Spatial Restructuring of Advanced Manufacturing in the UK: Cluster Effects and Absorption Capacity Determine the Success or Failure of Regional Revival

In addressing the challenges of regional inequality and "forgotten" communities, Advanced Manufacturing (AM) is seen as a core driver for reshaping the UK's economic structure. However, how to successfully deploy advanced manufacturing in deindustrialized regions remains a major geographical and strategic challenge for current industrial policy.

Research indicates that advanced manufacturing is typically spatially dispersed, but it exhibits significant geographical differences in specific sectors. For example, "engineering-type manufacturing" such as aerospace, automotive, and defense manufacturing has historically been concentrated in the traditional industrial areas of the North West of England, Central England, and the Midlands, showing a certain advantage in spatial clustering. In contrast, activities related to "science-type manufacturing," such as pharmaceuticals, computing, and optics, have declined in many traditional industrial areas.

The impact of the COVID-19 pandemic highlighted the vulnerability of this regional disparity. Research points out that engineering-type manufacturing was the most significantly negatively affected during the pandemic. This suggests that in the current uncertain macroeconomic environment, regional support strategies for specific industries need to be finely tuned, rather than relying solely on pre-selected innovation centers or regions. Furthermore, significant connectivity barriers still exist for small and medium-sized enterprises (SMEs) in the stages of innovation to commercialization and the translation of technology into supply chains.

Regarding the spatial organization of industrial clusters, existing literature shows disagreement on the impact of firm spatial agglomeration on productivity. Research has found that in most advanced manufacturing sectors, physical proximity has a negative impact on total factor productivity, especially for small firms. However, for larger firms, this limitation may be offset by "absorptive capacity." This means that mere physical proximity does not automatically promote technology spillovers. True cluster performance depends on the ability of firms to absorb external knowledge, engage in knowledge exchange, build supply chain collaboration, and enhance skills.

Therefore, formulating industrial strategies for deindustrialized regions must go beyond the traditional "innovation center" model. Successful regional revitalization requires more coordinated strategies, meaning establishing closer cooperation mechanisms between the government, private sector, and universities, focusing on strengthening local "absorptive capacity." This includes supporting the ability of firms to adopt technology, share knowledge, and build resilient supply chains. Only by shifting policy focus from simple "industrial presence" to "capacity building" can we truly activate those potential advanced manufacturing clusters and achieve long-term, sustainable regional competitiveness.