The myth of Britain's manufacturing decline Woe unto us for we don't make anything any more. We've given up on manufacturing and that's what ails the UK economy. We must therefore invest heavily in a renaissance of making things that we can drop on our feet and all will be right with the world. You don't have to be all that much of a newspaper fanatic to recognise that …
All good stuff. It seems to me that the other overlooked effect is that of outsourcing of non-core functions. Whereas previously all the 60,000+ people who work for my firm in the UK would have had a Standard Industry Code related to manufacturing, a whole load of them are now counted as service industry types. These people (catering, cleaning, IT, HR, to name but a few) still do the same jobs, many of them at the same desks - just for a different employer.
Nothing has changed, but thousands of people have been moved from manufacturing to services.
I work down at the sharp end of manufacturing, in amonst the sub-contractors who actually bash out the widgets.
In 1989 the company employed 35 people for the widget bashing, now we're down to 17.
Thank mostly to the CNC machines and robots I and 6 others have to cope with.
And we turn over and make money money now than we've ever done.
So who's been lost, certainly not the high skilled robot programmers like myself, only the non-skilled people have been lost along the way.
Who swell the ranks of the employed, while the survivors have to work upto 60 hrs a week in order to keep up with production
And thats the real truth of the 'productivity gains' of the past 20 years in any business
.. though I'm still not convinced.
From the graph (all bow and scrape to the statistics) it looks like from 1975 to now our manufacturing wottsit has gone up from 80 "thingies" to a bit over 100. Okaaaay. Here comes the "but". I have a distinct feeling that over those past 35 years prices, wages, GDP and most of all beer, has increased far, far more.
I know for sure that when I started university in 1975 a pint cost 18p. Compare that to todays £2.50 (ish) and that's a long way off a rise from 80 to 100 thingies. Same with rent: £7.50 a week then, 'king millions now. So although the economists and statisticians may well pat themselves on the back with a reported 25% increase in wotsits over the past 35 years, everything else has gone up by 1000-1500%. While the graph might be index-linked, it doesn't say so - so it seems to show that in relation to everything else manufacturing has gone down over the years.
Anyway, it's not just how many wotsits we make that matters: it's how many we can sell to all the foreigners, to earn the money we need to buy their (cheaper) wotsits. Economic advantage is fine, but it does require you to have some goods to trade, to get that advantage.
"We've moved up the value chain, from simple stuff to complex stuff and people are willing to pay high amounts for that value we've created in complexity (that they are willing to pay is the definition of having created the value)."
And the really complex stuff which is easily transferred and used abroad, creating overwhelming changed home advantage for foreigners and infidels and capital fortunes for real complex stuff makers/wheelers and dealers, becomes a valuable piece of merchandise, which is invariably also flexible Intellectual Property for all of the most lucrative of deals.
There are some red-eyed people lounging around the Ministry of Economy, all holding flash cards in hands, in unexplainable thirst for quite different kinds of information. They don't have the connection on desktops. Their supervised requests can really disturb some of the external IP-services' features and lead to a decline in British MetaData Manufacturing (-:
As long as I remember, anything manufactured with a British label was outstanding. Now it's more expensive then, though still, good. China has really a cheaper stuff as one could evidence it (talk about material things)... wind turbines and such... sadly, it goes titsup often...
* http://en.wikipedia.org/wiki/Kin-dza-dza! , fansub http://video.google.ru/videoplay?docid=-2251461878127683608#
They do say, statistics, statistics and damn lies. What you have fully failed to take into account is the benefit of having a balanced economy, a good solid foundation in the heavy industries, an ability to be self reliant. To make our own steel, our own ships, etc. If you look at the history of this country, our island has been besieged with alarming regularity. If we lose the ability to make things, not just the fancy stuff, the basic stuff, then we loose the ability to defend ourselves. We cannot rely on the USA to be our arsenal of democracy for ever. Our ability to build ships has been decimated, lost on the Tyne, the Wear, the Clyde, etc. Folly for an island nation. Manufacturing also builds and maintains communities, Maggie destroyed the heavy industries, whilst our EU partners sorted out and supported theirs. France protected their auto industry as being "nationally strategic", we let ours whither and die. Billions for bankers, bugger all for industry.
Whilst a smaller more professional workforce may mean higher value product, there is less of it. And it will not take long for those countries like China, India, Brazil, etc to catch up. Then what do you have left? They'll design your jet engine for a song, and off course have a captive, protected, home based market to sell to. China is already starting to build Airliners, with foreign engines, for now.
A country needs to have a full suite of industrial capabilities, otherwise you are not playing with a full pack.
for doing what she had to do, the country was in ruins after the last labour government almost bankrupted us (not the first time either).
if you had unions almost as powerful as the government itself, threatening and holding companies to ransom, the BLOOD OF THE COUNTRY being held ransom by some sweaty thugs with their own political agenda, what would you do?
these guys say they represent the people, but as the old saying goes, Arthur Scargill started with a small house and a big union and finished with a small union and a big house.
you think they are fighting for you???? unions, at a certain size and capacity, do good for the workers, but when they get over a certain size, they start to become political and ultimately they start to become ambitious. A union should always work for the workers, never for themselves.
so when margaret thatcher came to power, she HAD to destroy them, the old industries, didnt want to move, they were happy, comfy, greedy and powerful, thatcher showed them what they really were, weak and unwilling to change.
in the 1970's britain was the sick man of europe, in the 1980's britain was the political powerhouse of europe, even the french bowed to her, why? because she had the balls to do things the others would not.
during the 1990's the tories became complacent and were replaced, by what? are you going to defend the labour government now?
