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The pharmaceutical industry is the biggest sector investor in Research and Development (R&D) in the UK accounting for around 24% of total investment by business, valued at £3.2bn. The industry is a key partner in achieving the plans for increased R&D investment set out in the Government's 10 Year Science & Innovation Investment Framework 2005-2015 to increase R&D's share of GDP from 1.9 to 2.5% by 2015.
The UK industry has discovered and developed more leading medicines than any other country apart from the USA, and as much as the rest of Europe combined. Around one in five of the world's current 100 best-selling drugs were discovered and developed in Britain. In 2005, 18% of the world's top 100 prescription medicines originated in the UK.
In world terms, the UK industry has 9% of pharmaceutical R&D expenditure: only the USA (49%) and Japan (15%) are ahead. The UK is the largest European recipient of pharma R&D, accounting for 23% of total; followed by France (20%), Germany (19%), and Switzerland (11%).
The Industry accounts for around 0.6% of UK GDP, and the UK is one of the world's largest exporters of pharmaceuticals by value. Industry exports in 2015 were £12.2 billion and created a trade surplus of £3.4 billion. UK domestic market accounts for 4% of world consumption. Larger markets are USA (43%), Japan (12%), Germany (5%), and France (5%).
The UK is regarded as an excellent business & R&D base by global pharma companies such as Pfizer, Lilly, Merck, Novartis, Sanofi Aventis and Astellas which have invested substantially in discovery, development and manufacturing operations. The companies are supported by the trade association, the Association of the British Pharmaceutical Industry (ABPI).
UK companies GlaxoSmithKline & AstraZeneca both have achieved significant global success as creators of wealth and providers of health through exploitation of the UK science base.
In the UK, the industry employs around 73,000 people with about 27,000 in research & development and generates another 250,000 jobs in related industries. The major clusters for the pharmaceutical industry are found in the North East, North West, South East and East of England. There is also a significant research presence in Scotland.
The Pharmaceutical Industry Competitiveness Task Force (PICTF) brought together Government ministers and senior pharmaceutical industry figures and reported in 2005 to the Prime Minister on further steps to be taken to strengthen the competitiveness of the UK business environment for the pharmaceutical industry. A high-level government industry forum, Ministerial Industry Strategy Group (MISG) is developing a long-term leadership strategy to build on the UK's success, and address barriers to growth. This is being done through workstreams: developing partnerships between industry and the National Health Service (NHS); improving the business and technology environment for the pharmaceutical industry in Europe.
The UK is active in seeking to improve Europe's competitiveness for pharmaceutical investment vis-a-vis the US and other countries.
Although competition for investment is increasing, the UK remains a very attractive location for R&D because of the recognised quality of the science base, the availability of high quality staff and the ease of doing business, good communications, market stability, and good dialogue with government.
The sector is also a key collaborator with universities to exploit the science base, and offers about 400 PhD studentships.
Scan the next article for the answer to the following questions:
1. What areas are automotive businesses leaders?
2. What distinct parts does this sector have?
3. How many jobs does automotive manufacturing provide?
4. What is the contribution of automotive industry to the UK economy?
5. How many billions is the industry investing in new plant and technology annually?
6. Why are the world’s major automotive companies attracted to the UK?
7. Why hasn’t competitors of Britain’s automotive industry now?
8. How many firms does this sector include?
9. What producers does the list of the world’s top 20 suppliers contain?
10. What components does automotive industry produce?
11. Why is UK also a centre for design engineering?
The automotive unit uses its unique knowledge of the sector, materials, companies, technologies and the regulatory framework to ensure the UK is best placed to benefit from the challenges of globalisation and help the UK Automotive Industry succeed.
Automotive businesses are leaders in many areas of manufacturing, purchasing, product development and logistics. Major inward investors have brought with them world best practice and the skills and knowledge of the industry provide a key source for improvement across the UK manufacturing sector as a whole.
The sector has two distinct parts: the manufacture of vehicles and components; and the motor trade (including retail, distribution and aftermarket services).
In the case of manufacturing, Britain leads Europe as the most diverse and productive vehicle manufacturing location and as a global centre of excellence for engine development and production.
More than 40 companies manufacture vehicles in the UK – ranging from global volume car makers, van, truck and bus builders, to special vocation players. The industry is supported by a dynamic supply chain including many of the world’s major component manufacturers, technology providers, design and engineering consultancies; and it benefits from a world-renowned knowledge base.
No other European country has anything like this range and number of automotive players. The industry in the UK is characterised by significant foreign direct investment and high exports, equivalent to 13% of the UK’s exports of goods. Overall, automotive manufacturing provides 180,000 jobs and contributes some £10.2 billion value-added to the UK economy (6.4% of the total for the whole UK manufacturing sector). The companies based in the UK operate in Europe’s third biggest automotive market with UK customers in 2008 accounting for the purchase of more than 2.1 million new cars – equivalent to 14% of European vehicle registrations.
Moreover, the UK offers a highly sophisticated retail and service maintenance sector, which last year generated some £24 billion value added to the UK economy. It comprises some 67,000 businesses employing 552,000 people.
