SMEs have been urged to act as “reverse mentors” to larger businesses struggling to meet technological challenges.
The Confederation of British Industry’s Josh Hardie told the Innovate 2017 conference that collaboration would be “fundamental” to ensuring companies had the skills they needed.
Siemens chief executive Prof Juergen Maier had accepted that companies like his could not do everything in-house, saying: “We absolutely recognise that especially in this new digital revolution, we are not going to be able to create nearly enough IP inside our company. So we are creating mechanisms to better engage with start-ups and SMEs.”
He said the company worked with Innovate’s Digital and High Value Manufacturing Catapults, and with universities, and had set up a new company – Next 47 – to fund companies and connect entrepreneurs in the hope of creating an innovative ecosystem.
Hardie, the CBI’s deputy director general, said the flow of knowledge through supply chains would help all companies to up-skill, upgrade facilities and improve productivity.
“We have so many small and medium-sized scale-up businesses that really understand the technology and that can act almost as reverse mentors for some of those bigger businesses that maybe face challenges,” he said. “But the reverse is also true. We have many medium-sized businesses who are stuck and don’t have the confidence to invest, and their larger business partners who do can help and can mentor them on that journey.”
The pair were speaking as part of a debate on The UK’s Place in the World at the conference, in Birmingham, hosted by the government’s innovation agency.
The event acts as a showcase for the most advanced British technology. Innovate board member and CEO of First Capital bank Hazel Moore, who was chairing the discussion, highlighted the cutting-edge robotics on display outside the conference hall and asked why the UK lagged behind rivals in incorporating this technology.
Hardie said it was alarming that while 50% of businesses in a CBI survey believed automation and AI would fundamentally transform their sector in the coming years, only half of them were investing in the technology.
“That shows the lack of confidence. The will is there but not the skills,” he said.
Maier said government must work with industry to ensure adoption of technology was much easier for SMEs.
“In the north-west of England… there are 130-odd different small business support schemes. Pretty much every one of them is sub-scale and not really achieving what we want to do. The ideal scenario is something much more visible that certainly has some teeth and finance behind it to really support small businesses. And one of the things that needs to support that is a better ecosystem around smart and digital technologies.”
He said SMEs needed demonstrators offering advice and somewhere to explore the potential of robotics.
“With robotics, to many small companies it’s ‘you have to invest half a million, it’s not for me’ without realising that for about £50,000 you can get a pretty smart investment that can increase productivity,” Maier added.
Hardie said the government’s industrial strategy – to be published at the end of the month – was “absolutely critical” to giving businesses confidence to invest. Industry needed a better coordinated skills strategy, a stable tax environment, clarity over Brexit to encourage investment, he said.
“You talk about AI but for a medium-sized business that feels a bit of a risk – what if it becomes obsolete? What if I make the wrong choice? – this is quite a lot of money.”
Innovate 2017 continues at the National Exhibition Centre, Birmingham, until Thursday.