EVERY and ALL labour governments that come to power, ruin this country, it took the tories to save us, it'll take the tories to save us again.
DONT VOTE LABOUR (you like mr gordon brown??)
"If we lose the ability to make things, not just the fancy stuff, the basic stuff, then we loose the ability to defend ourselves. We cannot rely on the USA to be our arsenal of democracy for ever."
Well at least the UK still make shed-loads of guns, ammo, and other military paraphernalia which we *could* use to defend ourselves (although I'd gladly see the back of this trade's exports).
I fully agree with the main sentiment of your post. Successive governments have done little to bolster any possibility of making us self reliant. Tony Blair's "service economy" even promoted the idea of relying on other countries as being a good thing. Not that that surprises me in any way (coming from TB).
It may surprise you to learn this, but shipbuilding these days is not just about blokes in flat caps bashing in rivets - ships are incredibly complex high-tech devices. Actually welding the hull together (a highly complex process in itself - with high-value skilled welders commanding muchos £) accounts for IIRC 1/3rd of the value of the ship.
And incidentally, I may be some young upstart, born in the year the miners went out on strike, but I'm given to understand the British Car industry suicided itself with godawful product, and this is after governments of both colours tried to 'protect' the industry.
Incidentally Brazil has been building airliners for years.
And yes, I work at sharp end of manufacturing - building high-value products for the oil industry.
"A country needs to have a full suite of industrial capabilities, otherwise you are not playing with a full pack." .... Anonymous Coward Posted Monday 22nd February 2010 12:46 GMT
Or Control Banking and the Money Supply, AC, then you can buy whatever you need from whomever you wish to feed although you would need to ensure that they would always wish to feed you your needs for the paper you sell them.
Good piece, very interesting, but of course you miss the key point to square the circle, or hexagon the triangle, or whatever. While your points are all correct, it's not value that votes, it's people, and so the politicians break it down to 'there are fewer people employed by manufacturing' = 'there's less manufacturing in the UK'.
A desirable solution for them would involve every single man woman and child making grommits, or, conceivably, spending a huge premium on buying overpriced armaments from BAE - essentially paying to keep voters in work. Which joins up nicely with Lewis's work...
In all seriousness? I'd prefer to pay them to watch Trisha. Better that than waste resources building huge mountains of products that no-one wants or needs.
In sci-fi, when humankind is freed from the slavery of work by machine labour, the result is a utopian society. In the real world, when humankind is freed from the slavery of work by machine labour, the result is unemployment, poverty and soaring profits for the shareholders.
In Sci-Fi, of the type you are talking about, nobody has to work as there are robots for every job, which is probably a requirement to achive a utopian society else somebody still has to be the poor sod getting out of bed to go to work.
In my childhood, with my simplified view of the world, I remember thinking that it would be a good idea if people worked until they could afford to buy a robot that could do their job then have the robot earn their wages for the rest of their life.
When I worked out that it would not be quite that simple my next idea was that factories, companies and manufacturers that use robots/machines to do work that previously employed people should pay high taxes to cover the unemployment benefits required.
Exactly. Voters don't care about the value of the manufacturing industry, they care about, "Am I getting some of the value of this?"
It is no good having an increasingly productive industry if the populace are not seeing an increase in median GDP. Note median and not average.
Wealth Increases for existing rich people do not trickle down fast enough to the satisfaction of the average worker, despite what groups like the USA republican party would have one believe.
Yeah. We used to give our bombers away, in the 1940s. Today, we're one of the worlds leading Jet-bomber-exporting nations.So profitable is this business, in fact, that our own forces can't afford our prices. And, as the article points out, not only do we sell jet bombers, we sell the ideas that make the jet bombers of tomorrow possible (We also have a lucrative line in highly functional torture equipment and non-funcional magic bomb detectors, but let's try and concentrate on the positives, here).
Britain: we have no coal or steel, but we'll sell you a bomber, soon as look at you.
"If we can manufacture using fewer people then there are more people to go off and do other things: write Grand Theft Auto, wipe babies' bottoms, whatever. Thus we can have, as a result of this rising productivity, more things to enjoy: video games and clean and smiling babies."
Sit on the dole in formerly industrial towns that no longer offer any meaningful employment opportunities. What's the economic and social cost of having a few million permanently out of work in structural unemployment, whether it be dole or invalidity, I wonder?
I used to customize control systems for the feedstuffs industry - which basically control the whole factory.
Once on a site visit I remarked on the spookily empty canteen - large room, one or 2 people in. The customer/supervisor who was with me said 'yeah, it's these control systems you lot put in - we used to have 50 people working here'. The shift was being run 2 people at any one time and it was obvious there was still time to do the Sun crossword.
This was on the 80s - so where automation will take us in the future is anyone's guess.
So the drop of 10% in the value of manufacturing between 1978 and 1982 is just pure coincidence then?
Would be interesting to see what the growth in value of manufacturing is for a similar period for countries which didn't make significant cuts in their heavy industries at the start of the 80's - see if Maggie's cuts enabled better growth of manufacturing in the long term, or if the reduction during the 80's has simply held down the comparative value of British manufacturing.
1978, Labour government in power. 1979, the "Winter Of Discontent" and Labour government still in power for first half of year. 1979 to 1982, turning around a huge deficit and ending a recession ... not done in a day, is it?
