|
Click on the cover to read the latest issue of PSB
Affiliate Links
|
Manufacturing can't fend for itself04 April 2011 National government must nurture the revival of UK manufacturing, actively encouraging investment and development so that it grows to become one of the biggest sectors in the economy. For PSB's current newsletter, we invite Softstart's Stuart Harvey to make the case for this, and indicate what steps must be taken to achieve it.
"Go back a few years, and the government was talking about ‘re-balancing the national economy’. The thought at that time was that we had become overly dependent upon some sectors and let other key sectors slip. To many people it all seemed a bit academic, and something of a distraction from the issues of the day.
"But then came an economic collapse of epic proportions! Fortunately, we are probably through the worst of this now and in a position to learn lessons.
"Looking globally, it is clear that those countries with strong and growing manufacturing sectors fared better in the downturn than those with a greater focus on the banking, financial and service sectors.
"China and other emerging nations with dynamic manufacturing economies hardly faltered. Germany, which accounts for a large proportion of European manufacturing, became an engine for recovery.
"Now as the UK recovers, manufacturing is leading the way. Growth is clocking in at around 2 per cent and tipped to continue steadily for a number of years. It even weathered this year’s snows where other sectors fell back. And very similar figures are coming out of American manufacturing.
"In the thick of all this, the UK has had a change of government, but party politics needs to be put aside. The new incumbents should maintain the drive to re-balance the economy, not throw the baby out with the bath water just because their predecessors thought it up!
"Manufacturing currently accounts for 12-15% of the UK economy, about half the figure of a generation ago. Again these figures are similar to America, and both countries have seen capacity and jobs move offshore in recent years as companies have sought to compete in globalised markets.
"Conversely, Germany and Japan spent the second half of the twentieth century growing their manufacturing capacity. The smaller Asian Tiger nations benefited enormously by developing manufacturing capabilities in the 1980s and 1990s. And now Brazil, Russia, India and China (the 'BRIC' countries) are reaping rewards.
"The inescapable conclusion than is that national economies must have a robust, healthy and forward-looking manufacturing sector, plus the engineering and technology to support it.
"Several factors can be identified as vital for success, and it is the responsibility of the government of the day (of whichever party or coalition) to get at least some of these in place. Investment must be encouraged, though tax breaks, enterprise initiatives, and other financial measures.
"The worsening skills shortage has to be addressed. Current workers need to be up-skilled, and youngsters encouraged into the engineering professions. For the latter, good career possibilities have to be seen, and the number of technical courses at colleges and universities increased massively. A mere five percent of UK students are on an engineering course, compared to nearer 50 percent in China and India.
"Children need to be excited at the thought of making things; teenagers need to be shown the advantages of secure stable jobs in technical sectors; young adults need to see a career path of promotions and on-going opportunities.
"A complete change of culture is what is required. Britain rose to world leadership at a time when engineering and production were celebrated. America followed suit mid-century, then Germany and Japan and later the Asian Tigers. Now the BRIC countries are riding the wave.
"Today’s managers and senior engineers need to be encouraged to invest in production capacity and redevelop their plants for tomorrow’s markets. Automation is critical; it is the only way to produce consistent product quality at globally competitive rates. It must be noted that automation is not simply about tomorrow’s markets; its real role is future-proofing production for years and decades to come.
"Interestingly, most manufacturing companies will need the support of their banks if they are to invest effectively. Banks need to reinvent themselves so that they are able to invest in manufacturing companies large and small, instead of chasing notional paper profits and enormous personal bonuses.
"Tax and regulatory regimes must be developed to encourage innovation in manufacturing. Small and medium enterprises should be given every opportunity to blossom, for it is often they that lead the way with innovation. Some SMEs will fail, others will be bought up by bigger organisations; but that is the way of enterprise, a fact that needs to be recognised if enterprise is to flourish.
"Manufacturing is a global business, so manufacturers need to be world class if they are to compete. It’s a tall order, so they need every help they can get. But if they don’t get it, the national economy will never be able to succeed."
We're grateful to Stuart for his contribution.
Les Hunt
Editor
Contact Details and Archive...Related Articles...Most Viewed Articles... |
|