The government is being urged to give the same financial support to manufacturing during the recession as it has to failing UK banks.
The Work Foundation think tank wants emergency state funding to help save jobs and companies in the "extremely important" sector of the economy.
Its comments came as a CBI survey showed that factory orders were falling at their fastest rate in 17 years.
The government said it had a "profound commitment" to helping manufacturing.
Ian Brinkley, associate director at the Work Foundation, said: "The question needs asking - what are we going to live on in the future?
"Modern manufacturing is once again facing a battering from the recession, but it would be a big mistake just to write the sector off.
"We need to preserve as much of the industrial base as possible because once it is lost it is near impossible to get back again.
"Despite the mythmaking around the demise of manufacturing, the sector remains extremely important for jobs, exports and GDP."
The report said that UK manufacturing had been transformed in recent years and deserved more support for research and development.
Other recommendations included a short-time working scheme to support firms and job losses in the current recession.
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