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Why Wales is a hotspot for manufacturing technology 

manufacturing in Wales

The manufacturing sector in Wales has undergone significant transformation, evolving from its focus on mining in the 19th century to create a diverse range of tech-focused and tech-enabled manufacturing hubs today.  

A number of global corporations have manufacturing facilities in Wales, including Airbus, General Electric, Toyota, Tata Steel and Sony. Increasing capabilities for factory automation, alongside the need to create more sustainable supply chains has seen innovation-focused initiatives across the sector, many created through public-private partnerships. 

In 2021 and again in 2023 the Welsh Government released action plans to continue developing a ‘resilient’ manufacturing in Wales, tackling the skills, technology innovation and collaborations needed to do so. 

Wales Tech Week 

In October, Wales Tech Week brought together 4,000 people to share insights, ideas and opportunities focused on the Welsh tech sector. 

The 2023 event themes were ‘tech for good’, ‘tech for the planet’ and ‘tech for tomorrow’, collectively covering the potential for tech to transform all areas of business and society. 

A number of sessions and speakers discussed the role that tech is playing in creating more sustainable, efficient and productive manufacturing in Wales. 

One panel addressed the need to encourage more STEM graduates into manufacturing to ensure the industry can benefit from tech skills. Speakers from the Advanced Manufacturing Research Centre (AMRC), a University of Sheffield initiative with a branch in Wales, and education initiative STEM Learning highlighted the value of STEM apprenticeships in manufacturing and discussed how to make Welsh manufacturing more inclusive and attractive to graduates. 

A session on “The evolution of the smart factory” shared insights on how manufacturing will change over the next decade, particularly focusing on the challenges and opportunities for SMEs in manufacturing to transform and adapt with new technologies. Another event continued this conversation, discussing how SMEs within manufacturing can compete in a digital world alongside larger, better resourced and technologically advanced companies. 

Businesses were invited to hear how photonics experts at Welsh Universities can support high-value manufacturing challenges, through a session run jointly between global industrial technology manufacturer Excelitas which has two locations in North East Wales and Wrexham University.  

Welsh expertise in electronic device manufacturing also featured in a session aimed at graduates promoting careers in the semiconductor industry. 

“Given Lloyds Bank’s expertise in and support for tech and manufacturing businesses in the UK, it was extremely valuable to send representatives to engage in discussions at Wales Tech Week about what’s next for the industry,” said Steve Harris, national head of tech sector at Lloyds Bank. 

“Manufacturing is an integral part of economic growth in Wales, through job creation, innovation and exports. To ensure that the sector continues to develop, it’s crucial to find solutions and new opportunities which can overcome challenges like skills shortages, decarbonisation and modernising machinery and processes.  

“Wales Tech Week demonstrated how leaders from across manufacturing, tech, education and finance can collaborate on future-proofing the industry.” 

One example of local innovation on display was that of Diamond Centre Wales (DCW) – a business supported by Lloyds Bank – which undertakes the entire jewellery design and manufacturing process in-house with a team of software developers, artists, designers, diamond graders and Goldsmiths. 

The company’s current R&D projects make use of augmented reality, mixed reality, artificial intelligence, nanotechnology and new certification tools including blockchain tokenisation. 

“We believe in investing heavily in R&D that can be used to better the industry and make it more sustainable for the future,” said Kelvin James, managing director, Diamond Centre Wales. 

“We were invited to display our innovations at Wales Tech week along with Wales’ innovators and business pioneers. The range of skills and capabilities of offer is staggering, Wales has a very forward thinking, innovative industry across many sectors and we can see a bright future ahead.” 

Wales’ manufacturing prowess 

Wales has been long established as a manufacturing hub, driving forward new innovation globally and reaching significant milestones, like the world’s first steam train journey at Penydarren Ironworks in 1804. It’s no surprise that the industry featured prominently at Wales Tech Week as the country looks to harness the potential from both its manufacturing legacy and its growing tech sector. 

In many ways, Wales outperforms the rest of the UK for its manufacturing prowess. The UK’s manufacturing output is worth £183bn, of which £11.3bn is from Wales, according to industry body Make UK. 

Around 150,000 people are employed in manufacturing in Wales, and the sector contributes more than 16% to Wales’ national economic output – significantly higher than the UK average of around 9%. 

This puts the nation in a strong position to future-proof the sector, through advances in technology and by supporting collaboration with innovative tech companies. 

Transforming Welsh industry to meet present-day needs and challenges is a key priority for the nation, with a policy document published this year titled ‘A manufacturing future for Wales: our journey to Wales 4.0’. 

Innovation is happening around regional industrial clusters which have developed due to the local presence of global companies, like Airbus in Broughton and Sony‘s electronics manufacturing in Bridgend. 

Wales is becoming a world-leader in researching and manufacturing compound semiconductors – needed to support advances in technology and data processing. Wales is home to a pioneering compound semiconductor cluster, CSconnected, formed around dedicated centres and projects at Cardiff University, in collaboration with semiconductor company IQE and others. 

Not far from Cardiff, Newport is the epicentre of South East Wales’ semiconductor industry, with a number of semiconductor manufacturing facilities, including Newport Wafer Fab, SPTS Technologies and Microsemi. A recently announced £160m investment zone will further grow the semiconductor industry, with the potential to create around 1,600 new jobs in Newport alone. 

Another of the 12 newly announced UK investment zones recognises and supports advanced manufacturing in North East Wales, specifically Wrexham and Flintshire. New or planned manufacturing facilities in the area include global blown fibre manufacturer Emtelle’s specialist unit which opened in 2022, and a £35m expansion to Hydro’s aluminium recycling plant. 

