Evan Davis takes on the belief that the UK doesn't make things...
Evan Davis takes on the belief that the UK doesn't make things any more, finding the evidence that we're still, in part, an industrialised nation.
In Made in Britain, a new series co-produced by the BBC and The Open University, Evan Davis tours the UK, visiting a variety of companies to discover why manufacturing accounts for around 12 per cent of the UK's modern economy.
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Inspired by the series, we've developed Visible Trade, an exciting data visualisation tool that allows you to explore 20 years' worth of the UK's imports and exports. You can hone in on particular years, commodities and countries to uncover surprising stories which you can then embed into your blog, social networks, academic essays and more.
Delve into 20 years’ worth of UK export and import data to discover some surprising stories about the UK’s trade relations with the rest of... Launch now: Visible Trade: A UK trade data visualisation tool
Maybe you have some interesting stories about your experiences working in UK exports and imports? If so, share them in the comments section below.
Made In Britain airs on BBC Two at 9pm on Monday 4th July. For broadcast details, visit bbc.co.uk.
Discover why Evan Davis will be flying in the world's most revolutionary jet in the first episode of Made in Britain. Read more : OU on the BBC: Made in Britain - Episode One
Evan Davis argues it's right for Britain to concentrate on excelling in the knowledge economy in his second exploration of what the nation makes Read more : OU on the BBC: Made in Britain - Episode Two
Evan Davis looks at the explosive growth of Britain’s services economy in the third and final part of Made in Britain. Read more : OU on the BBC: Made in Britain - Episode Three
Leslie Budd looks at how, in the game of global trading, Germany appears to be maintaining its winning ways against the UK. Read more : Is British manufacturing still losing on penalties?
Matthew Hinton asks: how has Germany developed its manufacturing dominance? Read more : Learning from Germany’s economic model
Manufacturing is still a major part of the UK economy - and even financial service jobs depend on it remaining vibrant. So how do we... Read more : 'We don't make anything any more': Is it true that the UK is just a giant service centre?
Leslie Budd looks at how the UK economy pays its way in the global economy by exploiting intellectual property (IP). Read more : Can British-owned intellectual property enlighten the British economy?
There's a changing pattern of trade in which services are being bought and sold across national boundaries. Leslie Budd explains. Read more : The Global Trade Trap: Goods or services?
The continued shift from manufacturing to services represents a remarkable transformation in recent years. But is this good or bad news? Read more : What future for the UK service economy?
In this free unit, learn how organisations manage their products and services, including how an existing portfolio of offerings is managed. Read more : Products, services and branding
This free unit will help you to identify and use information in business and management, whether for your work, study or personal purposes. Read more : Finding information in business and management
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I am Head of Economics and Business Studies and a central London school. I am trying to get a copy of 'Made in Britain' to use alongside my teaching as it raises so many pertinent issues. Please can somebody at OU or the BBC tell me how to do this? I have tried to find out and keep getting directed to call centres that cannot help me.
The point about the Chinese making stuff only. This is arrogant silliness from Banking and finance people in London. Someone from this ilk ten years ago told us we don't need screw driver industries (No screwdriver industries and surgeons could not do their work, who would make the table he works on or the scalpel he cuts with) We would manage and they would make. We told said person not to be dumb. Did he and others really think that the Chinese and Indian people would not want their own people in the offices doing their own designs. Did he really believe they thought it would be fine for us to manage and them to make. It was absolutely unbelievable crass stupidity. Penultimately, there is no such thing as inward investment. Once again this is grant aid diddiness. Does anyone really believe that a major company would come to this country to give us money. Money migrates to head office. In other words a company will come here only if it can make a profit. If it can then money will move from this community to where their head office is. I'm a Scot and I know this on a U.K. basis so on the international stage it is just the same (eg. check out the u.k. roads starved of money, oh London has the Olympics). Germany has a strong manufacturing base and is the strongest economy in Europe, not withstanding the fact they were not allowed to waste money on arms after the war. There is too the social implications of mass unemployment as mentioned by another writer.
Lastly on money advice from the Banks, eh! How can they give anyone advice with their record of debt. If it wasn't so serious it would be a comedy. And Evan thought his program good enough to put out. Now I'm having a laugh. His last program should be about how the legal world and that of finance guru's who should apologise to the rest of us for their utter failure in their disciplines and the Universities should get rid of those who taught them. That would help the balance sheet.
This program was nearly there but as usual with most of this academic bunkum it is fundamentally flawed. How many times were we told that Britain like America was an advanced economy, hahahaha, must be code speak for an insolvent one. We have been teaching our children through the Uni's how to lose ownership of assets. Yes currently I think our Uni's have much to be modest about. Imagine saying an economy does not need manufacturing as a main economic driver. Are these people for real. China and India are two of the worlds fastest growing economies precisely because they make things. Sure thing we need design and ideas, it is arguable whether we need marketing but certainly we do need manufacturing. I have used the analogy of the human body before. You have the brain, design, then the body, manufacturing and if you like, the voice for sales. (It does not work separated, ask Mary Queen of Scots). It is an entity that is successful and a business is just then same. Scalability in a system is something where all the entity must be scaled up or down not just parts to suit the moment. Still further it is objects that people use and those which under pin currency so an economy missing manufacturing is like a toilet pan and sewage works missing the low value piping in between. Low value or not and that depends on how you value it the crap wouldn't reach the sewers with the pipe. This program's analysis is really very fundamentally flawed. Cambridge was mentioned as were business clusters, like estates, but the real reason this happens is because of grants. So this means these businesses are not created from a natural market. No for people who are supposed to know what they are on about this program is thoroughly misleading.
Imagine having the brain and mouth but no body. how long would that last. Stupid nonsense.
I have been fortunate enough to have visited China on a regular basis for the past thirty years and I have seen the transformation in that country. I have seen how, during a period when we in the West 'took it easy' and came to take for granted that we were entitled to an easy life of plenty, the Chinese were working incredibly hard and expanding their manufacturing at an astonishing rate.
It did not take a genius to realise that the huge flow of money from the West to China would result in a re-balancing of the world economy. China was becoming rich whilst we were living in denial and on credit.
In the second episode of Evan Davis's excellent three part series he makes the point that we may survive and prosper again if we continue to innovate and design. But this seems to assume that we have some special abilities that the Chinese will continue to rely upon. And this is where I disagree with him.
Most Chinese are hard working, motivated and ambitious and many of them are just as well educated or even better educated than many of us in the West. (Indeed more and more of them are coming to the UK for their education.) So why should they be content to look to us to innovate and design? Why can they not do this themselves? The answer is that they can and they will. Even though the UK has produced and continues to produce some of the best innovations and designs in the world, there is nothing genetic in our make-up that enables us to be any better designers and innovators that the Chinese.
There was a time when businessmen visiting China would find that the Chinese would and could only do what they were told to do and when they would follow instructions to the letter. Nowadays more often that not it is the Chinese who are coming up with the new design and with new products. Today you go to trade fairs in China to look for new products and designs. Previously you would have taken your own designs there.
There is also another way in which our economic future is going to change. Many Chinese are now very wealthy and have money to invest. Some of them are already buying up businesses in the West and this trend is certain to continue. It seems to me very likely that before long many of us in the West will be working for Chinese masters.
Well, after watching the second programme of the series, I'm left with the question ,what do the rest of us do?, those of us who have no possibility of working in the hi-tech, niche manufacturing, services or marketing. How are we supposed to pay our way? after all, we can't all have a computer/science/engineering degree and involve ourselves in a business cluster somewhere within commuting distance of London. So is it tough luck if you happen to live in Methil or Kirkaldy. You want a well paid job: move to the south of England or London
What strikes me, is that we seem to be moving inexorably towards a post-democratic society, that will become rigidly stratified along new class boundaries,those hi tech, media, niche technocratic skills at the apex, essentially the new upper middle class, and the old and unskilled and those who possess the wrong kind of qualifications as the disregarded. The future does not look very appealing from this (my) standpoint.
