As the March 2019 deadline looms, we’re all thinking about, and trying to prepare for, Brexit. Is it going to be doomsday? OR will the effect not be quite as drastic to business as some are predicting?
To try and explore this topic in a little more depth, we’ve been sitting down and speaking with experts from different areas of the automation industry to see what effect they think Brexit is going to have.
First, we spoke to David* – a UK based global head of Business Development for a multinational process automation business. His area of expertise is mainly in large-scale O&G, petrochemical and marine projects.
*Understandably, Brexit’s a pretty thorny topic, so names have been changed, as the opinions of the leaders we’ve been speaking to do not necessarily represent the views of their employers.
The first thing we focused on is what the UK does well at the minute, and David was quick to highlight the value of the UK's design expertise around the world. 'When it comes to refineries, boats or vessels, [designs] tend to come through the UK, or at least Northern Europe: specialist centres and design houses'.
Because this is concerning engineering services and not necessarily equipment, David doesn't see Brexit hurting this traditionally strong area too hard. 'It's more likely to be an inconvenience than a direct hit' because the concern will be the movement of people, not equipment. It might mean longer queues for travellers from the UK to the EU, but that's about it.
According to David, the UK energy market is in decline, and the clients that are still emerging aren't that big. That means a change of approach is needed, and technology needs to be adopted. The UK will need to become state of the art to keep up with the pace of change.
David highlighted floating wind farms as one particular area that the very latest technology is being put to use in the UK, but one area he thinks process automation will have a massive part to play in is decommissioning.
One point to make about decommissioning of oil rigs and other major energy assets is that the business can't go too far away from UK shores, as the rigs themselves are literally based in UK waters.
David mentioned that when it comes to adopting the latest technology in manufacturing like IoT, and Industry 4.0, we're lagging behind the major EU powers, like Germany, whose manufacturing processes are so advanced, they're even outpacing the traditionally much cheaper Eastern manufacturing hubs. He tells a story:
That's a big thing to say.
The UK is the 9th biggest exporter of goods in the world. That means that, in the automation space at least, we need to make sure we get solid trade deals in place so this isn't affected to negatively - however as someone with global exposure and responsibilities, David mentioned that added tariffs and regulations could add up to 20% on top of our current export costs - making UK manufactured items far less competitive on the world's stage, particularly when the market already lags behind in its efficiency.
So, uncertainty waits here, depending on trade deals we're able to strike. One positive could be that this could stimulate UK manufacturing. David mentioned that Brexit will 'drive the technology market in the UK... because we're going to have to do something unique.'
If it's going to be more expensive to export and take longer to move people, David thinks that remote monitoring has a big part to play in the UK's role in the global market if it is to remain competitive.
Technology like VR, for example, can enable technical experts to see the problem first hand, meaning that problems can potentially be addressed in minutes - not days. Another area that David highlighted as potentially huge is augmented reality. He mentioned Hyundai's AR owner's manual, saying that if this mass market technology can be adapted to individual, bespoke systems then that can also further reduce the need for movement of people, cutting response times.
This shift to remote access actually means new skills will be needed, meaning that the industry as a whole may need more training and specialised personnel - potentially creating jobs and driving revenue.
This will also coincide with a shift in skill sets amongst customers, who are less concerned with the technicalities and intricacies of their services, instead being more focused on efficiency and productivity. This means a further reliance on remote services as customers will ultimately be less likely, and motivated, to fix issues themselves.
The main takeaway we had from our conversation with David was that, tariffs, trade deals and politics aside, technology is key to the UK process automation sector under Brexit, and that the work needs to have already started to enable us to keep pace with the rest of the world.
The UK market and economy is strong, but we must make manufacturing cheaper, services more efficient and equip workers with the skill sets that are necessary to take on the challenges of a changing global market.
Do you agree? We'll be covering more areas of the automation sector in coming articles, but would love to hear your input too. Feel free to join in the conversation in the comments.
Responses have been edited for length and clarity.