How SME manufacturers can battle, and beat, the UK skills crisis
How SME manufacturers can battle, and beat, the UK skills crisis
Project Manager for Internships and KTPs at WMG, Katy Wilson is part of the SME Group; linking businesses, academia and emerging talent, to provide vital and successful partnerships. Katy shares how SME manufacturers can harness the power of knowledge exchange programmes to battle the skills crisis.
Innovation is no longer optional for SMEs, it’s essential for staying competitive.
Faced with accelerating technological change, sustainability pressures, and a deepening skills crisis, many SMEs know they need to adapt; but the real challenge lies in knowing how, when, and with whom to make that change.
The skills crisis: a ticking clock for UK manufacturers
The UK’s manufacturing sector is facing many challenges right now, but none more urgent than the growing skills crisis.
A recent study by CIPD has found that:
- 57% of experienced frontline workers are expected to retire within the next five years.
- 72% of managers say existing skills gaps are already reducing productivity.
- 81% acknowledge that technical expertise is concentrated among older workers.
As the workforce ages, many experienced professionals are heading toward retirement, taking with them critical expertise built over decades.
To meet this challenge head-on, manufacturers must think differently. That’s where Knowledge Exchange (KE) comes in.
Knowledge Exchange in action
At its core, Knowledge Exchange is about collaboration; the flow of ideas, expertise, and innovation between universities and external organisations. It’s the bridge between academic insight and industrial impact.
But KE isn’t just about sharing knowledge; it’s about co-creating solutions to real-world problems, sparking innovation, and building long-term capability.
Two of the most powerful and practical forms of KE that I work with every day are: and Knowledge Transfer Partnerships (KTPs) and internships.
Knowledge Transfer Partnerships (KTPs)
One of the most impactful ways to address the skills gap and drive innovation in SMEs is through a Knowledge Transfer Partnership.
A KTP is a UK-wide programme that connects a business with a university by embedding a high-calibre graduate, known as a KTP Associate, into the company full-time to lead a strategic innovation project.
It’s a three-way partnership between:
- A business looking to innovate.
- A university providing deep academic expertise.
- A graduate delivering the project from within the company.
At WMG, our KTPs are designed to be forward-looking, high-impact, and strategically important: often lasting between 12–36 months and co-funded by Innovate UK.
Internships
While KTPs are designed for long-term strategic innovation, internships offer a fast, flexible way to address short-term challenges and opportunities.
Typically lasting 8–12 weeks, internships involve a student or recent graduate working within a business on a clearly defined project.
When well-supported, internships can:
- Inject fresh thinking and current academic knowledge.
- Provide valuable hands-on experience for emerging talent.
- Give businesses the extra resource to accelerate key projects.
Internships are incredibly agile. At WMG, we’ve used them to support everything from digital transformation and process improvement to sustainability planning, communications, and market research.
Innovation at the heart of battling the crisis
Many businesses know they need to innovate, but don’t know where to start, lack the in-house expertise to deliver change, or simply don’t have the breathing space to think differently.
That’s where Knowledge Transfer Partnerships and internships come in. They offer structured, supported routes to innovation, embedding new capability, building resilience, and creating lasting transformation.
These are not one-off fixes. They are strategic enablers that give businesses the tools not just to survive; but to grow, evolve, and thrive in a changing world.
Accessible funding powers strategic innovation
The good news? Accessing this kind of innovation support isn’t as complicated, or as costly, as you might think.
Thanks to national and regional funding schemes, these programmes are heavily subsidised, making them an affordable and strategic option for businesses of all sizes, especially SMEs that may lack the resources to hire or innovate at scale independently.
Here’s how it works:
KTPs:
• Co-funded by Innovate UK and partnering businesses (typically SMEs contribute about 33% of the total project cost, while larger companies contribute closer to 50%).
• Funding covers the salary of the KTP Associate (a high-calibre graduate), academic expertise and time, travel, training, and project management support.
• Each project is tailored with a bespoke candidate, carefully matched to address your specific business challenge or opportunity.
Internships:
• The WMG Internship Programme is subsidised by the Higher Education Innovation Fund, with a small cost for businesses from £4k.
• An agile, targeted approach, short projects matched with students or graduates who bring fresh, up-to-date knowledge.
• Flexible in format and low risk for businesses, with recruitment, onboarding administrative and project management support built in.
How WMG can help you
In my role as Project Manager for Internships and KTPs at WMG, I serve as the vital link between businesses, academia, and emerging talent, ensuring every partnership is not just launched, but set up for long-term success.
These programmes go beyond filling immediate skills gaps. They build a strategic foundation for innovation, supported by expert guidance, robust structure, and accessible funding; helping your business grow, adapt, and thrive.
Transforming projects, people and potential
When done well, Knowledge Exchange doesn’t just support innovation; it unlocks it. Through internships and KTPs, we’ve seen first-hand how the right partnerships can reshape how businesses think, operate, and grow.
At WMG, we’ve facilitated over 220 internship projects and engaged with more than 500 companies in the last year alone. From high-growth start-ups to established manufacturers, the results are clear: fresh thinking, faster innovation, and long-term impact.
KTPs operate on a different scale, but the results are equally compelling. KTPs are proven to deliver, on average:
- An increase of over £240k in annual profits for participating businesses.
- The creation of 2+ new roles per project.
- Long-term collaborative relationships with academic institutions.
At WMG, we’ve witnessed interns grow into skilled engineers, KTP Associates develop into business leaders, and innovation projects evolve into multi-year partnerships.
Knowledge Exchange isn’t a luxury: it’s a catalyst. When harnessed effectively, it becomes one of the most powerful tools we have for shaping the future of industry and overcome the skills crisis.
Ready to get ahead of the skills crisis and secure the future of your manufacturing business? Get in touch today.