UK manufacturing is no longer defined by nuts, bolts and production lines; AI algorithms, virtual simulations and fully autonomous factories are becoming integrated into daily processes.
As global pressures mount and competitive edges narrow, British manufacturers are leaning into a digital-first future by adopting advanced technologies; not just to stay abreast of technological modernity, but to become global leaders.
Sector heads at Lloyds David Atkinson and Steve Harris, spoke exclusively to UKTN about key manufacturing technologies, trends and challenges and how the bank is supporting UK businesses in the sector through awareness and growing investment.
Power of insight
Predictive maintenance, powered by AI, is becoming a foundational technology in smart factories. By analysing data from machine sensors in real time, AI systems can forecast when equipment is likely to fail, cutting down on unplanned downtime. It is a powerful shift from reactive to proactive operations and is redefining productivity metrics across the board, according to Atkinson.
Together with AI is the industrial internet of things, also known as ‘IIoT’. This involves an ecosystem of sensors, devices and applications that are embedded in machines to stream real-time data to cloud platforms, enabling intelligent decision-making on everything from energy usage to production quality. This results in hyper-efficient operations with tighter control over cost, waste and output.
“There are a lot of initiatives that can help to support select UK manufacturers who only have access to simple technology obtain the same high-quality technical insight using real-time data,” Atkinson explained. “This could be something simple such as using small low cost data collection devices to yield results on a specific production run.”
The new workforce
Advanced robotics and automation are stepping in where skilled labour shortages persist. From collaborative robots – also known as ‘cobots’ – to full-scale ‘lights out’ manufacturing where facilities run autonomously without continuous human oversight, UK factories are reconfiguring their processes to scale faster, reduce error and lower costs. These are not assembly-line bots; they are smart, adaptive systems designed to augment human skill, not replace it.
“It is not just about placing a robot on a factory floor and robotising processes,” Atkinson stated. “There needs to be an assurance that using technology to improve efficiency in one part of the production line does not create a bottleneck elsewhere. There is a fine balance.”
Atkinson also explains how digital twin technology is emerging as a contemporary game-changer in production planning. By creating virtual replicas of entire factory floors, manufacturers can simulate workflows, stress-test configurations, and optimise layout designs, all before breaking ground or retooling.
Once a niche prototyping tool, additive manufacturing is now integrated into full-scale production pipelines. “The use of additive manufacturing enables complex designs traditionally impossible with traditional manufacturing methods,” Atkinson added. The ability to 3D print with multiple materials and generate complex geometries is enabling faster iteration, lightweight design, and more sustainable parts, especially critical in aerospace, automotive and medical sectors.
A strategic blueprint
Beyond the tech, UK manufacturers are aligning with global priorities, notably sustainability, cybersecurity and supply chain resilience. With the sector now a key target for cyberattacks, digital defences are no longer optional. “The manufacturing sector is now the most targeted in the UK,” said Atkinson.
“This is above healthcare, legal firms and banks.” To mitigate risk, manufacturers are reshoring critical supply chains and investing in advanced materials such as graphene to gain long-term strategic flexibility.
Driving this transformation is a strong research and innovation infrastructure. The UK’s Manufacturing Technology Centre (MTC) exemplifies how government-backed platforms can bridge academia and industry. The centre, which entered a long-term strategic partnership with Lloyds in 2015, fosters collaboration, supports upskilling, and accelerates technology adoption; from AI integration to 3D printing. MTC aims to train and upskill more than 6,000 graduates and engineers by 2030.
Lloyds’ partnership with MTC was recently extended to the end of 2029, with a total sponsorship of £15m. “We believe this partnership promotes collaboration between technology and manufacturing,” said Harris. “It unites two sub-sectors that need to work together.”
David Atkinson added that such investment is key for addressing a fundamental issue in the UK’s manufacturing sector. “Reports suggest that there are currently around 75,000 vacancies in the world of manufacturing,” he said. “Around a third of these are more than a year old. There is no point having all the latest technology if you have not got the skills to use it.”
Harris agreed. “The challenge for the industry is getting enough skilled humans alongside the right level of investment.”
Support is paramount for the future of the UK manufacturing to not just champion the modernisation of the sector but also to be able to step up their ESG commitments.
According to a 2024 report from leading manufacturer organisation Make UK, in partnership with Lloyds, more than three quarters (77%) of firms are receiving ESG requests from their customers but less than half claimed they had the resources required to meet them, highlighting a need for greater support.
“As a manufacturer, it is key to reduce carbon footprints, remove waste and make your factory more carbon efficient to be more attractive to certain supply chains and align with consumer demand,” Atkinson said.
Along with an ongoing partnership with MTC, Lloyds has also sponsored key events promoting the UK manufacturing sector; including the MTC’s annual National Manufacturing Summit and the MACH exhibition run by the Manufacturing Technologies Association, which brings together around 26,000 manufacturers every two years.
Fulfilling potential
Success in modern-day manufacturing is not just about adopting technology, it is about integrating it strategically, investing in people, and building ecosystems where innovation and resilience go hand in hand.
“Here in the UK, we have a world-class reputation for quality,” Atkinson explained. “We also have globally recognised universities. In other words, we excel at generating ideas and producing quality; we just need to bridge the gap between initial ideas and manufacturing implementations. Then the opportunities are endless.”
The factories of the future are here, and despite ongoing challenges, the UK is making keen progress in laying down the digital foundations to build them.
David Atkinson is head of manufacturing and Steve Harris is head of the technology sector at Lloyds SME & Mid-Corporates
Lloyds’ relationship managers are experienced in the tech sector and are keen to support further growth of this vibrant industry. Please get in touch today to discuss how they might help your business.
For more information about how Lloyds supports British tech businesses, click here.
