Adapting the manufacturing sector for a brighter future:

new approaches to energy resilience among SMEs

Jim McConalogue and Aaryaman Banerji, March 2023

In this latest Civitas publication, Dr Jim McConologue and Aaryaman Banerji look into energy resilience among SME manufacturers in the UK.

The importance of SMEs within the manufacturing sector and across the UK economy should not be overlooked. There are 244,140 manufacturing businesses across the UK providing just over 2.5 million jobs. 99.5% of those businesses, just under 243,000, are SMEs.

For many businesses across the country, this current period spells the dawn of a new era, whereby energy risks becoming not only too expensive but dependent upon an infrastructure over which they have little control.

It is a particularly pressing threat to the UK’s manufacturing sector, much of which relies on large amounts of consistently supplied energy to power its processes, at an affordable rate. The solution advanced by respondents to this research report suggested a cooled, more adaptable approach: one of ‘net zero realism’ – meaning we can still achieve environmental aims by boosting business and growth plans.

In order to investigate SME manufacturer’s views on costs, energy supply, disruptions and resilience, researchers at Civitas spoke to manufacturers to get their views. These conversations uncovered a series of views on energy security, moving to renewable energy sources and efficiency measures put in place to reduce energy usage.

McConologue and Banerji respond with a ten point plan for supporting the SME manufacturing sector through a period of rising energy costs to help them measure output and secure their supply of energy. Among the recommendations are proposals to provide greater support tailored to SME manufacturers as well as larger tax incentives to encourage investment.