Also, note how the line has been flat since 1997. Coincidence?
I should forward this to my FiL who's still very much stuck in the 1970s.
If I had a penny for every time he's blamed the "demise" of manufacturing on our problems...
Unfortunately, he would neither read or believe this article unless it was printed by the Daily Fail. Obviously that ain't gonna happen anytime soon.
Statistics can be manipulated into whatever you want them to be.
Productivity and value may well be up, but the number of people out of work keeps rising .. so it seems that the 'other' jobs you suggest people can move into in reality aren't actually there.
and another bone of contention of mine, not mentioned here and slightly relevant, the statistics used by the government to tell us how many people are unemployed only counts those who are supposedly actively lookig for work, i.e. those claiming jobseekers allowance.
it does not take into consideration those on other benefits (or out of work and not claiming) but are more than able to work, giving us a very skewed figure to base our view on.
Personally i'm in favour of forcing all British companies providing services within Britain to employ people based in Britain (no outsourcing !) to provide those services.
Although 'we' still make things in the UK, almost all of the heavy manufacturing businesses are foreign-owned.
This means that we are very vulnerable to off-shoring of those industries, Corus being a prime example. Any slight downturn in the world economy makes the UK a relatively expensive place to make things. As India and China now own most of 'our' heavy industry, we are dependent on them believing that 'Made in Britain' gives their products a certain cachet.
Now you've convinced us all - let's just carry on as we are and we can be assured of a bright future! Everyone gets richer, no-one made homeless and poverty is a thing of the past. Ah, but that's not how it looks, is it?
http://www.telegraph.co.uk/finance/economics/5291482/Gap-between-rich-and-poor-grows-to-record-levels-official-figures-show.html (note that this is from your own party and published in your own rag)
Who cares if manufacturing output is up (and I for one would also like to see an inflation adjusted grap) when it only benefits the few?
JS
Bill - because he's loving it!
I assume that the rest of the world, including the United States, has leapt forward in production and productivity and left us behind.
As for the growing slice of the economy that isn't manufacturing: apparently it's banking and financial services.
Good luck selling THAT service to the world from now on.
posting it up, there is a critical flaw in it.
quote: "If we can manufacture using fewer people then there are more people to go off and do other things: write Grand Theft Auto, wipe babies' bottoms, whatever. Thus we can have, as a result of this rising productivity, more things to enjoy: video games and clean and smiling babies. This is another definition of getting richer. We've got two or three things rather than the mere one we had before."
ok, the article is good, but this bit turns the head a little. lets elaborate.
manufacturing can be achieved with less people than before, because each person has increased the value of what they produce, we don't produce tea towels anymore, because they are low value products, all that moved to india, etc, etc, etc.
but the problem with this is that there are now more people making video games and clean babies bottoms than there was before, the problem with this is that there are only so many of those required.
so we get a huge number of unemployable people because manufacturing has no use for them, not everyone can make xbox games and not everyone is suitable to wipe babies bottoms, so for those poor folk who basically have almost no value to bring the world, whose existence would have been satisfied with packing boxes and working a robot, basically, are unemployed and unemployable because now there are 100,000 of them and only 20,000 jobs (for example).
so yes, the argument is correct, our manufacturing output has not dropped, but our unemployment rate seems to have, why? because we have moved up the value chain, but our employment workforce has not moved with it. we are not a nation of computer programmers, roll royce engine builders, bmw car mechanics with advanced computer expertise.
lots of people are still the kind who are only fit to put things into boxes, or make tea towels.
also this ignores the fact that the wealth created is concentrated in those who are not sharing it with the rest of us, so there is no "we" in the argument, WE don't benefit from this manufacturing shift, THEY do and most people would agree that the country loses if the majority loses, so if a minority of people are accumulating more wealth per unit of manufacturing than before, that means a majority of people are losing wealth, the country as a whole singular body, loses.
apart from that, good article
"the problem with this is that there are only so many of those required."
No, that's not the main problem: we still *need* those "low-value" stuff, like T-shirts, cars, trains, screwdrivers... If they are manufactured elsewhere, we need to *pay* for them. If they are manufactured locally, they are part of the local economy. In other words, if you buy low-value stuff locally, the local community keeps the value (however low-grade) but if you buy it from abroad - because it's too low value for wannabee technocrats - the local community looses that value !
The point is, and Tim Worstall on CommentIsFree for the Guardian does this sort of lazy articles all the time, if you outsource manufacturing that you *need*, it's a *loss*. And if you pile up losses, over decades, you end up bankrupt. Plain and simple.
Even your own graph has not gone up over the last decade. Apart from that, the rate of increase since the bottom of the early eighties recession is clearly lower than that between 1948 and 1972; a period when lack of investment was scandalous, the whippet flanges notoriously being turned out by outdated machinery and outmoded working practices.
Thumbs down because there doesn't seem to be an "utter bollocks" icon.
Since economic output grows exponentially, the real impact of manufacturing upon it ought to be measured as a proportion of GDP, not stated as a number of units. As an economist, he should know better.
As Worstall says, manufacturing has become more productive as technology improves and this has led to an absolute increase in the amount of units produced. But this is true for all areas of the economy. If you assume that the economy is growing at the same time, the graph looks more like a slowing manufacturing sector up to the 1970s as industry fails to update its technology, and then an progressive marginalisation of manufacturing as we move to a service based economy.
