Saturday 20 October, 10.30am until 12.00pm, Garden Room
Manufacturing has long been argued to be the heart of any modern economy. It produces valuable exports, boosts the balance of trade, provides skilled jobs and generates even more jobs in supporting service sectors. Yet many developed economies have seen the weight of manufacturing in their economies decrease since the 1970s, relative to services and finance. In Britain, the service sector today arguably is the economy. Since the financial crisis hit, however, there have been many calls for a ‘rebalancing’ of the economy towards making things again, towards production and away from consumption. Is it realistic or desirable that Britain tries to emulate Germany’s famous ‘Mittelstand’ of export-led medium-sized firms, and its engineering prowess?
John Cridland of the CBI has called for banks and government to support Britain’s own ‘Midlandstand’ while Blue Labour’s Maurice Glasman argues for reforms on the German model: workers’ representation on company boards and vocational training. In short, an industrial policy. And Britain still has real strengths in sectors like aerospace, robotics, pharmaceuticals and automobiles. Already this year Jaguar Land Rover has announced plans to generate 4,500 manfacturing and engineering jobs. Weaker sterling and higher Chinese wages coupled with a desire to keep supply chains closer to home also bring hope to some that British manufactures might sail the seas once more. American manufacturing has bounced back since 2008, led by the likes of General Electric, Procter & Gamble and Hewlett-Packard. Today the talk is of ‘reshoring’ not ‘offshoring’. Germany though has seen its share of industrial production fall. German business also benefits from wages that have stayed low, while its exports have been boosted by a low Euro. Some criticise Germany for a ‘beggar-thy-neighbour’ policy of allowing its exports to dominate the European single market when it should be encouraging greater domestic consumption. China too is advised to produce less and consume more. That might simply be a matter of better balance, but there is also a wider backdrop of criticism to the idea of making things: the arguments that natural, particularly mineral, resources are scarce; that factories pollute.
Can Britain reengineer its economy towards production for export again? Could new technologies like 3D printing move from the level of the hobbyist to usher in a new industrial revolution? How could such a shift even be brought about in an economy where businesses still seem reluctant to invest, where the banks won’t lend, and government, despite being a safe haven in the bond markets, seems to lack the will power to drive through sweeping changes in infrastructure that might support a manufacturing surge? Just what is the right balance to strike when it comes to the question of making stuff?
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director, AlixPartners; manufacturing industry consultant
manufacturing editor, Financial Times; author, The New Industrial Revolution: consumers, globalization and the end of mass production
management consultant; founding member, NY Salon; writer on economics and business
executive director, Jaguar Land Rover
digital business consultant and writer; co-author, Big Potatoes: the London manifesto for innovation
A British team building a car capable of driving beyond 1,000mph has tested the vehicle's rocket engine.Jonathan Amos, BBC News, 3 October 2012
China’s attraction as a global manufacturing base has not worn off yet, but several developments are chipping it away.George Magnus, Financial Times, 13 September 2012
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America’s economy is once again reinventing itselfEconomist, 14 July 2012
The rapid emergence of China and India as prime locations for low-cost manufacturing has led some analysts to conclude that manufacturers in the "old economies" - the U.S., U.K., Germany, and Japan - are being edged out of a profitable future. But if countries that have historically been at the forefront of events in manufacturing can adapt adroitly, opportunities are by no means over.
Peter Marsh, Yale University Press, 25 May 2012
The 'magic' of digital manufacturing could transform our homes and the industries that serve them. But at what cost?John Naughton, Guardian, 13 May 2012