Why volatility is the biggest barrier to investment. By David Grailey
Manufacturers are operating in one of the most volatile environments in decades and it’s having a direct impact on skills investment. From geopolitical conflict disrupting supply chains to sustained energy price fluctuation, businesses risk being forced into short-term decision making.
In this climate, workforce development is often the first casualty. This creates a dangerous cycle, because in an era defined by geopolitical uncertainty, skills are a strategic asset. When investment in skills slows, productivity and resilience fall, leaving manufacturers even more exposed to future shocks. In addition, businesses that invest in skills during downturns come out of these periods with faster and greater growth than those companies that do not.
Short-term survival, long-term risk
The UK’s manufacturing skills challenge is well documented but not always fully understood. This is not simply a vacancy issue; while there are around 50,000 roles unfilled*, many more positions are occupied by workers without the full skills required to drive productivity. At the same time, demand for advanced capabilities is accelerating rapidly – particularly in sectors such as defense and nuclear.
Layer onto this an ageing workforce, with around a third of employees aged 50 or above*, and the scale of the challenge becomes clear. This is not just a shortage of people; it is a lack of future readiness. Without sustained investment in training and reskilling, the UK risks falling behind in the global race for advanced manufacturing competitiveness.
The risk equation holding SMEs back
For SMEs, this challenge is even more pronounced. Smaller manufacturers are operating with tighter margins, leaner teams and less capacity to absorb risk. Taking on apprentices, while critical for long-term growth, can feel like an unnecessary investment when immediate productivity is the priority. In a high-cost, high-pressure environment, every employee must contribute from day one.
If we want SMEs – the backbone of UK manufacturing – to fully engage in skills development, policy must reflect this reality. That means reducing the perceived risk of training, sharing responsibility between government, employers and providers, and ensuring that learners can add value earlier in their journey. Without this, uptake will remain constrained, regardless of intent.
Turning training into a strategic lever
Encouragingly, the transition to increased flexibility through Growth and Skills Levy signals a shift toward a system that better reflects employer needs. ‘Apprenticeship Units’ were made available in April, which offer short, flexible training courses that upskill staff in critical areas. Skills for manufacturing and engineering led the first wave of seven units which includes: Mechanical Fitting and Assembly; Electrical Fitting and Assembly; Welding; Artificial Intelligence (AI) Leadership (developing AI strategy) and Battery Manufacturing. By allowing funding to be used for shorter, modular training and not just full apprenticeships, businesses can respond more quickly to emerging skills gaps.
This flexibility is critical in a volatile world. When confidence dips, training is often paused. A more adaptable model, combining shorter courses, modular pathways and flexible delivery, enables investment to continue even during periods of uncertainty. In effect, it turns skills from a fixed cost into a strategic lever.
Simplifying the system and reducing administrative burden will also be key to driving uptake, particularly among SMEs. Greater alignment between training provision and regional labor market needs should help ensure that investment translates directly into productivity gains.
MTC Training: from insight to action
At the Manufacturing Technology Centre (MTC), this principle is already shaping action. Short upskilling and reskilling courses in critical skills such as dual skilling engineers in electrical and mechanical skills are highly successful. In fact, some 79 percent of apprentices on our engineering apprenticeship programs complete and achieve their apprenticeship. We also identify skills needed in the future in manufacturing and convert these insights into training to support the adoption of new technology for the sector.
This approach is being extended through the launch of MTC Training Tyneside, a new center which helps employers in the North East with apprenticeships and upskilling. By combining hands-on training in areas such as mechatronics, engineering maintenance and manufacturing support, with direct industry collaboration, the aim is to help businesses of all sizes keep pace with changes in advanced manufacturing while improving productivity and long-term growth.
By developing a pipeline of skilled workers and opening high quality career opportunities for local talent, this center will strengthen the region’s economy and support the Government’s Industrial Strategy.
Skills are the ultimate shock absorber
The lesson from recent years is clear. In a world defined by geopolitical instability, skills investment cannot be treated as optional or deferred. It is one of the key levers manufacturers must build resilience, adapt to change and remain globally competitive.
David Grailey
www.the-mtc.org/how/skills-training
www.mtc-training.org/about/our-centres/tyneside
David Grailey is Managing Director at MTC Training. MTC Training is creating the next generation of engineering talent while upskilling and reskilling existing workforces to support the industry and accelerate technological adoption. It is a wholly owned not-for-profit subsidiary of the Manufacturing Technology Centre (MTC). MTC is a leading research and technology organization at the forefront of manufacturing innovation. Since 2010, its independent research and technology organization has delivered pioneering solutions to help overhaul industries spanning aerospace, defense & security, power & energy, built environments, space, agriculture, and food & drink.
