The Hindu Business Line : UK scores high in advanced engineering

s the UK’s advanced engineering industry showcases the “Best of UK” in Bangalore, Pune and Chennai this month, here is a look at why the UK is the best partner of choice for Indian firms.

Mike Connor

The UK advanced engineering sector contributes £160 billion a year in turnover within the automotive, aerospace and engineering industries. This article addresses two myths to show why the UK is the best partner of choice for India.

Myth 1: The UK no longer has an automotive sector worth the name. Wrong! Shortly after I arrived in India a leading representative of the Indian automotive sector told me that it was a pity that the UK’s automotive industry, which produced iconic brands such as Rolls Royce, Jaguar, Land Rover and Bentley, is no longer the force it used to be. I know what he meant, but look at the facts:

Seven of the top 10 global vehicle-makers and 17 of the top 20 auto-parts makers have a UK manufacturing presence; when I was in Prague a few years ago it was the British Ambassador who opened the new Honda showroom, because the cars on sale had been made in the UK!

The UK currently produces more cars than ever before in its history; over the last year car production has increased by nearly 12 per cent.

The UK leads the global motor sport industry with its unique cluster of high-performance engineering firms. Seven of the 11 Formula 1 racing teams in the world are based in the UK. These include Renault, Williams, Honda, McLaren, Red Bull Racing, Super Aguri and, of course, Force India.

There are some 2,200 companies in the motor sport industry; exports are worth £2 billion a year.

The automotive industry as a whole adds £10 billion annually to the UK economy

Productive research

Myth 2: The UK is not a global hub for cutting-edge technology and innovation. Also wrong! The UK has one of the most creative and productive scientific and research communities in the world:

With just 1 per cent of the world’s population, UK scientists claim around 10 per cent of internationally recognised scientific prizes every year.

Many of the most successful innovations over the last 25 years have had key parts made, designed or developed in the UK. Some examples include the Internet, the cell-phone with GSM services, General Packet Radio Service (GPRS) and dual-mode 3G, the first programmable computer, fibre optics and the i-pod.

The UK’s aerospace sector is the second largest in the world, with an annual turnover of £20 billion and R&D investment of £3 billion.

As the sixth largest manufacturing economy in the world, the UK is in the Premier League of global manufacturing. Manufacturing adds £150 billion a year to the UK economy, accounts for around 75 per cent of UK business R&D and generates over 50 per cent of UK exports — a key element is the UK’s advanced engineering sector.

UK-designed and manufactured engines are in service with over 600 airlines in the world; additionally, the space sector contributes around £7 billion to the UK economy.

I am delighted that five UK institutions work with the Indian Institute of Science in Bangalore to develop cutting-edge technologies. These include technologies for unmanned air-vehicles and micro-satellites, new high-temperature shape-memory alloys, new semiconductor nanotechnology and new ultra-thin coatings.

Unlike many other countries, the UK welcomes and encourages foreign investment. Even before Tata’s acquisition of Jaguar Land Rover, Tata Steel had bought Corus. Lord Digby Jones, the UK’s Minister for Trade and Investment has said: “We don’t mind who owns companies in the UK so long as they contribute to the British economy”.

This open attitude of the British government was reflected by Mr Ratan Tata, who said: “We had not met any British politicians in the UK before we decided to bid for Corus”. Mr Tata went on to add that when it comes to private enterprise, the environment in the UK is entirely different from many other countries, as there is no interference from the government on M&A deals.

Shortly after the Tata-JLR deal was announced, I was involved in a group discussion about the international nature of the automotive industry.

Someone made what was intended to be a disparaging comment about the fact that much of the UK’s automotive industry is foreign-owned. Yes it is, and I cannot think of a more fitting tribute to the UK’s open economy!

Leveraging skills

The world’s biggest auto-makers use UK know-how to produce in the UK using the UK’s skilled workforce and export out of the UK to global markets.

A tribute to the UK’s enabling environment for business to make its own decisions about where to invest and create jobs, where and how to deploy capital, as long as those decisions are good for the UK economy and generate long-term productive employment.

Let us not forget that UK firms in this sector are major overseas investors, increasingly so in India. Hampson’s factory in Bangalore makes turbochargers. Caparo’s factory near Chennai makes automotive components.

GKN’s operation on the outskirts of Chennai makes drive-shafts for vehicles. UK firms involved in events in India this month are also significant investors.

For example, Delcam, the largest developer of product design and manufacturing software in the UK started in India in the year 2000 with just three staff; today it has operations in 17 centres across India.

Renishaw, UK, a world leader in high-precision measurement, is another significant investor in India and, earlier this year, opened its new demonstration and training centre in Pune.

Increasingly, UK and Indian engineering firms are working together, as the Tata Nano shows: Caparo is due to manufacture the body-structure and GKN the driveline. I cannot think of a better symbol in India of UK advanced engineering excellence!

UK Trade & Investment (UKTI) will host three events across India — in Bangalore, Pune and Chennai — from May 19 to 23, 2008 to encourage collaboration in the advanced engineering sector.

Indian firms interested in meeting the UK teams, please log on to www.ukae2008.com

(The author is British Deputy High Commissioner in Southern India.)

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