I'd be interested to see what the GDP adjusted graph would look like, and perhaps some time series from somewhere like Germany, where they modernised their technology rather than changed the basis of their economy.
At the same time as the number of people handling hot flanges has decreased because of technology/efficiency, the population has expanded enormously. So the proportion of people employed in manufacturing must surely have dropped faster than a small boy plumetting from a chimney.
So by that measure (which seems as good as any other since it reflects people's real experience from the dole queue) we don't make anything any more, and the skills for doing so will surely disappear. I imagine we'll be having to bring in consultants from China to tell us how we can make this fancy new thing revolving on our computer screen.
However, when you look around, there are so few firms left, and so many massive factories laying empty.
The only logical conclusion you can come to is that all the manufacturing has gone.
Unfortunately, this isn't the case,
I remember a few years ago when I worked in a steel foundry, there was a survey of all the manufacturing output in Sheffield and we were producing twice as much (tonnage) as during the 2nd world war with only a tenth of the workforce.
It's all down to modern practice, robotics, computers and, at the time, a bloody good exchange rate for exports.
You said coding is manufacturing
[quote]If we can manufacture using fewer people then there are more people to go off and do other things: write Grand Theft Auto, wipe babies' bottoms, whatever.[/quote]
Did you mean PLAY GTA.
So the translation is 50 years ago 50% of the population made things while the rest either serviced them or slacked of on the dole. Now 10% of people make very expensive things and 90% either service them or slack off on the dole.
And in another 50 years 1% of the population will make things whilst the rest either service them or slack off on the dole.
Reminds me of Judge Dredd's world, League Of The Fatties was a good prediction by 2000AD.
My anorak is the one with The Galaxy's Greatest Comic in the pocket.
It would be nice to have exactly the same charts for other countries like France, Germany, Spain, US or Japan. Then it would be possible to see if UK had lost some of its manufacturing capabilities or not ;)
Personaly, I do think so : where are the (real) British cars, planes, trains (LOL - don't shoot at the ambulance), etc. ?
A confused mess of assumptions. An increase in bottom-line value shows a causal link to higher volumes? Oh please, spare us.
The landscape has changed, yes. The UK doesn't make heavy manufactured goods or consumer goods. It's just economics no point in getting upset about it. No British cars, locomotives, ships, aeroplanes or plant.
There is a thriving export trade in high-value luxury goods and low-volume speciality items though. After 25 years in manufacturing I've moved from mass volumes of bearings to low volume electronics. Value is higher though.
No more amateur Sir Digby Jones analyses please.
"So who's been lost, certainly not the high skilled robot programmers like myself, only the non-skilled people have been lost along the way.
Who swell the ranks of the employed, while the survivors have to work upto 60 hrs a week in order to keep up with production"
Or (in the case of our beloved Moderatrix) drive down the M1 to grab exciting meja opportunities down South.
Brighouse receives a mention in the memoirs of the crime novelist John Wainwright (the other Yorkshire Wainwright). Briefly put, good brass band, locals liked a punchup, bit of a s$%thole.
And with an outside temp barely below 0 C it should still be mini skirt weather.
On a slightly more serious note has this graph been adjusted for inflation yes or no. given the inflation (wage or price) in the UK over the last 7 decades it it hasnt (and fairly carefully given the way those numbers have gone up and down) it means nothing. Like others I also would like to see how it compares with the other G7 members.
Incidently if *only* manufaturing output did go down 10% that should show up. However was that period not a "recession," where *all* output (IE the GDP) went down?
Assuming this graph is inflation adjusted, Manufacturing output rose quite sharply as a result of Maggie (1981 recession excepted, which you could attribute to the major change in policy) and seems to have flattened out during the reign of Tony and Gordon.
Vote Tory?
I shall now sit back and watch the missiles fly......
I trust you are doing a spot of trolling here, Tim? If so, fair enough - otherwise, whooooooooaa there!
A country prospers because all of the citizens of the country have food and shelter, to say nothing of computers with broadband connections to read your words of wisdom. If we are merely a country of a few "fat cats", earning a bundle by making small numbers of expensive "stuff", we are not exactly on track, are we? All those unemployed oiks are going to rebel in the end - unless the "grand plan" is to let them starve - or, in the words of someone famous before you; "let them eat cake".
No, Tim. Making small numbers of expensive things, employing equally small numbers of people in the making is merely a puff of mist in the eyes of logic.
I think you are a Tory and I claim my €5...
Where do you think the money for welfare comes from? Printing money? The state doesn't have a lot in the way of resources, only what it can claw back from the private sector and individual's pay packets.
I think you are a Sustainability Officer, and I claim the cost of my recycling back.
So according to the graph "the value of manufacturing output in the UK" is ~2.5 times what it was in 1950. Yes?
But according to wikipedia (Economy_of_the_United_Kingdom) UK GDP in 2005 was ~91.88 times what it was in 1950 (£1,209,334M / £13,162M).
So "the value of manufacturing output in the UK" as a proportion of GDP is ~2.7% of what it was in 1950.
Is that correct? Is that not a total collapse?
You assume that 'value' in this context is a raw, unadjusted monetary unit. Value may just as easily, and more likely, mean the contribution to economy now and then, or an adjusted figure accounting for inflation. Truth is that the article and graph don't state the units at all, making any conclusion worthless supposition.
Until the author defines 'value' we're all in the dark.
