Patricia Hewitt: With support, manufacturing in the UK will go from strength to strength

Manufacturing contributes more than £150bn every year to the UK economy, employs 3.5 million people and accounts for more than half our exports.

Manufacturing contributes more than £150bn every year to the UK economy, employs 3.5 million people and accounts for more than half our exports.

We can be proud of our world-class manufacturers - for instance in aerospace, automotives, pharmaceuticals and biotechnology - all producing sought-after products.

There is no doubt that they are competing in an increasingly globalised and highly competitive economy. In today's marketplace, UK firms will not compete with countries such as China or India on wages alone. But they can stay ahead of the game by using cutting-edge technologies, highly skilled staff and scientific innovation, just like Advantage West Midlands collaboration with the University of Warwick and Ford Motor Company's Premium Automotive Group, who are investing £70m in the creation of a new research centre based at Warwick University which will be responsible for developing and promoting state-of-the-art skills and technology for the UK's automotive industry.

In May 2002, we agreed the first manufacturing strategy for over 30 years. This set out the roles that government, industry and unions each have in helping to build and safeguard a successful, skilled and productive manufacturing base. Two years on, we have published a progress report to show what has been achieved and what remains to be done.

A major success has been the Manufacturing Advisory Service (MAS), which has become a key source of practical advice for manufacturing companies throughout the country, boosting the sector by more than £80m, and delivering more than £100,000 to every manufacturer that goes through the full programme. Since its launch in 2002, it has dealt with more than 36,000 enquiries and visited more than 8,500 firms. In addition, Regional Development Agencies (RDAs) have extended the core range of services MAS provides to boost productivity. For example, in the East Midlands, the East Midlands Development Agency (EMDA) has launched the Innovation Factory as a new feature of MAS aiming to stimulate and enable innovation using a number of techniques developed specifically for SMEs.

The Comprehensive Spending Review delivered an additional £1m a year to the Manufacturing Advisory Service, and to boost manufacturers' use of technology, we announced £320m to help business push ideas from discovery to application. This will be of huge benefit to manufacturing companies and workers by helping the sector make the most of scientific advances to hold their own in the global marketplace.

A prime responsibility of the Regional Development Agencies is to promote the productivity of businesses in their region. To make it even more responsive to local needs, the delivery of Business Link services is being transferred from the Small Business Service to the RDAs next year.

By giving the RDAs greater control of both Business Link and the business support products and services that Business Link provide access to, they'll be better positioned to develop them in a way which is alert to the requirements of local firms.

Building on the success of the three pilot regions, the remaining six RDAs will take over the local management of Business Link delivery from April 2005.

Improved careers advice is being given too: the Connexions-Direct website provides a searchable database (Jobs4U) and has details of more than 600 career options, including many in engineering and manufacturing. Regional Development Agencies now promote manufacturing as a career choice both to young people and to their teachers.

Approximately 4,000 young people have taken the new manufacturing GCSE this summer and a new network of 26 specialist colleges will help train a new generation of engineers. One example of this is the London Development Agency, which - in partnership with Ford - established the Centre for Engineering and Manufacturing Excellence which will support more than 1,000 students. In addition, the East of England Development Agency has helped retrain more than 1,500 Vauxhall employees.

British manufacturing has a good story to tell and there are good jobs that need filling. After a couple of years where output, employment and investment levels were down, there are now signs that the sector is bouncing back. Productivity in the last two years has increased sharply, by almost 5 per cent. A recent manufacturing survey indicates that companies are reporting output and orders rising for the fifth consecutive quarter, with the balance for total orders now at its strongest for over nine years. By continuing to work together, I believe we can continue to boost our international competitiveness and take full advantage of the opportunities the global market offers.

Patricia Hewitt is Secretary of State for the Department of Trade and Industry

The Manufacturing Strategy is available at www.dti.gov.uk/manufacturing