The automotive industry is at the forefront of process improvement – setting standards for other sectors, such as aerospace – and is characterised by economies of scale and low unit costs, despite the increasing complexity of its products. In 2015, 1.45 million cars and 203,000 commercial vehicles were produced in the UK. Of these, more than 78% of the cars and 62% of the commercial vehicles were exported.
The UK accounts for some 2.4% of worldwide vehicle output and 8.7% of European assembly, ranking it fourth in Europe and twelfth globally.
There are around 2,600 component manufacturers in the UK, ranging from the global players to small and medium-sized businesses. Together they contribute £4.7 billion added value and employ around 106,000 people. The components sector exports over £5 billion worth of goods annually, 75% destined for Europe. The UK is also an increasing force in powertrain design and production (the components making up the power transmission system of a motor vehicle from engine to final drive), with a particular strength in engines.
There is a long-established, independent, design engineering sector offering the full spectrum of services from concept design through to limited-series vehicle production. The sector is recognised internationally for its flexibility and responsiveness and for the innovative qualities of its engineers. It continues to evolve and the last five years have witnessed a succession of acquisitions, closures and re-emergences in response to the changing demands of its global market.
The UK is also strongly influential in vehicle styling, with many British designers and graduates from British institutions directly employed by vehicle manufacturers around the globe. As a direct result of this expertise, Nissan recently moved its design studio from Germany to London.
This strong combination of tradition and changes the automotive industry in the UK in excellent shape to face the continuous pressures for change in the 21st Century. The principal challenge is for the UK’s automotive manufacturing industry to support its technology, product and business performance to deliver customer value in a global industry subject to relentless cost-cutting pressures.
Additionally, industry analysts expect South East Asian manufacturers to dramatically increase their global market share. But with the UK’s close focus on efficiency, productivity, innovation and value-added manufacturing and its cross-section of international manufacturers, the industry is well placed to face these challenges with confidence.
The UK automotive manufacturing industry is truly dynamic, accounting for 0.8% of GDP. The world’s major automotive companies are attracted to the UK by an unrivalled combination of engineering excellence, a skilled and flexible workforce and a government that strives to create an excellent business environment for companies to prosper – whether domestic or with foreign parents.
One of the great strengths of the UK automotive industry is a deep understanding of globalisation and an ability to continuously evolve and create new opportunities in the face of change. Over the last 20 years there has been a revolution in the way vehicles are manufactured, with a streamlining of production processes, elimination of waste and focus on quality, cost and delivery. It can be said that the automotive industry in the UK now rivals that in any country in the world for its combined efficiency, quality and unit cost.
Overall, the sector includes some 3,300 firms. The majority of vehicle manufacturers and first-tier component suppliers are overseas owned, all treated equally by the Government. Seven of these are volume car manufacturers with a number of truck, van and bus companies, supported by 19 of the world’s top 20 suppliers. The list includes, for example, BMW (MINI), Ford light commercial vehicles and engines, GM (Vauxhall), Honda, Jaguar and Land Rover, Nissan and Toyota. Suppliers include Aisin, Bosch, Calsonic, Dana, Delphi, Denso, GKN, Johnson Matthey, Pilkington, Siemens VDO and many more.
In addition, there are a number of manufacturers producing high value and luxury vehicles serving niche markets, including Aston Martin, BMW (Rolls-Royce), Caterham, Connaught, Gibbs, McLaren and Mercedes-Benz (Mercedes-McLaren SLR), Morgan, Proton (Lotus), TVR, and VW (Bentley).
There are also major companies of the construction equipment, heavy plant and off-road sectors such as Caterpillar, CNH, JCB, Komatsu and Terex, all manufacturing in the UK.
The UK has three sites producing light and medium vans. IBC Vehicles in Luton builds Vauxhall/Opel, Renault and Nissan badged vehicles, the Ford plant in Southampton manufactures Transit vans and LDV in Birmingham produces the Maxus van range.
The UK’s sole volume truck builder is Leyland Trucks, a wholly owned subsidiary of the PACCAR group of the US. The Leyland facility is one of Europe’s largest and most advanced plants and has won many industry awards for its efficient performance. It builds trucks under the DAF brand. From 2008 all DAF trucks on UK roads will have been built at Leyland.
Overall the industry is currently investing over £1 billion annually in new plant and technology, equivalent to 13% of gross value-added.
The UK is also a centre for design engineering (проектування) where around 7,500 people are employed, generating a turnover of some £650 million, with around 65% exported. The UK is home to the dedicated facilities of vehicle manufacturers, such as those at Ford’s engineering centres at Dunton, Gaydon and Whitley, and Nissan’s R&D centre at Cranfield. In addition renowned names such as Lotus Engineering, MAHLE, MEL, Millbrook, MIRA, Perkins, Pi Technology, Prodrive, Ricardo, RLE, Roush, TRW Conekt, TWI and Zytek are also active in the UK. Many of these have other overseas operations, located everywhere from mainland Europe to the US, Japan and China.
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