A guide for New Zealand’s manufacturing leaders

Adam Sharman, CEO LMAC Group APAC

Having recently spent time on the ground with our team in Europe, it has been interesting to reflect on the common trends and differing approaches to industry support across Europe.

Whilst different countries face some of their own unique challenges, priorities, constraints and policy backstops, one thing is clear; across Europe the manufacturing playbook is being rewritten.

For New Zealand manufacturing, having an eye on the commonalities and practical differences in the European markets matter as much as the headline trend words (AI, reshoring, decarbonisation).

In this article, we reflect on what’s really happening on the ground across the UK, France and Germany— and what we can learn in New Zealand.

The UK: fast-to-adopt, policy-energised, skills-constrained

UK manufacturers are pushing hard on data, AI and automation as the primary levers for productivity — driven by government programmes (Made Smarter), trade and tax incentives, and a recent policy pivot to a long-term industrial strategy that backs advanced manufacturing and skills investment.

That policy momentum is prompting many UK firms to accelerate AI/ML pilots, invest in connected-factory programmes and consider reshoring for resilience. Yet adoption is uneven: SMEs still cite awareness, skills and access to capital as the highest barriers.

Leaders should therefore prioritise scalable pilots that deliver measurable OEE (overall equipment effectiveness) gains, pair technology buys with rapid upskilling, and actively use available regional funding and schemes to lower implementation risk.

France: state-led modernisation and selective reindustrialisation

France combines a deliberately interventionist industrial policy with long-term programmes — “Industrie du Futur” and targeted investment funds — to modernise medium-sized sites and attract strategic projects (gigafactories, batteries, critical supply chains).

The French state has used subsidy schemes and coordinated “Team France” efforts to push digitalisation, decarbonisation and on-shoring where it judges national interest. For leaders, that means attractive grant opportunities and a predictable policy partner when projects align with national priorities (strategic supply, green tech).

But firms must be ready for tighter regulatory expectations around sustainability and local content, and they should design proposals that tie productivity, jobs and decarbonisation into one business case.

Germany: technologically advanced but squeezed by energy and export headwinds

Germany remains a global leader in automation, machine tools and platform-driven Industry 4.0 practices, backed by a dense supplier ecosystem and standards work. Yet its sector has faced a tougher macro picture: weak export demand, high energy costs for energy-intensive production, and cyclical weakness in autos and capital goods have constrained investment and output.

Policymakers and industry platforms continue to push digital standards and decarbonisation measures, but many firms are shifting CAPEX toward energy efficiency and supply-chain diversification rather than large scale expansion.

For leaders, the German lesson is that excellence in engineering and process innovation is necessary but not sufficient — energy strategy (contracts, flexibility, local generation) and market diversification are now core strategic priorities.

Cross-cutting trends you can’t ignore

Digital + people = the activation equation. Across all three countries, leaders report that tech alone doesn’t deliver value unless paired with new operating models and skills pipelines.

Targeted training, short-cycle pilots and metrics that tie digital projects to margin or lead-time wins are non-negotiable.

Resilience beats lowest-cost sourcing. Geopolitical risk and logistics fragility have made reshoring/nearshoring options commercially viable — but only when combined with automation to offset higher labour or energy costs.

Decarbonisation is now a cost and a market filter. Energy transition policies and corporate buyers are pushing manufacturers to invest in emissions reduction; those that lead will win contracts and finance more easily, but the short-term burden is material — especially in Germany.

The energy transition also opens product-market opportunities (green steel, battery systems, circular services).

Practical playbook for manufacturing leaders

Take a data-driven approach to prioritisation: using analysis of production and enterprise data, shortlist 3–5 projects (one productivity, one resilience, one sustainability), estimate payback, and secure an executive sponsor.

Make energy strategy part of manufacturing strategy: procure flexible tariffs, evaluate on-site generation and demand-response, and model product margins under different energy scenarios.

Invest in modular workforce programmes: micro-credentials, apprenticeships, and industry partnerships that convert tech pilots into repeatable capability across sites.

Invest in AI to support agility and rapid analytics: Pick a practical use case, experiment with agentic AI tools to address the use case and use the use case to build capability.

Bottom line

The UK is prioritising agility and strong policy tailwinds for digital adoption; France is prioritising direct state support for targeted modernisation and strategic projects; Germany is developing the deepest engineering ecosystem but faces near-term macro and energy headwinds.

For New Zealand’s manufacturing ecosystem, organisations and government shouldn’t bet on one “best” approach — a combination of prioritise, including digital experiments and AI like the UK; state-supported strategic plants like in France; engineering-intensive exports and energy-efficient modernisations like in Germany to support cross-border resilience in supply footprint.