Juergen Maier: Why Siemens will be at vanguard of digital Northern Powerhouse

I believe it can be at the heart of a so-called fourth industrial revolution that is sweeping the globe and transforming how we work and live.

And the reason why Yorkshire can be the heart of this digital revolution is that this region – and its cities – have an incredible blend of traditional manufacturing and digital start-ups.

Tech North say that digital businesses produce £671m in gross value added (GVA) in Leeds. There are 23,734 tech workers employed in the city. The industry in Sheffield and Rotherham produces £273m in GVA and employs 14,313 workers, while tech businesses produce £189m in GVA in Hull and employ 6,070 people.

The GVA for the region generated from manufacturing is roughly £16.3bn and there are 11,940 manufacturing companies here, around 16 per cent of regional output. As a manufacturing destination, Siemens has completely bought into ‘Made in Yorkshire’ having invested £310m in our Green Port Hull wind turbine production facility, as we also continue to manufacture and invest in Leeds and in York.

The question is how can these two great regional assets – manufacturing and digital – can be brought together to create a new wave of industrial growth, investment and highly-paid jobs?

It’s something I am considering as part of the industry-led review I am chairing into what is being called ‘industrial digitalisation’.

I believe that in order to make this digital manufacturing a reality for the region, three things are essential to get right over the next five years, regardless of elections and regardless of Brexit negotiations.

Firstly, we must strengthen industrial strategy for Yorkshire.

The UK has been on the journey to create a new Industrial Strategy, but for only seven years – a relatively short time when compared to other key industrial nations. In that time, the approach has had periods of enthusiasm and others of pause and some reversal.

We are witnessing consensus on the need for a long-term strategy seeking to invest in new technologies, such as digital tech.

The devolution agenda needs to have explicit reference to the core cities embracing a digital fourth industrial revolution. In fact it must be part of their mandate. These core cities, such as Leeds, Hull, Bradford, Sheffield and York, must have a mandate to stimulate innovation clusters through tax incentives for small businesses pioneering new technology. Local authorities must pinpoint specialisms and foster a culture of collaboration between public and private sectors.

Next is doing more for research and development in Yorkshire – earmarking capital specifically for this is a must so we can build further on regional successes such as the High Value Manufacturing Catapult Advanced Manufacturing Research Centre in Sheffield.

We need to see a steady rise to at least 2.5 per cent of GDP spent on R&D by 2020. This would also boost the amount of innovation companies like Siemens undertake here.

Siemens is committed to helping Yorkshire become a testing ground for new innovations in advanced manufacturing and digital technologies. And, we are keen to engage with and invest in innovative start-ups.

We have launched an initiative called Next 47, which will search for start-ups in key technology areas to support the new digital industrial revolution.

Thirdly, for a digital revolution in Yorkshire to take off, we need the right skills. We are heavily invested in the University Technical Colleges of Hull and Leeds – we want to see more of them to train up future apprentices.

We need this because in the next decade, the UK’s engineering sector needs around two million skilled workers, and Yorkshire will need around 350,000 of those.

Innovation clusters depend on highly skilled workers – not only coders and programmers, but also people with sales and marketing expertise. According to Tech North, the UK’s digital economy is expected to require an extra 760,000 digital workers between 2015 and 2020.

And there needs to be much closer connection between the disciplines of digital and tech and engineering, requiring a much stronger focus for graduate and apprentice training.

Yorkshire has the potential to lead the world again in a new kind of tech transformation.

I personally believe the overall conditions are better now than they have been for several decades. It’s down to today’s innovators and business leaders to get involved; to work in partnership with the Government to ensure more strategic and longer-term thinking, and make sure all businesses invest, innovate and educate to help create this ‘Digital Northern Powerhouse’.

Juergen Maier is CEO of Siemens.