You're all weird. The author is is rightly pointing out the silver-lining, when the rest of the media (and society) wants to wring its hands over whether our secret services know that other intelligence agencies torture people.
So to all the hand-wringers out there, shut the fuck up, or I'll send my friends round to your house. And you don't want that.
And to the writer, nice one mate, a lovely piece of prose from the flip-side.
Bottom line is we are to a lesser or greater extent reliant on imports of basic goods such as clothes and food, which is inevitably an issue for those of low skill, because they are competing for jobs on an international basis.
However. As the cost of oil and therefore logistics inevitably rise, the relative cost of creating those simple items in the UK will reduce to a point where we are better off creating them.
The same is true of more complex goods. I work within the supply chain department of a UK manufacturer and have been involved in outsourcing large elements of our operation to China. We are now finding that with the increasing costs of logistics and the cost of increased cost of the additional stock holding required by longer lead times, Chinese manufacture is already looking like a bad idea.
The only real way to increase the level of low-skilled employment in the UK is to raise the living standards of those employed "on the cheap" in low cost countries. Some one doesn't need to be making televisions all day for many days until they want a pay rise to pay for it.
of course the graph does not allow for inflation, the only thing inflated round here is the authors opinion of himself :D
and for the record thatch clearly carried on where hitler left off, and did a damn sight better job of evicerating the british people.
(damn rule 34 invoked, but i do feel that the number of swasikas on this site today may have something to do with it)
BestBeer is seeing Tories everywhere (na mate, you should run the country you blood-clot), and makes that classic error of trying to speak for everyone all the time. "WE are not exactly on track are we?" (= I am not on track and I have no life) .. But there's a place for you in the BNP or the English Defence League with your "all those unemployed oiks are going to rebel, starve and shit, unless you all hand out cake" (= unless I get free money and beer, I will be VERY angry and ruin all your lives with my ill behavior). Oh I'm trembling. Why don't you try making something? Start off with something easy, like BEER. You can buy a kit from Boots, at very reasonable cost. All I ask is that you don't become a completely useless twat. For instance, avoid writing poetry, which makes normal unskilled people into twatty unskilled people, with an English GCSE.
The only long term conclusion you should draw from this graph, is that before too long you will be working for the Daily Mail too.
The IoP is made up of these industries:
Food, drink & tobacco (14.9%)
Textiles & clothing (2.6%)
Leather & leather products (0.3%)
Wood & wood products (1.9%)
Paper, printing & publishing (13.2%)
Coke, refined petroleum & nuclear fuels (1.7%)
Chemicals & man-made fibres (11.3%)
Rubber & plastic products (5.0%)
Non-metallic mineral products (3.6%)
Basic metals & metal products (10.9%)
Machinery & equipment (8.3%)
Electrical & optical equipment (11.1%)
Transport equipment (10.9%)
Other manufacturing (4.4%)
For all you know the rise since 1964 could be entirely due to North Sea Oil - ( and t4 by extension Rubber & Chemicals ) you don't have enough data to make any meaningfull assesment about the long term viability of British manufacturing from this chart.
In fact North Sea Oil production peaked in the mid 80s and late 90s
http://www.statistics.gov.uk/cci/nugget.asp?ID=198
http://www.statistics.gov.uk/CCI/nugget.asp?ID=169
The value of the finished product is not the only factor worth mentioning. To take the argument to ridiculous conclusions, if all manufacturing shut down except for one factory selling widgets made of unobtanium laced platinum at 3 billion pounds each would that also count as an industry that is not in decline? The critical point is if the figures provide the value to the economy rather than the company (i.e. tax revenue). The Index of Production from ONS is not entirely clear on that matter.
It may be true that manufacturing does not magically protect from a recession, and certainly any manufacturer will be hard hit by the lack of demand from its recession hit customerbase. I note figures for the impact on the service industry are not provided either, though.
Fewer workers is only a good thing if the workers go off and provide a higher value to the economy as the writer grudgingly concedes.
It is no doubt inevitable that UK manufacturing would decline and be forced to increase its skillset (globalisation and cheap overseas labour will encourage that), Maggie or no Maggie.
Manufacturing output certainly has shrunk; the fact that the gross value of the output has increased does not deny this. Therefore, it is still perfectly possible to at least start the argument that Maggie destroyed industry and to question many of the author's assumptions.
'Well at least the UK still make shed-loads of guns, ammo, and other military paraphernalia which we *could* use to defend ourselves (although I'd gladly see the back of this trade's exports).'
Actually we don't. Our last military grade munition factories have been largely shut down and our rifle cartridge production capacity was shipped to India a few years back. We also don't produce tank rounds any more which means the UK's tank fleet now has to have new barrels fitted so as to allow them to fire rounds purchased abroad. We make very few fire arms, although we do make some very nice speciality weapons such as sniper rifles, and our heavy armour production capabilty has almost vanished. Do try to keep up, becuase when some nasty men come kicking down our doors, we literally have no means of holding them off on our own anymore without assistance from willing countries. Thank you Labour, you finally managed to prepare our country for rule by foreign powers. In the cold war it was the Russians, and now it could be anybody.
Wealth produced by service output is fiat. Stuff that translates directly to property without passing go (manufacturing output) , produces a higher quality of wealth - it's true value is more based on need versus output rather than confidence. Now the losses in fiat value are being socialised again for a loss of confidence in the banking sector, surprise. Nothing has truly been lost but everybody ends up paying for it.
