UK manufacturers shift from AI adoption to industrial execution

The United Kingdom is entering a more disciplined phase of digital transformation, where success is defined by execution, resilience and workforce capability rather than technology adoption alone. That is according to Rockwell Automation’s 11^th annual State of Smart Manufacturing Report.

The study, based on feedback from more than 1,500 manufacturing leaders globally, highlights a clear shift in how UK manufacturers are approaching digital transformation. With 87% of organisations now recognizing it as essential and allocating an average of 27% of operating budgets to industrial technology, the UK has moved beyond early-stage adoption and into a phase where digital investment must translate into operational performance.

“UK manufacturers are moving beyond experimentation into a phase where digital technologies must deliver consistent operational outcomes,” said Phil Hadfield, UK managing director, Rockwell Automation. “The challenge is no longer access to technology, but the ability to embed it into production environments in a way that improves performance, resilience and competitiveness.”

Artificial intelligence sits at the center of this transition. Nearly half of manufacturers have already invested in AI, and adoption of generative AI is now widespread. The focus, however, is shifting away from experimentation toward practical use cases that deliver measurable value. Cybersecurity has emerged as the leading AI application, followed closely by quality control and process optimisation, reflecting a growing emphasis on protecting and stabilizing increasingly complex production environments.

This growing reliance on connected technologies is also reshaping risk. Half of UK manufacturers report experiencing at least one cyberattack in the past year, despite strong levels of investment in cybersecurity. The implication is clear: as digital maturity increases, so too does exposure. Cybersecurity is no longer a supporting function, but a central pillar of industrial strategy.

At the same time, workforce dynamics are becoming a defining factor in how quickly digital transformation can progress. Rising labor costs now affect 40% of manufacturers, while change management challenges have increased significantly year-on-year. Rather than reducing headcount, organizations are focusing on reskilling and workforce development, with more than a third of employees now engaged in training programmes designed to support digital roles. 

This shift is closely linked to the growing importance of AI capability. A clear majority of manufacturers now see AI skills as critical to attracting the next generation of talent, highlighting a structural change in how industrial workforces are being shaped.

Alongside AI, simulation technologies such as digital twins are beginning to move from concept to deployment. While just over a quarter of manufacturers having already implemented these technologies, the vast majority are either investing or planning to do so, signalling strong forward momentum. These tools are enabling organizations to test scenarios, optimize processes and reduce operational risk before making changes on the factory floor.

However, the full value of these technologies is being constrained by a more fundamental issue: data. UK manufacturers report using less than half of the operational data they collect effectively, pointing to a persistent gap between data generation and decision-making. Closing this gap is likely to be one of the most important factors in determining future competitiveness.

More broadly, UK manufacturing is showing clear signs of maturity. Smart manufacturing technologies are now widely deployed, and adoption is accelerating as organizations focus on scaling what works rather than piloting new tools. Artificial intelligence is increasingly seen as the technology most likely to deliver meaningful operational improvements, reinforcing its central role in the next phase of industrial transformation.

Taken together, the findings suggest that UK manufacturing is entering a new phase of digital transformation. The foundations have been laid, investment is established and adoption is widespread. The next challenge is execution — turning digital capability into consistent, scalable performance in an increasingly complex industrial landscape.

UK at a glance

• 87% of UK manufacturers say digital transformation is essential
• 27% of operating budgets allocated to industrial technology
• 49% have already invested in AI, with 38% planning further investment
• 53% have invested in generative AI, with 33% planning adoption
• Cybersecurity is the leading AI use case at 48%
• 62% have invested in cybersecurity technologies
• Cybersecurity is the leading AI use case for UK manufacturers, cited by 48% of organisations
• 27% have deployed digital twins, with 47% planning investment (88% total)
• 45% of operational data is used effectively
• 40% cite rising labour costs as the top workforce challenge
• 36% cite change management as a key barrier
• 38% of employees are engaged in reskilling programmes
• 48% identify AI as the technology with the greatest operational impact

Research methodology

The State of Smart Manufacturing Report reflects insights from manufacturing leaders across multiple countries and sectors, including automotive, life sciences, consumer goods, and industrial manufacturing. The research explores adoption of advanced technologies including artificial intelligence, cybersecurity, digital twins, and workforce transformation strategies, providing a comprehensive view of how manufacturers are evolving in response to increasing complexity and competitive pressure.