There is no doubt that the pace of change affecting engineering and manufacturing is quickening, with important implications for government and economic policy.
The UK engineering industry is perhaps more exposed to the increasingly rapid changes in technology and globalisation than any other sector. Currently, 60% of its £160bn annual sales are exported. Competition from western industrialised nations, eastern Europe and Asia and Latin America is becoming even more fierce, despite economic difficulties. The only way for UK industry to prosper in such a scenario is to produce more higher-value goods.
Since the UK’s emergence from the ERM crisis of 1992, national debate on the economy and the place of the manufacturing sector within it has been somewhat muted. There is little doubt, however, that we are facing the creation of a twin-track, imbalanced economy, with industry’s interests submerged below those of the service sector. How often do we hear the view that manufacturing doesn’t matter as it only accounts for around a quarter of the economy?
This argument, coupled with what seems to be the constant heckling of industry’s supposed poor productivity and low skills, only adds to the perception that engineering and manufacturing are of little or no importance. Yet according to a reputable comparative study of the engineering sector, British and German productivity between 1960 and 1990 managed a brisk growth rate of 3% and 4% a year, on average. US productivity growth rates during the same period were only 2%.
This suggests quite a different picture, with evidence by the UK of a quite significant effort to catch up on the world’s industrial productivity leader.
It can plausibly be argued that the export-intensive UK engineering and manufacturing sector is highly competitive. For this reason, it is vital that government and policy makers don’t fall for the negative image of manufacturing and engineering reinforced by the media, with its constant focus on plant closures (or threats of them) and decline. We must have an open and public debate about the exact contribution of our crucial sector of the UK economy.
Beneath the public face of Parliament, a network of specialist groups exist to ensure that the interests of our wealth-creating sectors are heard and the issues that affect them are adequately debated.
The re-launched Associate Parliamentary Engineering Group is one such group which will play a vital role in ensuring this debate is not lost among my fellow parliamentarians. Through a series of presentations from high-profile figures, the group will debate vital issues such as competitiveness, innovation and sustainable development, helping to raise the profile of engineering and ensure that its longstanding and vital contribution to the UK economy is not lost in the emphasis on the newer industries.
We would all like to see the continued emergence of high-tech UK manufacturing niches. But these glamorous areas will take years to gain the critical mass necessary to generate enough wealth to sustain the entire economy.
In the meantime, that unsung sector, the middle-sized, medium-technology industries, will continue to function and make their vital contribution to the health of the economy. The pump-makers, bearing manufacturers and machine tool industries will continue to compete with their low-cost, high-quality products needed in our increasingly technically driven world.
As well as planning the shape of tomorrow’s economy, the Government needs to take account of today’s complex industrial realities. Unnecessary gloom and premature defeatism about the UK’s industrial performance should not be accepted without question.
It may be unfashionable to say so but, for the time being, we depend on the proven wealth generation of our existing industries more than we may care to think.
The Associate Parliamentary Engineering Group will play a vital role in ensuring this debate is not lost among my fellow parliamentarians.
Bill Olner is MP for Nuneaton