I know this forum is for MIB, but I thought this relevant. I watched Question Time on Thursday night. It was from Basingstoke. They spent pretty much all night talking about phone hacking etc, then 2 minutes from the end someone asked a question about the loss of Bombardier. I forget exactly what was asked but Dimbleby rushed answers out of everybody ( incidently I thought Bombardier was important enough to have had a good half of the show dedicated to it, but I'm used to dissapointment ), one of which was from Baroness Shirley Williams. She basicly said if you go down the protectionist route you'll end up with the 30's all over again and jobs and investment with foreign firms would be under threat.
I'm no expert but with some investment in our companies surely THEY would be the more efficient ones and win the orders? I don't really see how that could be called protectionism. It's almost as if our country is being deliberatly run down. The Germans invest. What is wrong with investing? This theory of comparative advantage seems to me only a snap shot of the situation. A more long term strategy would recognize that, and discount comparative advantage and antiprotectionism as being a sensible way forward, based on the fact that efficency can be affected through investment. Correct me if I'm wrong.
I also fail to see how foreign firms would take their bat and ball home, if we did the sensible thing and looked after our selves a bit more. After all, they do it don't they.
Davis makes some interesting points. But his overall tenor was complacent, in my view. Britain needs a real renaissance in manufacturing to rebalance its economy PDQ. No use relying on the EU. Get out and sell to the BRIC countries. In the short term a slow recovery rate is to be expected until this is achieved.
A significant reason why Britain lost so much manufacturing industry is the appalling “Theory X” (motivation by fear) management stiles of British companies and the “death wish” of many politically motivated Trade Unions with moronic leaderships. Thank God the Japanese came and showed us the way.
Another significant reason is the poor way Britain is governed. Successive governments (grown lazy by easy money from banks, etc. ) failed to understand the needs of British manufacturing exporters. They need more than lip service. Governments (and banks) should learn from Germany's industrial/financial strategy and practice. See "Learning from Germany’s economic model" and its comments.
Evan Davies has made a very good case for basic manufacturing to be shipped abroad but as, I am sure, has already been said the argument ignores the cost of unemployment in this country. I spent my working in life in one of the basic industries, the foundry and liquid metals industry. Much of this industry has closed in Britain and been transferred abroad. With the best will in the world many of the craftsmen I got to know very well will not find employement in the new high tech industries and the cost of such people being unemployed must surely be taken into account.
The thing that puzzles me more than anything else is that we are not necessarily talking about these jobs being transferred to the Far East but often to other European countries including Germany France and Finland.
For example the latest job losses at Bombardier are not going to developing ecconomies but to buoyment European countries.
Where do we go wrong in this country.
I found the programmes very informing, but I kept wondering where were all the jobs for those people who do not have specialist skills. Those who do get at least 5 A* to C GCSEs will be fine, but what about those who have at least 5 GCSEs below a D grade? Heavy industry used to soak up a lot of unskilled labour and I am not convinced that the service sector can do the same. Poorly skilled and poorly educated people have a right to work and not an automatic right to benefits because they appear to be unemployable.
There are more than a few that have gone through the universities and have come out dafter than they went in. Qualifications are use to exclude people and not include them. Education is an entirely different beast. Some of the wisest people I have met through my life have had no qualifications at all. Just look at the world of finance and legality in the U.K.. They have brought us to our current economic position and many an ordinary housewife could have done a far better job. Have pride you have knowledge untainted by a semi-commercial teaching system. Those in power only have to allow those with no qualifications to get jobs if they have the skills (i.e gained through the likes of apprenticeships) and the the economy would be in a far better state.
I agree with Jon Chubb - It's great we're having this conversation. Let's keep it going. You never know, David Cameron might be reading this and he may actually decide to do something! There have been some enlightening things written by some clever people by the sound of it ( myself not included ). I have enjoyed following this thread. Long may it continue.
I do not think the examples of specialist UK manufacturing shown in the first programme were appropriate. Is it really a good thing to be making weapon systems for export? Having sold them abroad a ‘need’ is created to update to keep ahead of the export! Is it sensible to promote high performance cars for a foreign niche market when we should be looking globally for a sustainable and low carbon future?
The discussion on services in the third programme did not consider whether these provide a basis for long term export earning. Many service activities are potentially mobile. Investment banking is a notable example - and we have been threatened with departure of ‘talent’ if the gross earnings are more fairly taxed. Making things requires a much wider range of skills related to a common cause and is more embedded in the community and its infrastructure. It is hence less mobile and supports a skill base more likely to be relevant to long term industry developments.
It is good that this discussion has started. Let it continue - and with some strategic thinking and planning and action.
I agree with some of the other contributors that this series seemed to skirt round comparisons with other high-wage economies such as France, Italy and Germany when it comes to the decline in UK manufacturing as a fraction of GDP. I think Evan Davis said it is now down to 12% in the UK. I would like to know what it is for the other big three countries in Europe.
The next question would be why is Germany so successful. The fact that this country has to buy trains and locomotives from the USA, Spain, Italy, Japan and Germany when we can make them here is disgraceful. We should be exporting that kind of thing. Nobody is going to believe that we can compete with China for manufacturing low-cost consumer goods and clothing, and we wouldn't want to at the labour rates they have, but for high-end capital goods such as trains, construction equipment and manufacturing plant we should be able to compete with the best. It's all about design, investment and most importantly the motivation to succeed with sufficient prominance given to high-end manufacturing by politicians and economists. We are clearly failing in one or more of these aspects, but this was not covered in Evan's series.
Even for lower-cost products, it is possible to manufacture these in a higher-wage economy by using more automation which again leads to the design and manufacture of robots and other high-tech plant. Last year I visited a nearby bottle manufacturing plant in Scotland, one of the largest in Europe. It was great to see such a large operation, but it was significant that I could find hardly any of the plant designed and manufactured in this country. Much of it seemed to have come from Italy.
Another factor is the lack of UK ownership for many of the remaining manufacturing operations. I worked for over 30 years for an electronics company. It was designing and manufacturing high-end products with around 80 to 90% exported. In the late 1990s we employed over 2000 people, many of whom were in design and marketing. The equipment was manufactured on site so there was a close relationship between design and production. After the high-tech boom collapsed in 2001, the place declined and today the factory is closed. Being part of a multi-national, strategic decisions were taken far away to move production to the Far East and also transfer design jobs away from the UK. Politicians and Evan Davis have said it doesn't matter who owns the company as long as the jobs are here. I disagree. You need to exercise control. Going back to the Thameslink Train contract which Bombardier lost to Siemens, unfortunately the Derby workforce are part of a Canadian company who will make a financial decision, not one based on strategic expertise retained in the UK. The Government's feeble response to this matter, not to mention the earlier IEP train contract for £7.5B, is very disappointing. We need to turn the corner.
One final thought. In last night's episode, Evan interviewed some people in Sunderland about the loss of ship building. The well-worn story is that we can no longer make ships, because other countries can now make them cheaper. Rubbish. How can places like Spain, Italy and Scandinavia build ships? From our house I can see the recently erected gantry crane (from China of course) which is going to be building the Aircraft Carriers at Rosyth. Here's a challenge. When that job's finished, let's start building some more big ships for commercial customers. After a carrier, surely we could build anything. It's all down to design and price. I could go on. What about all the wind turbines we need being imported from Denmark etc? We need to do a lot more to redress the £4B per month deficit we have on trade.
The Davis presentation is a superficial glossy journalistic approach which does not cover the failure over the last forty years plus of Britain to maintain its status as a leading manufacturing nation or even give any useful guide for the future. . Thie decline derives from many factors including complacency, educational policy, lack of an industrial policy and the cultural developments in Britain during this period. Most of all it derives from a lack of political understanding and leadership by our elected representatives who for the most part have no real knowledge of business, exporting, technology or the way in which we have to make our way in a competitive overpopulated world. world. This now even extends to the military commitments and resources now envisaged. One may also doubt the governments understanding of economics and the balance of productive sectors as against "nice" to have social support systems. Labour governments are particularly naive in such considerations after repeated failure since WW2. Even in educational terms British sends out the wrong messages to the young. Even in terms of immigration policy this has led to a low productivity/low value added economy.
As a youngster I recall that certain industries were considered strategic,namely coal,steel agriculture and balances of payments were
always uppermost and a balanced economy was de rigeur, with service industries providing the cream on the top of UK efforts as a trading nation. Where is the reality now? Now we may remember the continuous loss of basic industries, latest is Bombardier.
