Dyson joins BAE and Rolls-Royce in urging government to give more support to manufacturing sector
The company founded by inventor Sir James Dyson has joined BAE Systems and Rolls-Royce in urging the government to boost industrial research and education in the UK amid signs that efforts to rebalance the economy towards manufacturing are faltering.
Dyson, whose innovative products have revolutionised day-to-day tasks from vacuum cleaning to hand-drying, called for more incentives to generate new business ideas as it reported an 8% increase in annual profits to �206m last year, on revenues that rose 15% to �770m. Martin McCourt, Dyson chief executive, said the company's export-driven model, where it sells eight out of 10 of its appliances abroad, could be replicated at other businesses if the government was more supportive. "We are consistently doing whatever we can to pressure the government and offer more incentives to encourage businesses like ours to invest in ideas," he said. "When you invest in ideas it is a risky business. Until it comes to fruition and you make it, all you are doing is spending money. We just need to offer some relief, better tax credits, and give companies some kind of incentive. That's the key to keeping manufacturing businesses successful on the world stage."
Last month, the boss of Britain's largest manufacturer, the defence company BAE Systems, warned that the government "cannot stand still" on investment in research and development and education, amid fears that the Ministry of Defence's R&D funding will be cut.
George Osborne's call for a "march of the makers" to return the UK to strong economic growth has yet to have a galvanising effect. In the latest indicator that manufacturing is struggling to meet the chancellor's expectations, the Office for National Statistics said manufacturing output fell 0.4% in June compared with the previous month.
The chief executive of Rolls-Royce, John Rishton, has raised concerns about the education system, saying that producing enough qualified engineers and technicians for industry remained a "long-term issue".
Dyson spent �45m on R&D last year and in 2009 it filed the second-highest number of patents in the UK after Rolls-Royce, which spent �923m on R&D in 2010. Dyson assembles its products in Malaysia and Singapore but employs 550 engineers at its R&D centre in Malmesbury, Wiltshire, for what McCourt called "the most vital stage" for any manufacturing business.
"It's not so much about manufacturing," he said. "It's about the investment we have been making in phenomenal ideas and putting that technology into the heart of our machines, then putting it into export markets. Over 80% of our sales are made overseas."
Dyson's airblade hand dryers are available in 34 countries including China and Romania, while sales of its air multiplier fan are up 150% in Japan and it leads the cylinder vacuum cleaner market in Britain, France, Switzerland, Belgium, Ireland and Spain.
Amid warnings from UK manufacturers of an engineering skills shortage, McCourt added that he would like "more evidence" of the government's commitment to skilled jobs. "The government has stated it wants to see significant scaling up of investment in ensuring that science, technology and engineering is encouraged. We would like to see more evidence of this. The encouragement has to start in the school system."
A spokesperson for the business department said: "The government is committed to giving businesses the incentives to invest in ideas to drive economic growth. We are introducing measures to give companies a reduced rate of tax on profits arising from patents. We are also increasing the amount of support for small and medium-sized businesses through the research and development tax credit, making it one of the most generous measures of its kind worldwide.
"The government's technology strategy board also invests around �300m annually in innovative technology businesses, with significant support for areas such as high-value manufacturing, regenerative medicine and low carbon energy."
Sir James Dyson studied architecture at the Royal College of Art but soon became obsessed with engineering and invented his company's signature vacuum cleaner after seeing "cyclone" suction technology at a dust-free sawmill.
Source: http://www.guardian.co.uk/business/2011/aug/16/dyson-profits-up-8-percent
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