Diffusing excellence across UK foundries and metal-forming firms

Recent OECD research suggests significant disparities in innovation and productivity exist between the most productive 'frontier firms' and other, more domestically-oriented, 'non-frontier firms'. These disparities can be substantial. Andrews et al. (2015), for example, examine the relative performance of 'global frontier firms' across the OECD and 'non-frontier firms' identifying a 4-5 fold difference in multi-factor productivity and a 10-fold difference in labour productivity. OECD analysis also suggests that labour productivity growth in frontier firms has been significantly more rapid than that non-frontier firms exacerbating productivity differentials. This has been interpreted as suggesting that the "productivity slowdown is not so much a slowing of innovation by the world's most globally advanced firms, but rather a slowing of the pace at which innovations spread through the economy".

Reflecting this widening productivity gap, a key ambition of the Industrial Strategy is to close the gap between the UK's most productive companies and the rest. This fellowship, undertaken in partnership with the two industry lead-bodies, aims to identify those innovations which have led to significant productivity improvements in leading-edge firms, explore the barriers and incentives for diffusing these innovations throughout the sector and develop strategies to promote diffusion.

The Fellowship focuses on two sectors which play a crucial role in supplying metal casting and components into many UK supply chains. The foundry sector includes around 440, primarily small, firms in the UK supplying casting to sectors including automotive and aerospace. The metalforming sector includes around 400 firms supplying forged and pressed components into almost every manufacturing industry. In each case, because of their early position in supply chains, productivity improvements in the sector offer gains both to the competitiveness of the individual businesses but additional benefits through the downstream elements of the supply chains of which they are a part.

This three-year Fellowship would be based in the ERC team at Warwick Business School and Mentors would be Professor Stephen Roper (Warwick), Pam Murrell (CMF) and Geraldine Bolton (CBM). Pam Murrell is the Chief Executive of the Cast Metals Federation (CMF), the trade association for UK foundries and Geraldine Bolton is Chief Executive of the Confederation of British Metalforming (CBM), the trade association for UK manufacturers of fasteners, forgings and pressings.

The project will involve an element of database analysis, semi-structured interviews with firms in each sector; a structured survey to provide representative results from across the sectors; and, as currently envisaged, a series of (6) workshops and demonstrator sessions. Outputs would include bi-annual short and accessible ERC Insight Papers based on each element of the analysis. A series of three research papers are envisaged focussing on: productivity and productivity improving practices; adoption barriers and enablers; and, diffusion mechanisms. Each Insight and Research Paper would be accompanied by a Policy Briefing and blog post and would be actively promoted through social media.

This Fellowship will be based within the Enterprise Research centre and conducted in partnership with industry partners the Cast Metals Federation (CMF), the trade association for UK foundries and the Confederation of British Metal-forming (CBM), the trade association for UK manufacturers of fasteners, forgings and pressings. We will create a small, focused Project Advisory Group, comprising academic and industry partners as well as the ERC Deputy Director for Impact and Engagement which will work with the fellow to develop and deliver impact. ERC has a dedicated Deputy Director for Impact and Engagement who can work closely with the Fellow to develop and deliver the engagement and impact strategy.

In partnership with the industry lead bodies one of the key activities during the first four months of the fellowship will be devoted to developing a collaborative impact and engagement plan. This will develop as the Fellow's understanding of the two sectors is enriched and will involve contributions from the industry lead organisations. Industry partners will arrange working groups during the first month of the fellowship to provide input from groups of firms to help clarify and develop research questions. Similarly, both will facilitate early orientation visits to firms within their sector for the Fellow to help them understand industry pressures and dynamics. The Fellow will also participate in an industry wide forum in Cranfield University (27/28th March) with 80 firms from the Foundry sector to further test and refine research questions and routes to impact. Following the March event an impact and engagement plan will be developed and agreed with both industry partners. This will include a series of measurable KPIs reflecting the Fellow's engagement, influence and impacts.

Priority audiences
We see three priority audiences for this Fellowship which overlap with ERC's existing user groups. The research fellow will be able to draw on ERC's existing networks and partnerships, particularly to address policy and academic audiences. Partnership with industry lead bodies will be critical in addressing business audiences within the sector.
* SME leaders and SME-facing organisations (e.g. FSB, BCC, CBI, EEF) - this project has the potential to understand, and ultimately influence the behaviour and performance of SMEs both in the focal sectors and beyond.
* National and regional policy makers and influencers (e.g. officials at BEIS, Innovate UK, IPO, BBB, CLG, HMT, HMRC, DFE and Cabinet Office) - the ERC team has a strong track record of active soft and formal engagement with this group, which will continue during this project and develop robust research findings and expertise that can inform policy thinking and decisions.
* Academic researchers with an interest in diffusion - this is a topic of increasing academic interest given the productivity slowdown across the advanced economies.

Outputs would include bi-annual short and accessible ERC Insight Papers based on each element of the analysis. A series of four research papers are envisaged focussing on: productivity and productivity improving practices; adoption barriers and enablers; and, diffusion mechanisms. Each Insight and Research Paper would be accompanied by a Policy Briefing and blog post and would be actively promoted through social media. The ERC has an established web site that will be used to publish each of these outputs. In addition, ERC's current Twitter feed has over 1,600 followers, and we have evidence of effective click-through to view web content. We will also make increased use of LinkedIn to reach the professional and business community.