Speaking as a newly redundant techy specialising in dealing with the sharp and nasty end of manufacturing I don't think I've ever read such a lopsided piece.
Manufacturing in the UK is all about "High Value, Low volume" because we can't compete with the likes of China. Or at least that is what everyone tells us. Well, given politically inspired butchering we've had over the last decade it is hardly surprising that we can't compete. Most large manufacturers have been bought by foreign firms which have promptly closed or moved all manufacturing to somewhere else simply because there aren't the benfits to getting it built here. Why, well, go ask the Govt. Unless there are votes to be bought, the UK Govt will not fork out cash or offer grants to manufacturing. I know, I've tried it.
Manufacturing within a secure nation must be balanced. There must be an appropriate mix of high, low, and medium value products to sustain the country's income from this corner of it's GDP. We're skewed all to one end meaning "average" cash output for Manufacturing with a way way below average employment rate. Hence higher social costs..
As for this "fewer people in manufacturing means more people to go write games". I'm looking for something politer than "what the f***" but at the mo' it escapes me. 90% of your normal manufacturing operators are not coders. If they had an affinty for coding, trust me, sitting doing a repetitive manufacturing task would drive them to suicide.
The only simple and obvious facts are a) you can prove anything you like given a graph and a bunch of narrow field figures, and b) manufacturing as an industry now employs vastly less people and makes far fewer items than it did 10 years ago. In my book this equals "eviscerated".
There's a few valid points in the article, but it's still an epic fail in it's narrow scoped and simplistic view.
Rant over......
I'd like to agree with all of it and believe all is fine; couldn't we all do with some good news?
But why is this article being published now, in the run up to an election? Which colour do you want to sway us in favour of?
Megaphone icon - because, it sounds like you're going canvassing.
Well that may have been the case in the past when we had manifestly better education than pretty much all of the rest of the world, but that is just not the case nowadays. Not only do countries like China have excellent education all the way up to university level, but they have a population that is largely desperate to succeed and have a better way of life than their parents.
Our education is still of a decent standard, albeit no better than other places, but we are a pretty spoiled country nowadays and it is very clear that a significant proportion of our youth are MUCH more concerned about how much they are enjoying themselves than how much they are learning.
That is the rarely acknowledged flipside of a very high standard of living and high disposable incomes, largely built in recent years on a house of cards of debt pushed on people by the banks ever since the big bang.
"What has actually happened is that manufacturing has become more productive and moved higher up the value chain, both entirely desirable things."
Are they? Why?
I really don't see why increasing productivity while reducing employment is a desirable thing. At all.
This is a classic flaw in the pro-capitalist argument - when they talk about the system working they always carefully select measurements of success. Yet when people are asked if they are happy, the picture gets a lot more muddied.
People who are out of work tend not to give a damn about whether their old job is now done by a robot (a Polish word) "higher up the value chain" or not. Any economic system which results in millions of miserable people living in fear for their lives is not in any democratic sense "desirable". Which is why it appeals so much to those who hate democracy and work so hard to keep economic decisions and power as far away from voters as possible.
Production of more and more shiny tat is not a useful goal in itself and has in fact tended to drive the actual quality of life (as measured by real people and not half-wit economists) down.
If productivity is a good thing and you can only be more productive by firing people, it seems to me that the only solution you think will fix the unemployment problem is to kill everyone that don't have a job, because if they are alive not on the service industry already, they will never get another job (as everyone is aiming at higher productivity, be it on manufacturing or the service industry).
So, to keep unemployment levels low you appear to be suggesting that that are no alternatives other then sending people to hell when they're fired. Good solution, unless you loose YOUR job...
AC @ 15.37, Tim's been researching this sort of thing for ages (and was going through the dataset before Xmas), and I'm pretty sure he's had a draft of this for awhile now, but was looking for someone to put it up. But I'm not sure what bias you're seeing?
It's not a pro- or anti- govt piece, merely a response to repeated claptrap in the media and elsewhere about the non-existent decline of manufacturing.
It's good that this has been published, voting coming up, we ought to be a lot more informed than we are about what we're doing. It's also nice that we've figured out a way of persuading countries overseas to buy our expensive products and services, so that we can use the money to import cheap goods, making us all a lot richer.
The bottom line from the statistics offered is not very exciting really. If everyone referred to the historical economists (who focus entirely on how economies actually behaviour) rather than the economists who constantly look at how to change things the wholse thing becomes rather obvious. The message from the graph is that the UK has had a 1.5% average annual growth rate in manufacturing. For a mature pinacle economy this isn't half bad so no great suprises or concerns there.
The graph was prepared by real statisticians so it doesn't lie about the value of manufacturing in our economy. It is inflation compensated so that increase is a real increase in value. There is one serious statistically issue left open which is whether the graph only includes value add rather than the total exit value of goods. This makes a big difference as our manufacturing is now higher up the foodchain and hence has much more significant material input costs than would apply many years ago when it including everything from the mining / farming of raw materials on upwards. Given the involvement of professional statisticians I would assume that it is value add.
After that all we are left with is that 1.5% per annum tailing of to the present day is a little pitiful against other nations (like China) but it is expected performance. If you are among the richest countries in the world (and we are) then you are automatically at a serious competitive advantage. The main brake on British manufacturing isn't government policy it is the income expectations of the British population* and there is nothing you can do about it..