I am a retired professional engineer/manager who has worked many years abroad including Germany,France etc.
The government and worker organisations and the styles of investment promulgated are at great variance with the UK model. Laissez Faire versus planned capitalism? The simple free enterprise model is an illusion; Think on Japan Germany,France,Brazil,India etc.
What are workers and youth to think when the latest debacle ref Bombardier is so easily talked away. Good Luck Britain!!!
I used to work i very high tech industry untill recently. This industry has almost disapeared from the uk economy mostly because our directors had the same belief as the producers of this show. that it was possible to m,ake money from training the Indians and the chinese and still keep our advantage,expertise and to put it bluntly contracts.we wern't!.If we do not get rid of this idea that the market will always come to us because we are better educated more democratic and or more "british" and stop this gov't from selling our university advantage to these competitors we will be greatly impoverished in the not to distant future.
As someone who has been manufacturing furniture in britain. The british public has been spoilt rotten with prices that would mean1/4 of minimum wage. They have no idea how much effort and creativity it takes to make anything. I am fedup with beauocats sounding clever about money. The city is constantly warping peoples perception of how much things cost with exchange rates. I discovered that my great grandfather was printer in London and one of the things he printed was made in Britian stickers 70 years ago. The things you get from abroard are badly made. Example the surgical instraments that was featured on panorama this week. The things I have made have been sold all across Britain many of them in London. You can see what I made at (commercial website removed by OpenLearn Moderator 06.07.11)
Rather than (as some have asserted) being a party political broadcast for the Tory party, this series was instead a cross-party political broadcast on behalf of the liberal establishment who lack the insight to grasp that laissez-faire capitalism and free trade are not the only, and certainly not the best global economic system. An alternative but perfectly feasible model of principled, socially beneficial protectionism was not elaborated. Nor was it explained that a world trading system that tightly couples countries with very different systems, values and per capita GDP will inevitably lead to the financial imbalances that are now so evident. Incidentally this same tight coupling also undermines the capacity of the west to condemn tyranny irrespective of where it arises.
Most concerning of all however was the failure of the series to explain how Britain’s membership of the WTO, and to a lesser extent the EU will increasingly force the country into the role of an international ‘host nation’, which will be to the detriment of many of its residents. One need look no further than the WTO’s General Agreement in Trade in Services (GATS) Mode 4, and its expression in the abuse of intra-company transfer visas by large Indian IT companies to see that just how far the UK is straying from Iain Duncan-Smith’s recently articulated wish for there to be more, presumably high quality opportunities for British workers.
I was disappointed that Britain was portrayed as a single entity. Much like another commenter I felt the programme could have been made by the Tories.
Britain is now more divided by class - I use the word class as a financial definition as opposed to educational - with more people studying for degrees, and universities acting more like any other business rather than the great educational institutions they once were and degrees devalued by the overprescription of them.
It is obscene to me that events like the Olympics ask for volunteers to run them when the taxpayer funds them in the first place. The only people who benefit from them are top athletes and more particularly the corporations and bigwigs that run them. And they ask for volunteers saying how lucky 'we' are to have them here!
The Banks!!!!!
As someone working and studying part - time I am finding it harder and harder to make ends meet.
The Call/Contact centres featured are , no doubt, full of people grilling old people about debts they've been nagged into in the first place. Or conned into signing obscure misleading contracts.
I also notice that Evan looked distinctly uncomforatble talking to some Asian students about the way that it was more difficult for 'different sorts of people to enter the country'. Do you mean Islamic terrorists and hate preachers Evan????
Oh to have the money to buy a middle class place in a gated community and hope that the Islamic bullies won't come and get me before I can live out my middle/upper class life before we're all talking Arabic and stoning women to death.
Perhaps the series should more properly titled 'Shafted in divided Tory Britain'?
With some of the comments Evan came out with it seemed like a party political broadcast by the tory party: "It was definitly the best route for our economy to take" etc.
My Father says that thatcher and the conservative ideology has done more damage to the UK than Hitler ever did, and that it will take a generation to repair the damage. He was WRONG. It will take TWO generations!
A lot of the points I would like to make have already been made quite eloquently by: Gerald Harrison, Chris Hanley, Nick Young, NOT peter lees.
The conservatives in my view deliberately shafted our manufacturing. With a bit of investment to replace our worn out factories we could have been like Germany now, but no it was a class warfare from thatcher that sold us down the river. The blame rests solely with the conservatives imo with their stubborn view that the markets should take care of themselves. Isn't it patently obvious that if Kit Kat or whatever company is worth buying then it's capable of making profit. So why do we pawn it off to some foreign company, why doesn't the investment come from within our shores? Evan said we benefitted by the investment made by Nestle. That was a one off payment and Nestle continues to profit from it. A school child could work this out surely? This has happened across the board - wholesale asset stripping of our once great nation. maggie broke the railways up into so many pieces deliberatly so the Labour couldn't piece it back together. And all the investment that Osbourne has wanted to take credit for recently was set up by Peter Mandleson ( my hero ). They withdrew help for Lotus cars the other week, great idea! Not to mention withdrawing help for Sheffield Forgemasters. It makes me sick.
What about China's total disregard for our intellectual property? How are we supposed to innovate if China then steals the idea and saturates the market with their dross? I am in the position at the moment, that I am an engineer ( that not only designs and innovates makes things as well here in Britain. in the high end niche Evan spoke about ) and I have a idea I want to take to market but I cannot protect it. So I have to try to sell it quick and try to flood the market before the plagarists attack. This isn't a good state of affairs to nurture our industry. China doesn't give a stuff about us, they just want our knowledge and ideas and we just give it to them like the naive leftist softies we've become. I say we need trade tarriffs and investment for UK industry. As well as some sort of way to protect our IP. So what if it's protectionism? Like I say there are sinking us and they don't give a stuff. I admire the US, at least they have the balls to protect themselves. What are we affraid of, losing the moral high ground because it was the only war reparation we ever got? It's sink or swim time. Come on let's get together and fight this!!!
Whilst it's very neat to eschew manufacturing as 'low value', this model is inherently weak as it relies on other countries retaining control at our expense. Self sufficiency as a nation state, is frankly an afterthought. We were happy to destroy the British countryside in the name of self sufficient food production after the second world war and yet, with manufacturing, our morals appear to be on hold.
Sitting in an office with a CAD programme or at some marketing brainstorming session is all well and good but what happens when countries such as China decide it's no longer worthwhile manufacturing on behalf of western companies?
Evan Davis was keen to emphasise that the Chinese currently only get a small proportion of the revenue stream as manufacturers. It's blatantly obvious that they and others are biding their time, assimilating knowledge and experience and in time, when their own products have been adequately developed, will happily close the door to very same western companies who so willingly gave them that technology and knowledge. A form of accelerated industrial revolution.
When this happens, the companies that sold their souls to maximise profits and others, in their wake who had no choice to try and maintain competiveness, will fail.
A few comments to echo and to add to most of the others. Once again there was no mention of the place that "engineering" has in innovation - and a significant number of PhDs too - it was all about "science". Were you convinced that the ARM design teams were engineers or "designers"? Why are we so afraid to use the term "engineer" in an intellectual, innovation and creative context? All the new "gadgets" (oh how I hate that word!) have to be conceived and brought to a manufactuable stage (TRL6 in technological readiness terms) by a team of bright and committed engineers. There was no mention of the grants available for R&T from the TSB and the EU which are for new partnerships to develop new technologies and then new products for manufacturing. On the topic of manufacturing, what the UK's strategic manufacturing base that we will die in the gutter to defend? Compared with say France, Germany, the USA etc - very little, because there is no strategy, other than to let the market (and only the very best value for shareholders) decide. We've now given away our last capability of manufacturing railway rolling stock, we'll have to make our balance of payments even worse to buy from Germany, and spend money supporting the people made redundant. The UK workforce has the capability and desire to do a lot more hands-on creative activities like manufacturing, rather than just doing service industry work, which is where a significant number of people are being pushed to go. Why has Evan not looked at alternative directions and stratrgies for our technology based industries, instead of accepting where are now and the direction we seem to be going as the only inevitable path? I repeat, if other similar sized European countries can do it, why not the UK, making the best possible use of the technically minded people in the UK, and not forcing them into jobs they're not particularly interested in? I hope there will be a follow up programme addressing the alternatives, but I doubt that anyone in the BBC has the capability of doing that with any credibility.
