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How different countries are supporting manufacturers

The Institute for Manufacturing (IfM) has created a snapshot view of how major manufacturing nations have each responded to the Coronavirus crisis.

The report, produced at the request of government, offers a preliminary review of the international policy responses being put in place to mitigate the impacts of COVID-19 on manufacturing.

The IfM focused on the European Union and eleven other countries, including global manufacturing leaders like China, Germany, Japan, South Korea and the United States.

The findings show that there are three key focus areas common across all countries: support to ensure continuing operation of manufacturing businesses; policies to mobilise manufacturing towards critical medical supplies; and plans to support post-pandemic growth.

Financial support and tax benefits to keep companies operating are common across the board, but some countries have also announced specific policies to reduce the cost of utilities. This includes Australia, France and China, who are reducing or deferring energy bills for businesses.

Meanwhile, a number of different approaches have been taken to aid the shift to producing critical supplies such as ventilators, masks and sanitiser. While countries like Germany and the UK have favoured a voluntary approach, China has repurposed state-owned firms to supply medical materials and the US government has invoked powers to require businesses to accept and prioritise government contracts.

Unlike the UK, specific loans and subsidies for firms producing critical supplies have been put in place in Japan, India and Italy. In Japan, around £230,000 worth of subsidy per production line has been made available to incentivise the repurposing of manufacturing operations for the production of masks.

Some countries have already established programmes aimed at supporting the recovery and future growth of their manufacturing industries, particularly those that are further down the line in tackling the virus, such as China and South Korea. Measures established include programmes to boost productivity, skills development, capital investment, R&D and new business models. For example, Australia and Japan are providing incentives for capital investment, while India has put plans in motion to establish three new pharmaceutical parks to reduce future dependence on drug imports.

The report will be used by government to inform the UK’s own policy responses going forward.

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