British Manufacturing

08Oct08

British manufacturing is in decline!

Now that’s a news item I’ve heard so many times it’s sometimes hard to take seriously, but this time I think they really mean it – depending on what sort of manufacturing you are talking about.

Competition from countries where wage and resource and energy costs are a fraction of what they are here has meant the loss of almost all but the most tenacious of mass-manufacturers of FMCGs (fast moving consumer goods), and heavy industry – shipbuilding, for example – has again been cut out almost completely by foreign competition (even if a lot of the design and technology of these foreign factories is UK-generated). The motor industry (Rover Group failure notwithstanding) appears to be reasonably healthy, although it is questionable whether it can be called British, given it is now almost all in the hands of foreign owners. The traditional concept of mass-manufacturing, particularly when compounded with the current financial situation, is one that is no longer sustainable in this country. It has been declining steadily for decades, and I think it is pretty much in its death-throes. The UK is just not big enough to compete in a mass-market, and our resources are too costly.

Is the picture really as gloomy as has been painted? Have we truly become a nation of shop-keepers and service-providers? I’m not convinced. I think that there is a steadily growing undercurrent amongst those self-same expensive resources that is starting to build a new manufacturing industry. It is not a bulk industry, it is not aimed at the mass-market, and it is not high volume. Rather, it is a swathe of specialised products across a range of different sectors, who are delivering sophisticated, high-end, high-spec, technology driven products and supporting services coming from an enterprising, problem-solving and innovative group of diverse people.

The fact is that the UK remains the sixth largest manufacturer in the world, and manufacturing accounts for around half of all exports. A good proportion of these exports are high-technology products and components, more than the US and Germany, even. Only the US attracts more foreign direct investment into its manufacturing industry, and 3/4 of all business investment in research and development comes from this sector. Globalisation may have brought some problems, but it has presented UK Manufacturing with some significant opportunities, which have been grasped with both hands.

The increasing sophistication of both processes and products have had one key negative impact. The proportion of graduates employed in manufacturing is steadily increasing, alongside investment in intangibles – training, research and development, etc. As automation and productivity levels have increased, and as complexity and specialisation have increased, so the need for large quantities of unskilled manual labour has steadily declined: there is no longer a need for the large volumes of labour industry once required.

So what impact does this have on our society? The scaremongers are right, to a degree. The decline of British Manufacturing as a mass employer has effectively done away with the need for a working class. In times past, landowners and industrial entrepreneurs of all kinds have been dependent for profit and success on a large pool of flexible unskilled labour that can be drafted in to carry out vast quantities of simple, repetitive tasks. Now that is no longer the case, we are faced with a problem.

The working class is still there.

We still have a large pool of unskilled, and as a general rule poorly-educated, labour. Unfortunately, the number of jobs requiring unskilled, poorly-educated labour are steadily declining. With the loss of traditional agricultural, domestic and manufacturing employments, no new source of employment has come on-line. And in the jobs that are available, there is stiff competition from foreign migrants, generally from other EU countries, willing to work harder and for less money than our own working class.

I heard the MD of a firm of heating engineers complaining recently about foreign workers and how dangerous they were on site. I challenged him and asked him if they’re such a problem, why does he employ them. Why not employ English workers? The simple answer is that he cannot find enough English workers to fill the vacancies, and when he does they want more pay and work less hard than their foreign counterparts.

Close to where I live, an old filling station that had been derelict for a number of years has been taken over by a group of East Europeans who are now running the most fantastic hand car-wash service. It’s stunningly quick, outstandingly good value, and they’re friendly and do a great job.

What does this have to do with anything?

Well. It’s by way of an illustration. Here’s another.

A friend of a friend told me that he would have to get a job earning at least £20k p.a. (before tax) for it to be worth him taking it, because at any less than that, the amount of benefits he would lose by working would make him worse off. This enforced dependency on the state seems absolutely insane to me. Surely it would be possible to balance the two so that there is incentive to work, rather than a disincentive?

I am not for a second proposing that benefits should be cut to those who are unable to provide for themselves and their families, and whole-heartedly agree that there should be some sort of state safety-net to help those who need it. I do not buy into the Daily-Mail-generated benefit-scroungers judgement tags. I don’t think those on benefits have it easy. I do think that there needs to be a radical change to this culture of dependency, which to me is directly linked back to the old paternalist tradition, a view of the working class as helpless ignoramuses who need to be protected from themselves by those who know better (but who aren’t actually interested in helping them to help themselves). It’s a view based “give a man a fish and he’ll eat for today” rather than “teach him how to fish and he’ll eat forever.” What I see is that this approach is starting to become dangerous. There is an increasing opt-out from society amongst the youth of that class who see themselves effectively excluded from success by virtue of their background – and in a culture where success is measured in material possessions, that opt-out is taking them beyond the law (and further disenfranchising them in the process). Criminalising an entire class is not a good solution, in my view.

What I do say is that we need to take a good hard look at our society and ask ourselves a couple of questions:

1) If the Victorian economic model no longer holds true, why is paternalism still so prevalent in this country? Why do we still feel that we have to ‘look after’ the working class? Why can they not be empowered to look after themselves?

2) Given the change in the economic model, and a shift to a problem-solving, innovative, knowledge-based business culture, why are we still running the mass-education, info-dumping programmes started by those same paternalists? Sure, it’s been tweaked around the edges, but it’s still essentially the same: corrall as many children as possible in one place, and stuff them with whatever information is needed to make them effective corporate drones.

It doesn’t work any more. Certainly not in this country, anyway. We need a wholesale culture shift in the education system that takes advantage of our strengths and plays more towards a local-based, small-scale, sustainable and sophisticated society, where teaching is more challenging – a drive to think rather than just to learn, where philosophy and logic have a clear place, and there is more focus on hands-on, craft-driven, apprentice-master style leadership and inspiration, where children are allowed to identify and explore and follow their passions. Logic dictates that such an approach cannot be carried out in the huge secondary schools servicing our communities currently. We need the shift back to small schools, where a close relationship is possible and necessary between teacher and pupil, where an individual has the space and time to explore their own understanding and sense of self in partnership with school and parents and peers. And not just a priveleged few: everyone should have this sort of opportunity.

Yes, it will cost more in the short term, but  surely in the longer term it will save a fortune in benefits, and in healthcare costs too, if one accepts the assumption that an educated population is a healthier one – and will generate more in taxes given higher employment levels at higher levels of earnings. If we have a generation of ambitious, empowered and energetic entrepreneurs creating and problem-solving and innovating, then we have an incredibly bright future.

I wish I could believe it might happen.

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