This is one of the best non-fiction programmes I have seen this year. I just felt one thing very strongly that there is no immediate threat from China to Britain's core USP - creativity and innovation. Because they thrive in an environment which encourages freedom of thought. In other words, in a democracy. A 'yes sir' culture can promote obedience and therefore discipline but for innovation one needs the room to commit mistakes without fear.
India, where I come from, obviously being the biggest democracy poses no such problem. But our upbringing is such where respect and obedience to our elders, mostly parents is higly emphasised. So you have hordes of potential filmmakers, entreprenuers, sportspersons, archeologists, botanists, etc shoved into the streams of engineering or medicine. That's why we are good at hardware and not software because we are good at following and not so-good at original thinking because somebody else always thought for us. And while this mentality is good for enacting or implementing plans with outsouring and hardware industry as excellent examples of success, if India was to really sustain its position long-term, it will need to enourage and invest in innovation.
And I must say that you (creative industry) have this amazing ability to present complex economic subjects as you have tackled in your programme as you have done and that is 'brilliantly entertaining'. I would dump a Tom Cruise movie any day for an Evan Davies programme.
Well Done!!
Shivani
Evan Davis has quite rightly emphasised to need for Britain to concentrate on new area of business that will have high added value. I have the following comments:
- I feel on the basis of my experience (see below) that successful technical innovation requires close linkage between research, development, manufacture and the appreciation of customer/user requirements. Segregation of these functions will not last.
- I feel the Government is not doing enough to promote the need for application of science for manufacturing and needs to recognize that some areas of prospect require ‘seed corn’ funding (notably in regard to ‘green technology’ opportunities).
- As you noted much new manufacturing involves fewer people per unit of output than earlier industry and often requires a higher intellectual rather than craft skill level. This problem needs to be faced for the future.
- There needs to an appreciation of the need to move to a more sustainable future where there is less consumption and less keeping up with ‘the Jones’s’
- It needs to be remembered that ‘the arts’ (theatre, etc) both contribute to the quality of life in the UK and provide good export earnings. This is surely an area of ‘business’ worth noting and promoting.
My own background (see http://www.infostatic.co.uk/JNC-Bio.html) is as a physicist who has been involved in engineering and in manufacturing.
I have come to appreciate the need for good linkage between research and development activities, how things might be made and the need to appreciate user requirements. This has been a very evident requirement in the operation of the small company I ran for 26 years (1983 – 2009) concerned with the design, development, manufacture and marketing of electrostatic measuring instruments and methods of measurement. Yes, it was a small specialist operation – but profitable and with around 60% export. The need was clear for a close linkage between understanding customer needs, how instruments would be used and the creation and development of ideas to achieve this. Development needed to appreciate how, easily and quickly, ideas could be tested, proved and turned into manufactureable instruments. These then needed to be made and promoted to the market.
I find it difficult to believe that good design for manufacturing can be achieved without good feedback from contact with manufacturing experience. Good design must surely start from appreciation both of customer needs and the possibilities to realise ideas in practical and economic ways. I wonder how ARM, for example, achieves this feedback to support its success with microprocessor designs.
I've enjoyed watching the first two episodes of this series, but thus far I'm left with the lingering impression that all the high tech and creative industries at the high value end of the economy can only provide employment opportunities for an educated and in some ways "elite" minority of the overall UK population of working age. Where are the opportunities for the vast bulk of the population who aren't highly educated scientists or creatives to contribute in this high value economy in other words where do what used to be called "blue collar workers" fit into this scheme of things? Maybe the third episode will cover this but if the answer is working in call centres, temporary contract cleaning and other ancillary services, it makes me feel really grateful to have benefited from a good education myself and feel very sorry for those who haven't had this opportunity. That's not to say that working in factories was particularly pleasant either but at least it may have brought people the residual self esteem of paid employment.
The country has a further problem imo in that the perceived status of the scientific/engineering professions we need in the UK to pay our way, has to be elevated in comparison with that of some other professions in particular lawyers and financial services to attract more of this aforementioned "elite" from the UK graduate intake to become scientists and engineers.Alas wage rates in the marketplace tend to mitigate against this (in other words if a highly sort after graduate engineer/scientist can get £40k as a trainee banker but only £25k say as a trainee engineer or scientist which profession are they more likely to plump for, all things being equal?). Perhaps a few more politicians reaching cabinet ministerial level who have genuine scientific/engineering backgrounds and educated understanding of these fields (as opposed to career politicans spending a large chunk of their working lives as parlimentary researchers after graduating :) ) would set a good example for others to follow?
I think the whole concept of the gap of trade is wrong. Britain is doing very well I think. Just look at this article: "iPhone alone added $2 billion to the US' trade deficit with China" (Read more: http://www.businessinsider.com/iphone-impact-on-trade-deficit-2011-1#ixz...). Obviously it is the US company and economy that benefit from the production of iPhone most, not China; but yet, on the surface, iPhone contribute $2 billion to the US trade deficit with China.
As the episode two suggested, there are three parts of production: 1) R&D 2) manufacture and 3) branding and marketing. The manufacture itself is typically low in value, and that is why iPhone is "assembled" in China. But all the research, design, marketing and branding - the high value activities - were made in the US. The British should not worry too much about the so-called "trade deficit" or manufacturing. "Trade deficit" particularly is misleading. British is good at the high value activities which is good. I am not from the UK. I just found it so hilarious that so many comments from the UK are so negative. It sounds like Apple would be better to shut down its iPhone business to narrow the trade deficit between China and US. Well this is of course untrue and deeply wrong. ARM is just another example.
I'm finding this series interesting and informative and set at about the right level for a prime time BBC2 programme. However I agree it is clear that the presenter seems very reluctant to veer away at all from the smooth functioning free market world model full of very rational men and women. I spent a few years working in China latter half of the last decade. I was part of the UK "knowledge" economy - selling design and knowhow for a UK firm in the clean energy sector partly through a strong credible brand and highly qualified workforce. Just the kind of firm this programme seemed to think would be the UK's lifeblood.
What was always clear however from the day I arrived was our presence was part of a very structured local plan to garner knowledge transfer from Western firms such as ours by opening a limited proportion of the market to us, and to have local firms propped up alongside always learning, always supported in catching up. My experience was very typical of most expats I knew; the idea was essentially to enter, ride the wave as a new industry accelerated its growth - and get out before favoured local firms were supported in pushing you out. What was surprising though is that such experiences seemed to surprise UK trade officials when I met them - despite the lessons of the 80s with Japan.
We simply due not apply the same premium to buying locally owned services and produce as almost every other major economy. I believe this is in someways commendable and also to a degree stands us in good sense by making more efficient use of our resources. But there also seems a certain naivety, especially in our government, as to the obstacles faced by our firms in making the theory reach reality. The purchase of our companies by foreign firms (who themselves may well have grown large via heavy protectionism) will bring in capital. But if our own firms are constrained from acting in a similar manner abroad in their areas of expertise then it is hard not to feel there is an absolute loss of value involved.
Oh, and naturally we also are now no longer UK-owned!
I agree with your comments. In the early days of 'diversification' at Harwell there was much emphasis on the value that could arise from marketing intellectual property. I believe this really did not bring in much money. It was realised that what you had to do was to engage with particular customers and do things that would benefit them. Unless you have the experience of turning intellectual ideas into things people want how do you know the value of the ideas?
As Evan Davis says we still make a lot here, but nothing like enough, and import far too much. As others have said, financial services has played far too big a part to the detriment of our society and economy, and helped drive debt to an unsustainable level. Public and private debt can only be paid back from productive enterprise. Our economy has too much regulation, tax is too high, too many on benefits, and too many living on rental income and debt interest. I started work in the mid 1970s when manufacturing was still a large part of the economy. I predicted in the late 1970s that we would add 1 million people on benefits each decade, and we have gone from 2 million to over 5 million now. The reasons are automation, and jobs going overseas as highlighted in the programs. It is all very well adding value, and marketing, but we need jobs for people. Raw capitalism tends to drive efficiency and innovation, but the benefits tend to be concentrated in fewer hands, and we need to provide useful income and employment for our people. I noticed in France in the late 1970s that most people there drove a French car, I don't know if that is still the case. We need the same attitude here.