* Please note British population applies to all those involved in any manufacturing business not just the shop floor workforce. Industry in rising countries tends to have the advantage of consistently reinvesting profits and cheap management as well as cheap shop floor labour.
This story is ridiculous. The underlying reason why Britain's economy is fucked is because of the collapse of manufacturing and the move to service-based jobs. Most of those McJobs don't generate wealth or are economically useful other than to keep people off the dole. Today, it's almost impossible to think of any British manufacturers that are world-wide household names apart from Rolls Royce (aero engines) and GSK (pharma). Compare that with the nations that compete and are now way ahead of us: Boeing, Sony, BMW, Seimens, Samsung, Apple, Xerox, Bayer, HP, Cisco, Hitachi, Philips, Yamaha, Intel, Canon, Bosch, Pioneer, Volkswagen, etc, etc.
50-60 years ago, Britain was still just about the workshop of the world and produced well over half the world's ships and locomotives. It had a successful car industry too. And made most of the world's motorcycles. It had an amazing aviation industry. Now that's pretty much all gone. Instead people work in call centres and non-jobs in the public sector.
This country would be a basket case if it wasn't for North Sea Oil. And that's been pissed away. Compare how the Norwegians have used their oil revenues with how it's been used here. Once the oil's gone, this country will be as economically significant as say Egypt.
I worked for a manufacturers over here, it was low tech goods (household textiles) and had a reasonable sized manufacturing workforce. However I would say that they also bought in a large percentage of ready made items from abroad, mainly china. Does this count towards their manufacturing output?
This graph could also be very easily interpreted negatively:
I see no real growth in manufacturing output from about 1997 to 2008. These are 12 BOOM years for the UK industry without one negative GDP growth and yet manufacturing grew, well NOT AT ALL.
Now if you add on the last 18 months, then we're back to mid 60s levels. Sure we'll regain a lot of that in the coming years, but not over night, so fast forward two decades and we'll very likely still be at 1998 levels.
"The myth of Britain's manufacturing decline". Pull the other one...
"We've moved up the value chain, from simple stuff to complex stuff and people are willing to pay high amounts for that value we've created in complexity (that they are willing to pay is the definition of having created the value)"
You import more manufactured goods than you export, so you're simply buying in goods from China, and reselling those goods.... AT A LOSS.
It makes no difference if the size of the two numbers increases. It's he difference between the two.
Can you name these complex goods that you make? Because even in IT you killed that market and are even a net importer of IT *services*!
We manufacture a lot of stuff, but automation and technical skill means there's no need for unskilled labor and less need for labor. Mostly what you usually hear is complaints from people who think that a high school education should be all that is necessary to get on.
For an instance, a lumber mill that used to require 50 people and would start out high school graduates at $10.50 an hour and give them a top wage of $16 an hour now requires 8 people who need training to run advanced equipment and make significantly higher wages.
The author clearly subscribes to the New Labour / Frank Furedi sect worldview and probably thinks that people need video games, gambling and banking services (which are now defined as products and may soon be included in manufacturing). Apart from counting the value of manufactured products rather than volume or use-value, the author also failed to account that we now consume 3-4 times per capita than in the 1960s.
Britain's main manufacturing exports are military hardware, pharmaceuticals, entertainment industry accessories and rapidly shrinking reserves of North Sea oil. Of the things we actually need, most is now imported, that includes according to government statistics 40% of our food (I think it's higher), 75% of motor vehicles, most electronic gadgetry, industrial machinery, medical equipment, most steel, timber and even plastics. We are now net importers of gas, oil and almost unbeliavably coal.
And if carrying coal to Newcastle seems absurd, bottled water marketers have successfully sold French H20 to gullible rain-drenched islanders.
N
If you ignore the big dip in the middle for that recession and the dip at the end for the current one, tThe curve is clearly flattening.
- So growth is more-or-less over.
Economists think that continuous growth for growth's sake is the most important thing, rather like bacteria, so that does mean manufacturing is almost economically dead.
However, the UK does still make stuff - but not much. Most of the manufacturing in the UK these days is prototypes - not production.
While prototypes do have a very high value - nobody actually buys them. They buy the production units instead.
My car was made in various parts of Asia.
So was my TV.
And my computer.
My keyboard
My monitors
The chair I'm sitting on, the table my computer is on.
My clothes
My shoes
...all made somewhere in Asia..
... and this bloke is trying to have us all believe how 'gobsmackingly obvious' it is that British Manufacturing *isn't* in decline?
I recall the toys my Dad gave me when I were a nipper - toys from his youth - every last bit of it made in the UK. The cars his dad used to drive, the trains he caught to school as a kid - all made in the UK. The clothes he wore - made in the UK.
Tim Worstall, if you can find a cluestick manufactured in Blighty, feel free to smack yourself around the head with it, repeatedly.
If you can find an average high-value manufactured item manufactured in Britain of greater value than the millions of vehicles we drive (very few of which are manufactured here), you get a gold star, if not, just keep smacking yourself in the face with that cluestick - it may improve your outlook.
In case you hadn't noticed, we're a SERVICE industry - effectively, a nation of shoplifters. ... er shopkeepers..
Even if the numbers aren't cooked (and it looks like they are), it's missing the point!
How this is put forwards as a good thing pulls together the luddite fallacy and trickledown effect, both of which I don't buy.
It should really be all about employment.
