Jon Excell
Editor
The Engineer
With or without the pre-Christmas snow, it’s generally agreed that the latest economic reports would still be looking pretty bleak. Indeed, the fact that anyone’s even thinking at all seriously about the weather playing a role is a reminder of the economy’s fragile state. But while concerns deepen that we could be about to re-enter recession, the continued growth of UK manufacturing is a cause for cautious optimism.
And if ever there was a reminder that engineering and technology should be at the heart of the UK’s recovery then surely this is it.
In recent weeks it does appear that the government has stepped up its dialogue with industry. Earlier in January, the London launch of Sheffield’s forthcoming Global Manufacturing festival was awash with MPs, while just last week BIS invited the UK’s business leaders to a manufacturing summit to discuss how the government could help UK firms make the most of opportunities in manufacturing.
Despite this momentum, the government’s industry-friendly rhetoric is not all that different from its predecessor’s. What is different is the ever-present whiff of austerity. While not so long ago each new announcement was accompanied by the sound of Peter Mandelson scribbling in his cheque book, the government’s industry dealings are now rather more frugal. Sure, there are still investment announcements, but one of the chief recommendations emerging from last week’s summit was the suggestion that the UK’s manufacturers address outdated perceptions of engineering by throwing open their doors to youngsters. A laudable aim, but not something that’s going to have an impact overnight.
“The fact that anyone is even thinking at all seriously about the weather’s role is a reminder of the economy’s fragility”
Conveniently for the government, however, the message from industry appears to be that it needn’t cost a fortune to advance UK manufacturing; that creating the right conditions and removing the barriers to economic growth doesn’t have to be expensive.
It’s a point that crops up in a number of our recent reports. For instance, in our report Growth industries: the future for the UK’s emerging technology sectors, Martin Sweeting, a key figure in the UK’s buoyant space sector, says a supportive tax structure is more important than government handouts. Elsewhere, optoelectronics pioneer Prof David Payne says the best thing government can do is help create an environment in which innovation can thrive and then stand well back.
Whether government is creating the right conditions for growth is open to question. In his valedictory speech last week – while singling out manufacturing as a bright spot – outgoing CBI boss Richard Lambert slammed the coalition’s growth plan as vague and careless. Against such criticisms, George Osborne’s insistence that the snow is to blame for the recent contraction looks increasingly wide of the mark. Which, considering there’s supposed to be more snow on the way, should be a big relief to all of us.
It’s interesting that there is a trend to think an ever-growing economy is a good thing. It can be taken that an increase in manufacturing output will involve an increase in energy and raw product usage. Is this really what we should be looking for in a time of global warming and over population?
Another measure of ‘economic’ success is required- The classic of how many hours you have to work to be able to purchase a bottle of whisky is a good one!
What we really need is a measure of economic activity that has a ‘quality of life’ and ‘damage to the environment’ factored in.
I’m certainly no Green, just a lemming watcher!
I certainly agree that a supportive tax structure is another way of ensuring success, instead of spending taxpayers money. Lessons need learning by all parties on this issue,Labour thought it could change things by throwing money at it.
Money needs spending in critical areas, namely development, this would ensure technology remains, and is manufactured in the UK. This alone would increase exports, and alter our balance of payments.
One other area is “transferable skills”, employers need to be more aware of this and work with people with transferable skills. Training one person with considerable skills and experience is preferable, and more cost effective to industry. This has the added advantage of having additional skills and experience in personnel with transferable skills, and could only be a good thing for an employer.
When the government stop talking and start putting in clearly defined changes to encourage industry, then I will believe they are willing to do the right thing.
Regulation is still getting in the way, especially directives like RoHS revisited, which seems likely to add a large admin load. Typically the details aren’t finalised yet although it is due to come into force in May.
Ok, this is a EU measure and I agree with the environmental need for it but its implementation is still in the hands of the government, who are fumbling it just like the implementation of the WEEE directive.
Cut the red tape and cost of employment, create a positive tax regime. Stand back and don’t interfere, no ‘big’ projects, let manufaturing thrive in it’s own space and don’t meddle with it. Just give it good conditions to work in.
“Despite this momentum, the government’s industry-friendly rhetoric is not all that different from its predecessor’s”
As a retired engineer I can add that I’ve been reading this kind of thing since the 1950s and I’ve watched the decline in almost all areas of UK manufacturing. To put the UK back on track in manufacturing would need skills and experience that these ministers don’t have.
Are we going to compete with Intel, IBM, Cisco, Nokia, Siemens, BMW, Toyota, Mitsubishi, Panasonic, Samsung, LG?
On my last contract some six years ago saw China Petroleum build a major crude oil gathering centre with mind boggling efficiency, UK firms just couldn’t compete in spite of having advantages in language, contacts and old boys.
One of the key things holding growth back, particularly for small companies, is the lack of access to finance. Banks seem uninterested in playing their part in the recovery and I am not holding my breath over Project Merlin – this will only address Access to Finance for companies with £10M T/O
I work for a business loans company – we have seen a huge uptick in demand from manufacturers who are starved of working capital.
http://www.stevegrice.wordpress.com
The conditions in Australia are very similar to UK especially the total lack of industrial understanding and capability in our politicians. They can see no further than the next election which here is every three years.
Small business has to beg for finance and the small business owner has to use his house as a loan guarantee. I have never heard of a major company director being subject to the same condition.