What a shame Evan Davis chose Pilkington as an example of greatness for what is made in Britain. I work in the domestic glazing industry and know that Pilkington cannot even produce a glass that complies with the current building regulations for replacement windows and doors on an insulation basis. Their products do not give sufficient insulation values to comply to the insulation specified in the 2010 Part L regulations.
Pilkington have instead heavily promoted a corrupt scheme promoted by the GGF and BFRC which spins a yarn about a window energy rating. This is based on a ridiculous exagerration of the benefit of solar gain which is made up . No-one in the GGF , BFRC , Pilkington or any glazing body has been able to identify any published source of climate data that can be used to verify there formulas , not even the data they used to create the formulas.
The Pilkington publicity machine appears far more effective than there current product development departments.
Is this the way forward for british industry? The intrisic value is in inventing spurious arguments to lengthen the shelf life of outdated products rather than invest in new ones ....... well it seems to have worked with Evan Davies !!
Having worked for an international business that had R&D and manufacturing facilities in numerous countries, when it came to introducing new product ranges or reducing capacity, it seemed easier to reduce the workforce in the UK than to do so in France or Germany. I believe I have witnessed UK manufacturing cut back because the work forces in other countries were better protected by legislation than in the UK. As a result, technology and jobs have been developed in or transferred to other European countries to Britain's detriment. How convincing is the case for the relatively free labour market we have? Does it really bring more benefits than disadvantages when compared to say the situation in France and Germany?
I can not let this program pass with out comment, the presenters enthusiasm can not hide
The holes in his argument or the incomplete explanations which have lead him to missing
The point and fatally flawing his logic, point one, he started by asking the question how
Britain could pay its way in the world, but then went on to show us very expensive sports
Cars and jet fighters, the sale of a thousand expensive cars and a hand full of war planes
Will not pay the bills of a nation of 60/70 million people, point two, he then went on to
Suggest that it was inevitable that Britain would have given up on manufacturing in the face
Of competition from extremely low wage countries, but failed to explain how higher wage
Economies such as Japan and Germany have managed to hold on to so much their nut and
Bolt manufacturing, when manufacturing wage costs got too high in Japan some production
Did move other countries, but mainly to only slightly less well countries like Britain, Europe
And the U.S.A. because the new employees in these countries would be able to afford the
Companies products, which would off set the lose of home country employee customers, but
British manufacturing went mainly extremely low wage economies which left both
Unemployed British workers and new low paid over seas workers unable to afford the
Companies goods, British businesses had gone to the trouble of moving production half way
Around the world, adding the cost of transporting raw materials in one direction and finished
Goods in the other gaining a modest reduction in wage costs but no new customers.
Point Three, the presenter suggested we had all benefitted from a fall in the cost of things
Like clothes and electronics but failed to mention the huge increase in housing costs that
Have wiped out any benefits, the presenter also said that most people made redundant from
Manufacturing had eventually found work in the service sector, but glossed over the fact
That most service sector jobs paid far less than manufacturing, this should have been a
Disaster for Britain if the government and the banks had not perpetrated a huge con trick
By persuading the public of the power of property and the miracle of credit, it started with
Ending of the need for a 30% deposit on a hire purchase agreement, and the sale of council
Houses, but successive governments encouraged the use of credit cards and deregulated
The banks, and we ended up with the get rich quick schemes of 100% mortgages for buy to
Let would be property tycoons, so you had the situation were your service sector job does
Not pay enough to pay the bills, not to worry about it, just borrow the money on a credit
Card, and when you max out your credit card pay it off with an extension to your mortgage
Because the value of your house will always keep on going up, especially as the buy to let
Craze has created an artificial shortage of homes to buy, and with all this borrowed money
The nation went shopping which created an enormous service sector, but that party is over
Now and it will take many, many years to pay off all that debt, so we our left with a sick
Financial sector, a grossly over valued property sector and a deflated service sector, and
With a minimal manufacturing sector the hollowness of our economy is exposed, and this
First program has shown no realistic way of filling such a hollow, finally I am heartily sick
Of comments that say it did not matter that we lost some of our lower skilled manufacturing
Jobs, because they will be replaced by highly skilled technically advanced manufacturing or
Highly educated knowledge based computing jobs, but people making such statements are
Missing the point, most of the people in those factories were not highly skilled or highly
Educated, for decades the British education system has been designed to fail millions of its
Citizens so that there would be a regular supply of factory workers and in spite of
Government claims of improvements it is still the fact that a least a third of the nations
Children’s are poorly served by the current education system, in the past this would not
Have mattered has these people would have made a living from factory work, but what
Do we do with the under educated now manufacturing may have gone but
There is no reason why many thousands of low skilled jobs could not be sustained through
Companies operating disassembly lines breaking down items to their basic components, but
As it stands at the moment there is no money in it, and fixing that problem is key to making
The whole system work better I believe the costs of recycling should be built in to the initial
Purchase price, I suggest 1 or 2% on purchase tax to pay for jobs on a manual separation
Line at waste disposal sites to improve recycling efficiency of small items that can not be
Separated by machine, and a premium of between 5 and 10% on all new electrical and
White goods to pay for the complete disassembly of their traded in counterparts on a
Disassembly line which will end the waste of end of life goods and create employment, and
A bond of £500 playable on all new vehicles which will pay for their eventual last journey
Down a disassembly line where they would be broken down to their most basic components
and not just crushed so very little is recycled, that would create a supply of recycled material
but we would need to create the demand therfore i suggest a point of sale surcharge on goods or services that do not meet
An environmentally sustainable test, (Lower Environmentally Sustainable Surcharge)
(L.E.S.S.) The proposal would work some think like this, a frame work is set up over a
Twenty year period with aim of producing a sustainable business model, every two years a
Higher requirement level would be set. We should start with some thing easy say all goods
To be produced using 10% recycled material or 10% renewable energy, any product that
Met this higher standard of sustainability would be kite marked as such, any product that
Did not meet that standard at the end of two years would be subject to a compulsory 25%
Point of sale surcharge, by this method you would cancel out any advantage a company
Might get by sticking to the unsustainable route, and with the bar being raised every two
Years, companies would be putting their suppliers under constant pressure to help them
Meet the new targets. Initially we would concentrate on replacing raw materials with
Recycled ones, and move towards renewable sources of energy, but eventually the system
Could be used to ensure improving quality by having criteria for the durability of goods, or
Requirements that any water used only comes from sources capable of being replenished,
Or even promote more equal competition by having minimum standards when it comes to a
Workforces conditions of service, all good ideas have bad points or at least potential
Problems this one is no exception, such a system would seem to be very complicated
Requiring the definition of each product or service probably by sector, electrical, automotive,
Clothing and so on, plus the need to prove that the requirements had been met, here are
Two examples to show the complexity involved, if a radio was manufactured in the least
Sustainable way imaginable, but was packaged in 100% recycled cardboard, would that
Increase its sustainability score? I would concentrate on the primary description of the item
Concerned, but I am certain this will keep the lawyers busy for years, secondly the (L.E.S.S.)
Scheme called for the use of recycled material and renewable energy, but it is not possible
To recycle the cotton from a shirt to make a new one, but cotton is grown so the
Concentration in this case should be on the water supply and weather it can be replenished,
And the energy used in manufacturing the shirt. Collecting all this information sounds like it
Would be very bureaucratic requiring the services of a whole government department, but I
Envisage something much simpler, I am assuming most modern economies have a
Retail sector similar to that of the U.K. which I will use as an example, 90% of the British
Retail sector is controlled by around twenty companies, half a dozen supermarkets, and a
Further dozen or so groups covering electrical, D.I.Y. furnishings and clothing, each of these
Companies already have robust procedures for checking the quality and consistency of all
The products supplied to them, I think it should be possible to certify the inspectors of all
The main retailers making them responsible for gathering the information about compliance
With the sustainability criteria of each product or service, they would then complete a form
Approving the exemption from the (L.E.S.S.) surcharge or not as the case may be, and
Sending it probably to the treasury which would carry out a few random checks of its own,
Evan Davis's programme was indeed enjoyable and informative, but his reasons for Britains decline in manufacturing were at best generalised, and at worst a balatant mis-representation of the facts.
