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Business Comment

Dick Olver: 'We're actually really good at innovation. We need to build on that with manufacturing'

We need nothing short of a national re-evaluation of the role and status of engineering

Over the past year I've seen a huge swell of support for manufacturing – and it's incredibly exciting. Politicians and economists are embracing the idea that sustained and sustainable economic growth will be driven by a vibrant, competitive and growing manufacturing sector.

At last we're beginning to dispel the myth that Britain doesn't make anything. For me the facts speak for themselves. With 2.6 million employed in manufacturing in the UK, we remain one of the world's ten largest manufacturing nations and our overall manufacturing output is 56 per cent higher now than it was in 1990.

With due respect to the UK's world-class retail sector, we won't revitalise our global economic competitiveness by opening more shops. The only way our economy will really recover is if our high-value manufacturing and exports are maintained, galvanised and recalibrated. The quickest-acting and highest-octane fuel for growth in any economy is a strong export performance off the back of manufacturing strength.

The most important element of my manufacturing blueprint is putting manufacturing's growth-generating power at the heart of government strategy for economic recovery. This means applying a "growth test" to every major government policy or initiative and asking: "In what way does this contribute to the growth of the nation?"

The other vital strand of government strategy here is an ongoing and sustained commitment from the Foreign and Commonwealth Office to furthering the UK's geopolitical and commercial interests. Every overseas order for innovative, high-value goods manufactured in the UK, whether in the automotive sector, aerospace, security or any other area, requires the reassurance that we are a global player with a real presence in the world. Our foreign policy and British business interests need to work harder and better together to help sustain the UK's influence and global "brand".

It is also clear to me that a strong and sustained rise in manufacturing exports will be achievable only if it is underpinned by world-class productivity, powered by high-value engineering skills and an education system which meets the needs of industry.

The manufacturing industry alone needs an additional 587,000 engineers and technicians by 2017, and this is just to stand still. To meet this demand we really need nothing short of a national re-evaluation and transformation of the role and status of engineering and other science, technology and maths disciplines. The UK requires thousands more young people in well-structured engineering apprenticeships and business-focused degree courses.

The final element of my blueprint is exploiting our nation's strengths. The UK is actually really good at innovation. We're a world leader in technology for Formula One, software, chips for mobile phones, and of course aerospace and defence technology. We're also enormously enabled by the fact that our language is the lingua franca of the modern world. Our legal system provides a very secure foundation for investment and we're also at the centre of a 24-hour global trading system.

I realise that playing to our strengths – and talking about them – is highly contrary to the British culture. But I am absolutely convinced that manufacturing is the key to revitalising our economy. Now is the time to embrace what we have and develop what we need.

Dick Olver is the chairman of BAE Systems