Jason Murphy, operations director at Advanced Manufacturing Research Centre (AMRC) says that investment in technology transformation is essential for Welsh manufacturing to remain competitive. 

He explains: “Productivity in manufacturing in Wales is on a par with the rest of the UK, but lags much of the developed world. The countries that lead the world in manufacturing output and productivity (e.g. Germany, South Korea, USA) are making significant investments in advanced automation and next generation technologies.  

“Despite the importance of the manufacturing sector to the Welsh economy, there is a concern that goods manufactured in Wales will become uncompetitive if businesses fail to adopt transformational technologies.” 

Diamond Centre Wales operates on this principle, harnessing new technologies in order to innovate and remain competitive. It has created a unique security laser system (The Seculuxe Project) that uses its own novel super-lens technology, giving the ability to engrave nano-scale QR codes on any asset. The innovation allows for automated tracking and cataloguing of jewellery, creating a secure audit trail and crime prevention solution that cannot be detected by the human eye, replicated, forged or removed. 

Managing director Kelvin James says that such projects have been enabled through collaborations with UK universities, UKRI’s Knowledge Transfer Partnerships and grants and support from Innovate UK, the Welsh European Funding Office and the Welsh Government. 

The company has also developed its own teaching academy so that it can leverage the support it has received in the past to support other Welsh companies to realise their innovations and development goals. 

“Our R&D has enabled us to stay ahead of the curve and have a competitive edge in our field,” says James. “We are keen on supporting businesses and giving them the opportunity to develop and shine and we will continue to do so through our core business beliefs and our industry changing innovations.” 

Technology transformation 

Manufacturing around the world faces challenges like decarbonisation and rising energy costs, modernising infrastructure and creating resilient supply chains and labour shortages. 

Wales is no exception, and the focus for its manufacturing sector is on meeting these challenges through investment, R&D projects, and collaborations between private companies and the public sector, and between manufacturing, tech and research communities. 

Enhanced data capabilities at manufacturers supports decarbonisation by identifying inefficiencies across industrial processes and supply chains and providing an accurate view of the environmental impact. An emission reduction pilot run by Business Wales as part of its Accelerated Growth Programme put this into action, helping family-run manufacturer TB Davies develop a realistic reduction plan. 

Innovative solutions are also enabling a more circular economy, promoting reuse of materials which would have gone to waste.  

Welsh startups contributing to manufacturing transformation in various ways. Cardiff-based Nightingale AI helps manufacturers innovate faster using AI and data solutions, and Bot-Hive provides a digital marketplace for robotics and automation solutions. 

Other startups and small businesses are themselves undertaking new approaches to manufacturing, including Atherton Bikes which uses 3D printing to efficiently produce titanium mountain bikes, and Tarian Drums, which works with the University of South Wales’ engineering department to manufacture sustainable drums. 

Collaborative projects are bringing together groups of stakeholders to drive innovation in manufacturing, creating new opportunities for tech companies and startups to test ideas and products. 

For example, AMRC’s Jason Murphy highlights a ‘factory of the future’ project between AMRC Cymru and Airbus which uses tools and contributions from Siemens, software company CAD-IT, special purpose machinery provider EBS Automation, sustainability consultancy Small World Consulting and The University of Wales Trinity St David’s. The solution was tested on local Flint-based food business The Pudding Compartment. 

Murphy explains: “Artificial Intelligence will be applied to improve throughput by generating smarter insights from the data that is currently being harnessed. The project also looked at the opportunities for improved supply chain connectivity and integrity through blockchain and also considered cyber security implications.” 

Industry 4.0 in Wales 

It’s clear that Welsh manufacturing is already undergoing significant transformation, and investment in ‘Industry 4.0’ will continue to drive innovation across the sector.  

There’s increasing support for manufacturing innovation in Wales, including initiatives like the Toyota Lean Clusters Programme which promotes the adoption of new processes and practices at manufacturers.  

Investment in new developments and facilities is ramping up, creating new jobs and new opportunities in the region. Electronics company Invertek Drives is due to open a £6.3m R&D facility, alongside a £10m factory expansion, alongside a number of other local Welsh manufacturers which are also expanding their facilities across the country. 

The skills gap is also being addressed to secure Wales’ ability to maintain manufacturing innovation as technology becomes more prevalent across the sector. Work on a new education centre is underway in South Wales, focused on robotics, advanced materials and digital technologies. 

Jonathan Michael, relationship manager for SME business and commercial banking at Lloyds Bank, said: “Wales is continuing its heritage as a world-leader in manufacturing, and we’re seeing innovation and investment across the entire industry. Small local manufacturers are becoming more technology-driven through automation and optimisation while global companies are setting up and expanding their presence in Wales to work on cutting-edge solutions including photonics and compound semiconductors. 

“Strategic partnerships and initiatives addressing skills, sustainability, commercial innovation and support for Welsh manufacturing are ensuring that the nation plays a significant role in creating Industry 4.0.” 

Lloyds Bank’s relationship managers are experienced in the tech sector and are keen to support further growth of this vibrant industry. Please get in touch today to discuss how we might help your business. 

Jonathan Michael is Relationship Manager, SME Business and Commercial Banking at Lloyds Bank  

[email protected] 

Steve Harris is National Head of Tech Sector at Lloyds Bank 

[email protected]

For more information about how Lloyds Bank supports UK tech businesses, click here. 

In partnership with Lloyds Bank.