As emerging nations like India and China grow, it is inevitable that manufacturing in established nations such as Britain will decline. However, a major contributory factor to Britain's unenviable - and I believe a now irreversible - decline in manufacturing, is the short term and blinkered attitude of our politicians to manufacturing/engineering. An attitude that has resulted in the rapid decline of our manufacturing industries. A decline that our politicians either purposely orchestrated (Conservatives) or permitted (Labour) over the last twenty years or so.
It is quite ironic that in the week previous to this programme, the Transport Secretary Theresa Viliers (a former barrister) had announced that a consortium led by Siemens had won the contract to provide carriages for the Thameslink project. The loser was Britain's established train manufactuer Bombardier based in Derby.
Her opposite number in the Labour party, Margaret Becket, was quick to denounce the decision. However, a denouncement that was merely a prime example of the duplicity of our politicians. Labour had snubbed Bombardier the previous year when another multi-billion pound contract was awarded to Hitachi. Not surprising Bombardier is now reviewing it's operations in Derby.
Such a decision, as always was branded by Theresa Villiers as "The best value for the Taxpayer". Only a British politician would consider a contract that results in large scale redundancies, a decline in fiscal income (corporation tax), an increase in fiscal spending (welfare benefits) and an abrupt end to export potential, as the best value for the Taxpayer. Clearly Theresa Villiers is only referring to the select few Taxpayers who are best placed to pay as little tax as possible. It is only British politicians and their business advocates, who preach and practice incessantly a protectionist-free policy.
Such government contracts awarded to foreign competition have directly resulted in the overnight decline of Britain's indigineous textile, heavy vehicle, ship and munitions manufacturers to name but a few. I could list many examples, but when politicians decide that a nation's economic interests are best served by manufacturing it's military uniforms in China, it does not bode well for the future prosperity of this once great nation.
However, the foreign companies that win these orders are always supported - if not subsidised - by their national governments. Not only is this case in Japan, Germany, France et al, but also in the USA.
In the USA any contract awarded for public funded programmes, be they civil or military, has a 60% local content clause. If that is not protectionism, then can someone please explain what is!
A very enjoyable first program by Evan Davis even if it was covered in sugar and rose tinted sunshine. I wonder if at any time Evan will bring in the social consequences of this economic modelling he is obviously so fond of. He has singularly ignored the plight of the 40% of our population, and I suspect, much higher percentages, in other countries around the world that do not enjoy the rewards of being well paid for doing a job, regardless of whether that job is simply stiching cloth or engineering a sports car toy for the very rich.
Will he indeed even hint at the way millions of people are being used as waged slaves, earning a pittance that allows a minority to become a part of an elite so well off that £170,000.00 for a car is simply pocket money.
An elite who have shipped out these "almost menial" jobs, if Evan is to be believed, from Britain and other old European countries to the likes of China, Brazil, India & Mexico, virtually destroying communities at home.
The Industrial Revolution did take many people from the land into factories, but lets not forget that "Development" such as mechanisation destroyed many more jobs on the land and in factories that gave decent employment to many hundreds of thousands of people.
That may have been good for the Banks but did little for the poorer people in society.
Whats happening now is just a further extension of that principle; the big problem in our future is that now there is nothing left to make up what has been lost. Our Government is literally bankrupt, they have put the North East/West and South West into a form of Set Aside deal, throwing small crumbs while they spend more money on tarting up an old railway station in London than they spend on the three named areas in total.
To describe China as " a poor country" is so simplistic as to be unbeliveable. They own so much of the USA's debt that they are pushing for the US doller to be replaced as the universal currency of trade!
I worked in airfreight during the late 70's early 80's , being made redundant after Mexico reneighed on its debt for the 2nd time and our last remaining exporter lost its last client.
Their factory went from employing 9,000 to less than 1,000 today. I have never worked for money since 1983, despite doing everthing interviews stopped after 2 years, I was on each new training scheme that came along, i spent 5 years working for free to simply retrain before ill health overtook me with a heart attack aged 42. The cost being paid by so many people is not acceptable; but middle England has for so long been selfish and simply ignored the plights of others, until of course they got slammed by the banks and their jobs became an export viable position.
I do voluntary community work, it keeps me sane but poor, I am not alone and I expect to be joined by many more in the next ten years as this country falls down the list of important countries.At the moment we are hanging on to the USA's coat tails after being forced to hand over so much of our R&D expertise after the 2nd World War. As China's new role and financial strength continue to expand this country will be staring down the abyss that is now Greece, Portugal, Spain, Ireland. Will Evan speak of that possible destiny?
Made in Britain is something I am passionate about and I believe this programme highlights many of the challenges we face.
For your info there is a group on linkedin.com called Made in Britain.
http://www.linkedin.com/groups?home=&gid=2640729&trk=anet_ug_hm
Also I run www.brandsfrombritain.com where we export British Products to 80 countries.
We need a national campaign for supporting "Made in Britain".
rgs
Denys
Evan Davis could hardly contain himself when he spoke about how cheap mass market consumer goods are nowadays. True, there's been very little in the way of inflation over the last 15 years but are 'cheap' consumer goods necessarily a good thing?
It could be argued that there's no such thing as cheap, as there's always a price to pay. China's human rights and environmental record is extremely questionable. This is in addition to the pollution generated through shipping vast numbers of containers from South East Asia to Western Europe and beyond. What about the communities that implode when large scale 'world' manufacturers pull the plug when their plants are no longer considered economically viable? Seemingly all of this is acceptable in the name of mass consumerism and we all seem happy to turn a blind eye, as long as we get what we want or think we 'need'.
The products we buy 'cheaply' we tend to have little regard for. As they're so 'cheap', why bother to look after them when they can be replaced so easily? This warped 'value' system enhances the culture of waste and disposibility and is the hallmark of our unsustainable society, underpinned by oil.
Sadly, in the UK at least, the desire to own and the willingless to define 'success' and 'happiness' as a series of material acquisitions have led to a selling out of a manufacturing industry in the name of instant gratification.
I had hoped that "Made in Britain" would have concentrated more on just what manufacturing industry we have left. Instead much of the programme dealt with China and (some of) the reasons British industry went into decline.
While the Typhoon aircraft may represent excellent engineering, it is hardly going to earn this country very much in the way of export earnings. And it was rather depressing to see that one of the biggest remaining British manufacturers (BAe) is an arms dealer. Rather difficult to earn a great deal from that trade except by selling to allcomers regardless of the sort of country they are. Saudi Arabia springs to mind.......not exactly a pleasant regime.
McClaren may again be another first class company, but again, the market for £170,000 sports cars is rather limited.
The role of the City and the banks over the years in always seeking a short term return on investment and starving new industry of investment capital was not touched upon. Yes, we can't compete on wages with countries like China. Nor can Germany, but they still have retained much of their industry and manufacturing. They still build mass produced cars to the highest quality. A visit to Stuttgart or Munich to see their motor manufacturers is at once uplifting and depressing as one realises just how GB threw away the opportunities to modernise our factories after the war and learn to build cars that people actually wanted to buy.
Germany still build ships. We have been told it was impossible to compete with Korea or Japan in this area. Well, Germany does. One could go on and on. Siemens, Bosch, Miele, all well known and respected German companies building high quality goods the people want to own. And their employees are all well paid. It is a high wage, high production economy. Germany remains one of the biggest industrial exporters in the world. Not for them the naive belief that their economy can prosper on services alone.
But their banking system also works with industry. Banks specialising in lending to industry are content to accept a return on their capital over a decade or more, something our own institutions won't consider.
It seems to me that we shall never be able to "re-balance" our economy unless the City changes its attitude to lending to industry or the government intervene in some way to make this happen. If we can't expand our manufacturing base from its current shrunken state, I fear for the future economic welfare of the citizens of this country, the relatively few bankers, accountants excepted. Banking, finance, insurance all have an important role to play in our economy but relying on services alone will not be enough for us to earn our way in the world and provide worthwhile skilled jobs as opposed to call centres and shelf stacking in shops.
An amusing programme, as you would expect from Evan Davis, but woefully wrong.
The programme ended the way it should have started: with the £30 billion trade gap.
