers, funders and policymakers need to turn policy into productivity, investment and scale.
Read time: 7 mins Added: 10/06/26
Speakers from the recent advanced manufacturing event as part of the CBI Industrial Strategy Roadshow discuss the key outputs and the arising opportunities in the sector.
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0:07
Lloyds is really proud of what it's doing to support manufacturers through that transition to net zero, and we've got a number of tools and support services available to help them.
0:17
Whether it be access to green finance initiatives right the way through to collaboration with organisations like the MTC who can help them develop a road map on that journey to net zero which will help them navigate an entry point to take advantage of those growth opportunities.
0:35
I think manufacturers also need to understand that taking advantage of the opportunities to decarbonise their business is not just about meeting compliance.
0:43
This is about opening up new opportunities, decarbonising the factory floor, reducing energy costs and all around just becoming more competitive.
0:54
Well, manufacturers can invest in the talent they need for automation and robotics for example.
0:59
So there is a need for us to think of skills, talent acquisition, retention as an investment, just like we would do for capital equipment investment.
1:08
What's been really interesting is there's the constant focus on AI.
1:11
Everybody is conscious that they need to get AI into the businesses and that manufacturers don't have the skills and have to do it.
1:18
What was really positive was the number of people who contributed to say that there were programmes becoming available, there were apprenticeships becoming available.
1:29
The role partnerships and collaboration can play in the UK manufacturing supply chains for our SMEs is incredibly important.
1:35
I think there's a real opportunity for manufacturers to partner with different organisations, particularly in their region.
1:40
We have a really great example where we've partnered with Birmingham University's to form a student team to give our apprentices real world experience.
1:47
Lloyds is really proud of its partnership here at the MTC.
1:51
We've invested 18 and a half million pounds right the way through to 2029 to support the training and the upskilling of around 6 and a half thousand apprentices, graduates and engineers.
2:01
And we're really proud that the partnership has now just been able to expand that support, not just here in the Midlands, but also now up into the Northeast with the new training centre opening in September this year.
2:16
Helping them think about planning ahead, understanding the impacts on their working capital, understanding what new technology and machinery may help them enter new markets, whether it be in new supply chains in the UK or as an export market overseas.
2:32
So what businesses need is certainty and a long term strategy, which is what the industrial strategy is attempting to do.
2:40
You'll see investment happen when businesses feel that they're able to make a return on that investment.
2:45
So long term stability, that's absolutely what's needed from the government.
Speakers from the recent Advanced Manufacturing event, held as part of the CBI and Lloyds Industrial Strategy Roadshow, discussed how UK manufacturers can create a competitive advantage through faster execution, technology adoption and access to growth capital.
The Sector Plan recognises advanced manufacturing as central to UK economic growth and prosperity. That assessment is well grounded: manufacturing remains one of the UK’s economic anchors, with around 250,000 firms1 supporting approximately 2.5 million jobs2 and accounting for about 8.5% of GDP3. Its wider impact is larger still when supply chains, services and local economies are included, and the sector is also a major source of research, development and export strength.
But at this CBI and Lloyds event which brought together manufacturers, technology leaders and policymakers, one message came through consistently: competitive advantage now belongs to those who execute fastest.
“Strategies matter less than delivery on the ground,” as one participant put it.
The UK has the sector capability, the innovation base and a stronger policy framework. The task now is to convert that into faster technology adoption, more resilient supply chains, better access to growth capital and stronger routes from innovation into production.
Execution is the competitive differentiator
The advanced manufacturing opportunity is substantial, but the window to capitalise on it is narrowing. Global competitors, particularly in China and other advanced economies, are moving quickly on automation, AI deployment and industrial capacity. The UK has recognised the challenge, but translating policy into tangible outcomes for businesses requires clear communication of the support available, close collaboration between public and private sectors, and fast implementation.
The government’s decision to put advanced manufacturing at the heart of the Modern Industrial Strategy is therefore significant. The Advanced Manufacturing Plan brings a £4.5 billion package for the sector to 2030 and is intended to provide longer-term clarity around investment, skills and energy. For businesses making decisions about machinery, digital systems, training and export growth, that clarity matters.
For manufacturers, the practical implication is straightforward: the time to act is now. Businesses that move decisively to adopt technologies, build resilient supply chains and access growth capital will be better placed to gain an edge over the competition.
The good news is that there is no shortage of backing. Government, financial institutions and sector bodies are actively supporting manufacturers that are ready to invest and grow. The challenge is often navigation: knowing which schemes, partners and sources of finance are relevant, and how to combine them into a credible growth plan.
Technology as a competitive imperative
Integrating AI and automation is no longer a future-facing ambition; it is becoming the baseline for competitiveness. UK manufacturing has historically been slower to adopt these technologies than some international peers, and there is a risk that the gap widens if firms do not accelerate implementation.
