Our fourth D&T provocation was delivered by our course Head, Craig Whittet, and focused on the apparent demise of skilled traditional manufacturing.
In a general sense, it is clear that the UK is losing out if manufacturing is to be the goal. Since the 1980's, the country has shifted to a service based economy, which has seen a decline in the importance of our manufacturing industries in favour of other sectors such as banking.
The United States and France have joined us in this slump, and while these closest cousins continue to do well generally as an economy, they have failed to maintain strong manufacturing bases in the same way that developed nations like Germany and Japan, and recently developed nations like China and South Korea have.
This means that as a country we rely heavily on imports, and have a large deficit in terms of our Imports and Exports, which has developed dramatically over the last 30 years.
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So what's the problem? Unemployment itself has not become a greater problem, it is just that these jobs have shifted into the services sector. Economies based on services may be more susceptible to shocks such as the economic crash of 2008. There is also the question of if individuals in the workplace are more dispensable if they are not learning hard, trade, skills.
As the UK and others developed, mines closed and manufacturing of everyday goods was moved to the second world. This is almost inevitable, apart from in luxury items, because most things need to be cheap and manufactured in high numbers. Look at dyson, who began production in the UK, but as the focus of the brand became more international, focusing on selling products in America and Asia, it made little sense to produce in the UK, from a logistical point of view if not any other.
How do we combat this problem? Looking back at the intial graphs, It is clear Germany can be a comparable model. Compared to it's friends, Germany bounced back from the crash fairly easily, It has a trade surplus, and an economy more structured around manufacturing and exports. What does it do differently?
99% of all German companies, and 40% of manufactured goods exported, belong to the German "Mittelstand," which are small and medium-sized enterprises, and are mostly family-owned. While China, Korea and any number of emerging low-labour cost countries such as Vietnam and Malaysia take on more of the responsibility for the production of our everyday goods, Germany has carved out a niche with it's Mittelstand, which are under-the-radar companies producing high-quality goods.
With razor-sharp focus, and the benefit of being progressive, technological and advanced, these companies show a way of including manufacturing in a mixed, developed, western economy. One way of retaining manufacturing in the UK would be to follow the Mittelstand model, which focuses on Business to Business supply of anonymous but important high-quality goods.
In a general sense, it is clear that the UK is losing out if manufacturing is to be the goal. Since the 1980's, the country has shifted to a service based economy, which has seen a decline in the importance of our manufacturing industries in favour of other sectors such as banking.
The United States and France have joined us in this slump, and while these closest cousins continue to do well generally as an economy, they have failed to maintain strong manufacturing bases in the same way that developed nations like Germany and Japan, and recently developed nations like China and South Korea have.
This means that as a country we rely heavily on imports, and have a large deficit in terms of our Imports and Exports, which has developed dramatically over the last 30 years.
This change can also be seen in terms of employment, which was the main focus of the talk.
As the UK and others developed, mines closed and manufacturing of everyday goods was moved to the second world. This is almost inevitable, apart from in luxury items, because most things need to be cheap and manufactured in high numbers. Look at dyson, who began production in the UK, but as the focus of the brand became more international, focusing on selling products in America and Asia, it made little sense to produce in the UK, from a logistical point of view if not any other.
How do we combat this problem? Looking back at the intial graphs, It is clear Germany can be a comparable model. Compared to it's friends, Germany bounced back from the crash fairly easily, It has a trade surplus, and an economy more structured around manufacturing and exports. What does it do differently?
99% of all German companies, and 40% of manufactured goods exported, belong to the German "Mittelstand," which are small and medium-sized enterprises, and are mostly family-owned. While China, Korea and any number of emerging low-labour cost countries such as Vietnam and Malaysia take on more of the responsibility for the production of our everyday goods, Germany has carved out a niche with it's Mittelstand, which are under-the-radar companies producing high-quality goods.
"Most of these companies are family-owned and based in small towns, yet they hold market shares of up to 90% in worldwide markets niches. Hauni (cigarette machines), Webasto (sunroofs and auxiliary heating systems for cars), or Dorma (door control hardware and systems; moveable walls) may not be household names, but they are leading global competitors in their respective industries" - The German Miracle Keeps Running
With razor-sharp focus, and the benefit of being progressive, technological and advanced, these companies show a way of including manufacturing in a mixed, developed, western economy. One way of retaining manufacturing in the UK would be to follow the Mittelstand model, which focuses on Business to Business supply of anonymous but important high-quality goods.