Having spent almost an hour applauding Britain's move from mass-manufacturing to small, elite, niche production, Evan Davis concludes that in order to close the trade gap we need an extra 36,000 of these small, specialist companies!
How about having 36 companies which are a thousand times larger?
No country can be successful without a mass-manufacturing industry. Evan Davis says we have turned our "car workers into violinists, metaphorically speaking". In reality we have turned our car workers into unemployed parasites.
We have over 9 million people of working age who are classed as 'economically inactive'. These people receive 'Jobseekers Allowance' (formerly known as unemployment benefit) at a rate of about £65 per week. This, coincidentally, is around what they would EARN per week if they were working for £1.50 per hour, like the clothing workers in China.
So if, instead of giving people money to sit on their backsides watching daytime TV, we introduced a system of 'workfare', whereby people HAD to work or they received not a penny, we would not only be able to compete with the likes of China but would also be able to drastically cut taxes (since the government would no longer be spending billions on benefits), which would benefit companies and individuals alike.
Of course, as Britain became wealthier those workers on £1.50 an hour might be able to find better paid work elsewhere, but the point is that they would only move from job to job, NOT from work to unemployment.
There is an alternative route: import duties to prevent low-wage countries being able to undercut us. I do not know of many suits that cost less than £120, so the difference in wage costs per suit between China and Britain - £12, according to the programme - only amounts to an extra 10% on the price of each suit. This is a trivial amount and I cannot believe that any businessman would find the extra £12 an intolerable burden.
So by introducing import duties we could then manufacture in Britain and compete on price (and probably win as there would be lower transport costs), reduce unemployment, cut government expenditure on benefits and hence cut taxes, and therefore cut costs (as companies would pay less corporation tax) and hence increase exports.
Some people argue that if we impose import duties other countries will retaliate, but these import duties would only apply to third-world countries like China, India, Vietnam, etc, not to the first-world countries we export to most, so any trade war with the third-world would not harm us.
Other changes would also be beneficial, such as government rules on banking investment in British companies (or the nationalisation of some banks like RBS and HSBC).
The whole thing boils down to a need for British governments to take a more NATIONALIST AND HANDS-ON approach. As long as we adopt the complacent and indifferent Evan Davis approach Britain will never recover to its position of international industrial pre-eminence.
Amusing to see someone flying around in a jet, or hurtling round a course in a fast car, but how much did that cost, and what is the point? How about some simple facts?
Survival depends on use of assets. Natural or labour. Historically civilisations have aquired anything they needed outside their home shores by force. This has been going on for hundreds of years, and when someone more powerful comes along, they take over, and the once powerful decline.
More recently, it is becoming progressively more difficult to go out and steal what is needed, so countries have, and will have to survive by their assets. Either all countries accept this, or the future presents a gory prospect. Not out of the question, and our politicians need to think about this.
But on a more hopeful note, the last notable plundering was WW2, and a more peaceful capitalisation of assets was " The Industrial Revolution", each of which are now behind us. One hopes the former is never to be repeated, and the latter can never be repeated. So where do we go from here?
The logic presented in the programme ,which I gather was " We must become the leaders in technology exports to survive" ,defeats me. By the same token that we lost our manufacturing base to other nations by their evolution, is it not equally possible that in time, and as was admitted in the programme, an exponentially decreasing time scale, we will therefore lose our technological edge ? So what is proposed in the programme is probably more shortlived than what has happened over the past 30/40 years.
At the end of the 70's our "industrial base" was to give it a technical term, knackered. plant and machinery were old , out of date, out of technology, and renewal thereof was an unimaginable cost, exacerbated by an intransigent work force who wanted everything "now". Maybe, Ms Thatcher realised that there was no quick fix, except to deregularise the finance industry, which needed no capital investment, and would earn us a tidy penny. In the event she was right and for a while, the Las Vegas of finance profited us greatly. Unfortunately, no one turned over the page to see what happens next.
We can debate the ideology of succesive governments. To me the most absurd being a Labour government who actively persue a policy of introducing labour who are prepared to work for lower pay and conditions than those which has been striven for by trade unions for over a centuary, but it will profit us nothing for the future.
The future is " self sufficiency". That of course means trade. We cannot be isolationist. But it does mean taking a broad view of the next few hundred years and planning for it now. Competitive trade has a limited future . We will have to agree with our fellow nations to be the source/provider of certain products and services. Europe is only a start in this process, and world wide will have to follow. To achieve this we will require some outstanding world leaders, hopefully "cometh the day".
Within our confines we need to think seriously about self sufficiency ie energy production,food production, sustainable population figures. The idea that we can obtain anything we need cheaper elsewhere is fast coming to a close. Going back to Ms Thatcher , would it not have been better to have retained the wealth and invested it in development of renewable energy sources and the engineering associated therewith. In the short term, we would be in a strong possition to export into a growth industry with a phenomenal longevity, and in the long term would be providing essential resources.
So suits from China, and 200mph sports cars makes amusing tv, but as a contribution to solving any problems, I have grave doubts, but then we could ask " What is the prupose of tv ?"
Great Programme -enjoyed every minute of the hour.
Manufacturing and Engineering is indeed the backbone of the UK economy - everything we make has to be made on some form of machine or industrial equipment.
Since the 1980s we have seen a decline in all our UK manufactured machine tools, machinery and equipment, that were used to make the Planes, Cars, mining equipment etc., up until that time we were able to compete with the Japanese, Germans etc. in manufacturing excellence. The UK led the World in manufacturing Machine Tools, we exported across the whole world. The majority of machinery is now imported into the UK, initially the machines came from our own home grown entrepeneurs, who not being able to get development backing and finance, had to let the goods be copied by foreign investors and manufactured abroad.
Due to the UK Governments lack and shortsightedness, in backing our UK Manufacturing excellence and development, we have lost out to foreign competition. In my field of manufacturing we have lost all our British made machine tools, these companies now closed down, expertise lost forever -possibly never to return.
We import Millions of Pounds of machine tools every month from China, Taiwan, Germany, Spain, Korea, USA, Italy and many other contries to numerous to mention.
I agree there are a few Machine Tool manufacturers in the UK but these are in the main Japanese Machine Tool Manufacturers, who obliterated our home machine tool manufacturers.
Sadly our UK Governments lack of understanding of how manufacturing works, and how goods are made, their lack of investment in the development of Hi-Tech machinery, has led to the economy in its current state, no wonder we are always in a negative balance of payments - manufacturing is now forced into buying all our Hi-Tech machines & equipment from abroad.
The lack of Government Investment over the past 30 years has led the UK to the situation we are in today.
It would seem that Evan Davis has hit a sweet spot. i would suggest that as well as blaming successive Governments from Thatcher to Cameron - all of them deserving; the Unions, Management and the emergence of Asian and BRIC competition we should also examine the role of finance and the City. Manufacturing, given its global base will not produce anything like an adequate return in under 5 years. This time scale is quite beyond the mind set of Governments and the City of London. For evidence look at the carnage visiited on engineering and manufacturing by some of the City's golden boys throughout the 80's and 90's. Amongst others i would refer to Slater Walker, Hanson Trust, BTR, Williams Holdings, Tonkins, Siebe, FKI and even (post Weinstock) GEC. The strategy was always the same, crudely disguised behind a few headlines about "making the assets sweat; lean and mean operations; world class reactivity etc etc" , strip out the R & D Expenditure, longer term marketing development boost short term cash control and move on to the next acquisition. The result, inevitably destroyed the company in the longer (over 5 years) term. Where are these "world class preditors" nowadays? The last I heard Hanson was a brick company. Not much of an R & D budget there. We should remember that the British Industrial revolution was not funded by the City - it was built on retained profits invested for the long term. The German model with its local banking network, despite its mistakes in the 90's, was more responsive to the demands of its manufacturing and engineering sector. If we are are ever to grow the manufacturing sector again then we may well need some more foreign intervention in taking a longer term view - did I hear that Handelsbanken were now expanding their British network? To test the hypothesis does anyone believe that JCB would have achieved its world leadership if it had not been a private company? As a quoted stock, it would long ago have been pushed into a series of dodgy takeovers or split up or otherwise engineereed into deals that would only benfit the dealmaker.
