‘Workshop of the world’ … Is British manufacturing a thing of the past?

Image of old industrial plant.

Image: Till Krech via Flickr under a Creative Commons Licence.

By Steven McGinty

In the 19th century, Britain was heralded as the ‘workshop of the world’, producing everything from locomotives to extraordinary handicrafts. By the 20th century, the United States was the predominant manufacturing power, but Britain had become a specialist in manufacturing.  In recent history, economic growth has been led by the service sector, particularly from financial services in the City of London.

This change in the economy has led to a lot of debate. In fact, this was cited as one of the main drivers of inequality by the Scottish Trades Union Congress (STUC) at a recent seminar I attended. However, does this mean Britain should return to its industrial roots, or should it focus on the provision of services, which has been seen as key to recent economic successes?

The Chancellor, George Osborne, certainly thinks there’s a place for manufacturing. In March 2014, he emphasised that his Budget was focused on boosting UK manufacturing and rebalancing the economy across the regions. The Budget included some high profiles measures, including the introduction of £7 billion of funding to cut energy bills for manufacturers, as well as compensation of £1 billion for energy intensive manufacturers.

A recent House of Commons Library statistical release provides some interesting insights into the UK manufacturing sector. It reports that economic output has decreased from 30% in the 1970s to 10% in 2012 and that manufacturing was badly affected during the recession, falling 14.5% between the first quarter of 2008 and the third quarter of 2009. The manufacturing workforce has also reduced from 5.6 million in 1982 to 2.6 million in 2014.

However, an Office for National Statistics (ONS) report provides some signs of optimism. It found that, since 1948, productivity in the manufacturing sector has increased gradually by 2.8% each year, compared to 1.4% in the service sector. The report suggests that the UK manufacturing sector has benefited more from information and communications technology (ICT) than the services sector and the more integrated global economy.

These factors have contributed to a shift from low-value manufacturing, where the focus was on low costs and low skilled workers, to high-value manufacturing, where workers provide value to the production process with their knowledge and expertise.

Interesting trends have also started to develop. For instance, Civitas has produced a report into ‘onshoring’ or ‘reshoring’, a practice that involves firms bringing back production that they had previously sent overseas. Firms are taking this approach for a number of reasons, some of which are related to the difficulties of offshoring such as language barriers, whereas others are looking more at the positives of domestic production, such as improved quality control, as well as an increase in a brand’s appeal by its connection to having products manufactured in countries such as the UK. Examples of onshoring including General Motors, who are currently investing £125 million in a domestic supply chain in the UK.

The report also highlighted that there are still barriers to onshoring. For example, less flexible workforces, although this is deemed to be changing in the United States as trade unions are becoming more flexible.

We have also seen the rise of ‘phoenix industries’. These are groups of firms that use similar technologies and have emerged in traditional industrial areas, typically developing sophisticated components for use in a range of industries. This idea was discussed in a recent article in the Cambridge Journal of Regions, Economy and Society. It focused on a case study of the West Midlands, an area which has been seen as the ‘heartland’ of the automotive industry.  The article emphasised the importance of Jaguar Land Rover (JLR), the niche/luxury car manufacturer, for providing opportunities for smaller more innovative companies in their supply chain. Yet, the article also highlights that getting access to funding is key for these companies to develop their prototypes. This lack of funding for small firms was identified as a weakness of the UK sector.

So, is British manufacturing a thing of the past? The answer is most likely no. However, the shape of the manufacturing industry and the role it has to play as part of the overall economy has still to be determined. This will depend on a number of factors including future government policy, particularly addressing issues such as access to capital and shortages of skills, as well as the overall global economy, most notably the ability of the Eurozone to recover from its current economic downturn.


 

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To regulate or not to regulate? Housing standards in the private rented sector

To Let housing signs

Image from Flickr user Locksley McPherson Jnr, licensed for reuse under a Creative Commons License

The Scottish Government published its ‘Consultation on a New Tenancy for the Private Sector’ on the 6 October 2014. The paper states that 333,231 homes are rented privately in Scotland and it puts forward proposals to modernise the sector including giving tenants greater security of tenure, including:

  • Landlords to offer tenancies of not less than 6 months.
  • A bar on repossession except in specific circumstances.
  • The introduction of a model tenancy agreement.