The businesses that are winning are those using technology to change how they operate, not simply to modernise individual processes. Automation can free skilled workers to focus on higher-value work such as design, problem-solving and customer engagement. AI-driven systems can optimise production, reduce waste and improve quality. Digital integration across supply chains can improve visibility, planning and resilience.
Evidence from the Lloyds Business Barometer suggests that manufacturers already adopting AI are seeing tangible productivity gains. That matters because SMEs rarely have the time or resources to experiment indefinitely. They adopt new technology when the link to improved margins, shorter lead times, higher quality or better customer outcomes is clear.
The barriers remain real. Upfront capital costs, integration complexity, cyber risk, data readiness and skills shortages can all slow adoption. Still, they are surmountable when businesses are supported by the right partners.
Made Smarter, the Manufacturing Technology Centre and Make UK are among the organisations helping manufacturers accelerate transformation and build capability that compounds over time.
Skills, knowledge sharing and local capability
Technology adoption is only one part of the productivity equation. The sector also needs people with the skills to apply new tools, maintain advanced equipment and turn data into better decisions. This is why training capacity, apprenticeships and knowledge sharing should sit alongside finance and policy as core parts of the advanced manufacturing agenda.
Lloyds’ expanded support for the Manufacturing Technology Centre, recently increased to £18.5 million, is designed to help train 6,500 apprentices, graduates and engineers by 2030, including through a new training centre in the North East. That kind of investment matters because advanced manufacturing growth depends on a pipeline of technical talent as much as it depends on plant, machinery and software.
Collaboration is equally important. Supply chains that connect primes, original equipment manufacturers, specialist SMEs, universities and regional innovation hubs can help smaller firms access knowledge, markets and confidence.
SMEs may not have the balance sheets of larger firms, but they often have agility and a pragmatic approach to solving customer problems. When that agility is combined with the market access and technical standards of larger supply chains, innovation can move faster.
Access to capital
A recurring theme at the event was the so-called “valley of death” when scaling: the point at which viable, growing businesses struggle to access finance because they do not fit traditional risk profiles. In advanced manufacturing, this can be acute. Firms may need to invest heavily in specialist machinery, hold costly raw materials, manage long payment cycles or fund working capital before new contracts fully mature.
There are resources designed to de-risk expansion and investment, including British Business Bank funding, UK Export Finance guarantees and the Growth Guarantee Scheme. But there is more to do to raise their profile and help firms understand how they fit together.
At Lloyds, we are seeing manufacturers of all sizes looking to invest in technology, build supply chain resilience and expand capability. Our partnerships with organisations such as Make UK and the Manufacturing Technology Centre put us directly in conversation with businesses about where support will have most impact.
In 2026, we are making over £35 billion of new finance available to companies operating or investing in the UK across all sectors. For manufacturers, the priority is helping firms access the right capital at the right stage of growth, whether that means finance for expansion, working capital for supply chain investment or structured support to navigate technology transformation and defence supply chains.
Where growth is happening
The defence sector is a catalyst for innovation, a platform for scaling and an anchor for sovereign manufacturing strength. For SMEs and mid-sized manufacturers, defence contracts represent a significant growth opportunity, particularly as procurement processes become more accessible and payment cycles improve.
There is also a strong regional dimension. Advanced materials in the Northern Corridor, aerospace and composites in the South West, and specialist steel in South Yorkshire all demonstrate how place-based strengths can create differentiated competitive advantages. Strong local leadership, innovation hubs and access to finance often correlate directly with growth.
Across our customers, we are seeing the reality of how investing in innovation can reap rewards. RMP Products in Walsall is investing £1.2 million in a high-tech plate processing machine to boost productivity and cut lead times for customers including JCB, Caterpillar and Network Rail. Vanguard Foundry in Stourbridge is investing in new equipment to increase capacity, improve quality, reduce waste and support a wider shift towards digitisation and AI. These are not abstract policy ambitions; they are practical examples of manufacturers investing now to compete tomorrow.
Turning backing into business outcomes
It is an important moment for advanced manufacturing in the UK. The Sector Plan provides the framework, government backing is real and capital is available. But the decisive factor will be execution: how quickly businesses can adopt technology, build skills, access finance, strengthen supply chains and turn policy support into commercial outcomes.
Manufacturing’s role in the UK economy is larger than its headline GDP contribution suggests. It supports skilled employment, drives research and development, strengthens exports and anchors regional growth. If the sector can combine its existing strengths with faster delivery, the prize is not just higher productivity for individual firms, but a more resilient, competitive and innovative UK industrial base.
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Any views, opinions or forecasts expressed in this document represent views or opinions of forum participants and are not intended to be, and should not be viewed as advice or a recommendation from Lloyds Bank or any other party.