It is quite clear that this programme was intended for an audience with limited or no experience of working in the manufacturing industry, and skipped over a lot of the issues.
The political view of the manufacturing industry for more than 30 years has been that of declining significance, infavour of financial services and 'creative' industries. Combine this with the growth of short-termism from the financial/investment community (which has led to numerous 'bubbles') and it is crystal clear why the manufacturing industry has struggled so much.
I established my company (Threesixty Extrusion Technology Ltd - (commercial website removed by OpenLearn Moderator 22.06.11)) in September 2008 to manufacture capital equipment for processing metals.........right at the beginning of the financial meltdown! Our business is 100% export, which is supposed to be the area that the government believes will help the economic recovery. However, during this time we had to rely on our customers providing favourable payment terms in order to execute the projects. Not once have we received any support from the UK banks, and this has severely restricted our growth potential (the result of which has been that we cannot employ more staff). We secured a contract in early 2009 worth more than £1M, but the financing had to be processed via a Middle Eastern bank because the UK banks were not interested. We also lost another contract worth almost £1M as a result of our bank's failure to provide any support.
The reason that our manufacturing industry is being bought by foreign companies is because their investment decisions are made based on different criteria. We live in a country where the investor expects a significant return within 2 years, whereas in Germany and many other industrialised nations it is understood that a typical return in the manufacturing industry is 5+ years! Britain has always been known as a nation of inventors, but many of the greatest ideas invented in Britain have been financed by foreign companies........
On a seperate, but related point, there has been mention in some other posts that we import cheap products because the consumer insists on the lowest price, however it is important to understand that the imported products, if purchased directly by the consumer at the prices paid by the supermarkets, would probably be 10 times cheaper! But the shareholders insist on sucking out the dividends, so the supermarket has HUGE margins........the result being that products made in Britain cannot be produced cheaply enough for the shareholder. There are many examples of products that are sold by producers directly to consumers at lower prices than offered by the big retailers..........but they are not so readily available!
Carl Dawe
Managing Director
Threesixty Extrusion Technology Ltd
What a pity that the programme chose to present the way the current UK industrial economy is organised in such positive terms, leading the viewer towards the conclusion that There Is No Alternative to the present way of doing things.
Where we find the British economy in 2011 is the result of the policies zealously pursued by governments between 1979 and 1997, leading to an unsustainable economy based on selfish consumption and short term investment decisions that produce big benefit for a few at the expense of the British economy.
Thus the effects of the political philosophy of the past three decades are skated over, whilst the resulting poor labour relations are highlighted as a feature of this period, with the implication that the labour force, rather than political policies, asset stripping or poor quality management were the problem.
The programme then traces the resurgence of parts of the British industrial base brought about by ideas imported from countries such as Japan and Germany, whose version of capitalism invests highly in social capital and worker participation.
The programme championed the Adams version of capitalism prevalent in the UK and presented the shortcomings of the our economy as inevitable, rather than the consequence of a political ideology.
It is said that countries get the politicians they deserve. It could have been so different and so could this programme.
With everything now seeming to be made in other countries, or owned by foreigners, what happens if we fall out big time with those countries ?
Britain would not have enough manufacturing or farming to at least get us through it.
Due to the minimum wage, we are not allowed to earn less than the limit, yet people in other countries are, even if the company is British like the suit manufacturer.
I would love to be able to get a job earning say £3 an hour, because at the moment i get a lot less than that (i took early retirement, moved, and want to get another job, i am 55), and i'm not entitled to any governmet help (benefits) even though i've always paid my taxes, and have never asked for help before.
If the government would allow workers to opt out like they can with the working time directive, then maybe more people in the UK would be in work, and not have their jobs farmed out.
We need jobs to pay for goods that are made abroad because the companies couln't afford to pay us the money we need to pay for the goods .........
How can you make an hour-long programme about industry and economics without mentioning - not even once - the word "capitalists." Who does Mr. Davis thinks moves the money into and out of UK (and Chinese) industries? The benevolent investment pixies? The inexorable mechanistic ebb and flow of The Great and Powerful Global Market? Willed out of thin air by sheer force of innovation? Or could it have anything to do with people who have power and money making decisions for their own benefit, with no regard to the long-term balance of payments of individual countries? But then I guess any hint that there may be ulterior motives behind the trends of the last several decades would add a complication to a central thesis so stunningly simplistic that I constantly felt the need to check that I hadn't accidentally switched to the CBBC channel.
Brilliant concept for a show and incredibly timely - addresses the burning fear that Britain may not be able to compete with the new world order of emerging superpowers. I'd forgotten about a lot of Britain's areas of R&D expertise, or just assumed that they had been farmed out around the world by now.
The one critique I have of the show is that it's a shame that Evan didn't have the guts to point out the elephant in the room and make the controversial or unpopular point that financial services are just as, if not more, capable of correcting Britain's international trade deficit as manufacturing is. Banking will always be in demand, it's a highly specialized industry that requires high levels of education, and we're one of the best in the world at it. By all means we should support our niche, high-tech manufacturers, but financial services offers much more opportunity for Britain than manufacturing.
While I applaud Evan Davis for producing this programme for prime time TV, I was astonished by his concluding remarks that British manufacturing demise was mainly due to not enough saving by the British meaning that the financial institutions weren't able to finance manufacturing. I would suggest Evan go back and have another look.
The Governments of the major manufacturing countries are much more active in their support for manufacturing compared to the UK. I would put this down in part to most of Political Elite (and Mr. Davis) having studied Politics, Philosophy and Economics at Oxford where clearly manufacturing industry, management and wealth creation are not on the syllabus.
Another key message in the programme was the revolution in management style pioneered by the Japanese. While the British became aware of this in the 1980's we were very slow to adopt the methods outside of the Japanese transplant car companies, this can only be put down to poor management education . Even today, poor management can be seen at the top of big UK organisations. Wouldn't the NHS be different if run like Toyota!!
Hallelujah...at last an intelligent, interesting, informative, uplifting documentary covering the complexities of our economy with an insight into our manufacturing companies past and present.
Evan Davies is the perfect presenter and informs in an intelligent yet easy to understand manner.
Seeing the economy from this perspective made me feel very proud to be British and gives me great hope and confidence in our nations talents.
Glued to the program from start to finish, looking forward to the next two programmes.
Tonight was the first time I have watched this programme and I have to say I felt very much the same as you. I felt proud of my country and its contribution over the years to numerous areas of manufacturing, design, architecture etc etc. I couldn't help thinking at the end of this that we had something to learn from history and was drawn to using a simile around farming. Evan said in his summation that we need to look at our economy with a view to being less reliant on a single industry to provide our income. Like our farmers from years ago, they discovered that crop rotation was the best way to get the most from the soils, understanding the requirements of their crops and how they each demand different things they were able to improve yields. So now we need to do the same in our industries, by better understanding of the demands from each commodity we will be able to rotate the industries to maximise profitability. But then what do I know?
Tonight was the first time I have watched this programme and I have to say I felt very much the same as you. I felt proud of my country and its contribution over the years to numerous areas of manufacturing, design, architecture etc etc. I couldn't help thinking at the end of this that we had something to learn from history and was drawn to using a simile around farming. Evan said in his summation that we need to look at our economy with a view to being less reliant on a single industry to provide our income. Like our farmers from years ago, they discovered that crop rotation was the best way to get the most from the soils, understanding the requirements of their crops and how they each demand different things they were able to improve yields. So now we need to do the same in our industries, by better understanding of the demands from each commodity we will be able to rotate the industries to maximise profitability. But then what do I know?
An interesting start, but Evan missed the opportunity time and time again, until near the end of this programme, to emphasise the need to innovate and not just to adapt, to keep ahead of the game. Innovation and continuous improvement are as essential to manufacturing as they are to new engineering designs, which are untimately manufactured. It's not clear to me, until I see the next programme, why innovation will only be the topic in the second programme. Engineering and manufacturing innovation needs long term R&D investment, and does not necessarily produce returns in 2 years - this is a major mistake that our investment sources have made in the past and continue to make today - they want a fast return, and are not in it for the long haul, because the average financier does not understand (or have much regard for) engineering. I hope there will be some comparisons with France and Germany, where with the right approach to investment, they still own their high volume car design and manufacturing businesses.
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