The consultation poses a series of questions relating to rent levels, in particular ‘what action, if any, should the Scottish Government take on rent levels in the private rented sector in Scotland?’ Clearly the focus of the consultation is on the affordable private rented sector, but the implications of legislative change are likely to be far broader and impact across the whole rental sector.

The consultation raises a number of big issues for a range of stakeholders including tenants, landlords, citizens’ advice bureaux, local authorities, and indeed for the broader social rented sector, because any changes may well have knock-on implications far beyond the private sector tenant/landlord relationship.

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Town centres first?

boarded up shop

© Copyright michael ely and licensed for reuse under this Creative Commons Licence

by Dorothy Laing

Has the town centre first policy failed in its attempt to restore vitality to Britain’s failing high streets?

Town centres and high streets across Britain have been suffering from the combined effects of the increase in online shopping, car parking issues, increasing business rates, and the impact of the recession, as well as the challenges of out-of town centres.

The benefits of vibrant town centres have been well documented by Portas, Grimsey and Fraser who have all Continue reading

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Travel shutterstock_107480828

by Brelda Baum

It is estimated that tourism has the potential to generate $2 trillion globally by 2020 – as the economic situation improves and the ‘Great Recession’ is deemed all but over, let’s take a look at the evidence of the economic value of tourism to the UK and its regions.

The Deloitte and Oxford Economics report ‘Tourism: jobs and growth – the economic contribution of the tourism economy in the UK’ provides an analysis of the performance of the tourism industry Continue reading

Encouraging the voters of the future

ballot boxby Rebecca Riley

In this local election 4,200 seats are up for grabs, including all London boroughs, all 36 metropolitan boroughs, 74 second tier district authorities, 20 unitary authorities and various mayoral posts. The expectation has been that Labour would gain about 500 seats and the Conservatives may lose 200 seats, but with turnout set to be 36% how do we encourage more people, especially the young to vote in local elections? Continue reading

World Health Organization Air quality release: UK focus

smoking chimney

by Alex Addyman

The World Health Organization (WHO) has today released air quality data for 1600 world cities across 91 countries. In the press release accompanying the data release WHO explained that:

  • Only 12% of the people in cities covered live within WHO’s recommended air quality guideline levels.
  • About half of the urban population being monitored is exposed to air pollution that is at least 2.5 times higher than the levels WHO recommends – putting those people at additional risk of serious, long-term health problems.
  • In most cities where there is enough data to compare the situation today with previous years, air pollution is getting worse.

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Girls need STEM role models

female scientist

by Stacey Dingwall

The fact that women are underrepresented in STEM (science, technology, engineering and maths) careers in the UK is not news – figures released by the government in August 2013 revealed that despite making up 46% of the UK workforce, just 15.5% of the STEM workforce are women. A new report published by ScienceGrrl, a not-for-profit grassroots organisation which aims to celebrate women in science, has highlighted perhaps one of the biggest reasons why there are so few women working in, and girls aspiring to work in, STEM related fields – a lack of role models.

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Is it a happy birthday for National Minimum Wage?

wage-packet

by Donna Gardiner

Today, (Tuesday, 1st April), is the 15th anniversary of the introduction of the National Minimum Wage in the UK.  The anniversary occurs during the second week of the Trade Union Congress’ (TUCs’) ‘Fair Pay Fortnight’, which aims to raise awareness of the problem associated with low pay, in-work poverty and the increasing cost of living in the UK. Continue reading

After the floods

Floating house in Taggs Island

by Dorothy Laing

With flood levels finally subsiding, householders and businesses are faced with a mammoth clean-up operation, but with flooding likely to be a regular occurrence due to climate change  is it time to think seriously about designing and building flood resilient or amphibious housing?

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Cycling safety infrastructure and awareness: UK and beyond

Bicycle lane

by Laura Dobie

With governments facing challenges such as climate change adaptation, rapid urbanisation and congestion in cities, and increasing levels of obesity, it is unsurprising that the promotion of active travel is a growing preoccupation in transport policy in the UK and internationally. Continue reading