Even if it looks on paper great for the economy, we can't all clean toilets or make tea/coffee for a few rich bankers. No, you judge a society by how it treats its poor and how wealth is distributed. Assuming they aren't sociopaths, the rich end of the right never put themselves in the shoes of the unemployed. They always believe they would rise to their position regardless of the expensive education, lucky breaks, right skin color, right accent, etc etc. But what if you parent's where never employed, never valued, along with the whole community. All living on hand outs, the schooling is whatever is forced, and is seen as pointless by your parents and community. Drugs (especially alcohol + smoking) and crime are rife. Then you won't rise to the top either, you like them, would be lucky to get out of it at all, or even consider it a possibility! It is heart breaking how a large section of society are swept under the carpet. No people are valueless. I cannot believe even economically, let alone morally, that this is the best way to run a society.
Both main parties have had a hand in this. The UK gini coefficient was 0.25 when Thatcher came to power it is now 0.36 and continues to rise. I think for things to really change we need a big change in our political system.
As a supporter of UKIP, I am becoming increasingly annoyed by the hijack of our brand of conservatism, by Tories. What UKIP want, is a low tax and independent nation which governs itself (the people govern!)... it is called direct democracy.
The real waste in our nation is that caused by government, they take most of our money in taxes, and then they spend it on shit that NOBODY wants.
The other night on Question Time, Ruth Lea a prominent Tory "economist" was attempting to justify the closure (aka "mothballing') of the Corus steel plant in Middlesborough. This plant is making the sort of high quality, technically superior product that Worstall talks about here, it can't keep up with the potential orders, and yet, Corus are opening a plant in the Netherlands, with a massive subsidy from the EU. Apparently, it is more "green" to chuck 3600 workers onto the scrapheap and then invest our taxes in Dutch building and steel workers, whilst throwing a few titbits to our 3600 highly skilled and newly unemployed workers.
It really is very simple, in the early days of the industrial revolution, we made EVERYTHING, then the others learned how to make stuff which levelled the world playing field a bit. Then gradually, as government became more invasive and more efficient at stealing our money, we put ourselves at the bottom of the manufacturing league, as others have pointed out here, we make doodly-fucking-squat in this country, and most of this decline has happened whilst the Tories have been in the driving seat. Add to this the idea, that the socialists have that rather than undoing Tory failure, they should take EVEN more of our money to spend on their hopeless schemes, and we are definitely doomed.
So your comment "It looks like we won't have to worry about UKIP for several millenia." though clever, is probably the reverse of what is actually good. We need a government that will take its nose out of our business and its hands out of our pockets. The only political party in this country that is proposing LESS government is the UKIP. Unfortunately, there has been a mini hijack in progress recently, disaffected Tories have been joining and instead of playing UKIP style, they are attempting to create a new Tory party. It is not only about what government steals from the people, it is what it does with the cash that it has stolen too.
We should indeed be all be lot more informed. E.g. courtesy of this article, readers of El Reg should now be able to recognise Worstall's claptrap, and related stuff, wherever it may appear. There was more value in the comments from (eg) Ac 15:27 than there was in the article. But what else should we expect from a self-confessed failed commodity trader who can't even keep the About page on his bog up to date once every couple of years, despite managing multiple "articles" on a good day?
Wrt Rolls Royce as oft-quoted example of British technology leadership: UK plc used to have leadership in steam engines too. Times change. Nothing I see around RR fills me with anything other than fear that within maybe ten years or so, Rolls Royce will be out of business, both because of unavoidable oil-related changes in the air transport market, and because of the total and utter (but for some reason, as yet totally unaddressed) long term engineering management incompetence at some of RR's critical suppliers.
I love that graph. Looks wonderful. Shame it hides so much. Such as:
(1) The numbers of UK jobs in UK manufacturing has drastically gone down in the past 50 years.
(2) Entire UK industry product sectors have been virtually wiped out in the UK, where we now have to import vastly more than we export.
(3) Vast amounts of manufacturing real estate in cities have now been turned into housing, which shows we have lost considerable amounts of manufacturing that once employed considerable numbers of people in these communities.
(4) That graph also hides consolidation. As industries consolidation we get fewer companies taking larger market shares. (Thats not growth for the industry as a whole, although the surviving companies always want to pitch it as good news, (because they always want to paint a positive image of their industry to encourage new trade with them), plus its good news for the few companies that survive the inevitable consolidation process).
(5) That graph also hides automation. This results in yet more job losses, as machines take over production, which when added to fewer companies results in considerable job losses in the UK workforce.
For example that graph would allow the following situation and yet it would still look good on the graph, e.g. So where once say 1 Million people in the UK could be employed and so earn a living in maybe 10000 small companies, we may soon end up with say 10000 people in 10 companies, doing 3 times the output of the 1M people (via automation), whilst only 1000 of the people will likely be on the 100k+ vast wages (if you are very lucky). The problem is, in all this rampant greed fueling the inevitable consolidation process, its a major shame about the other 990000 people now out of work!. Consolidation is inevitable, so no point in getting worked up about it, as thats just life, but that graph hides a lot of hardship felt by a lot of workers. Which is the real point when people talk about decline in UK industries
Also before you cling to the "High Value, Low volume" hypothesis for the future of UK engineering and technology, all that kind of thinking totally overlooks countries like China are increasingly moving into these "High Value" business areas as well. Then where will we be, if we just cling to this hope?
So in summary, that graph is very misleading, but also even more importantly we cannot be complacent with the way things are, believing them to be good when they are not good. The UK government needs to invest a lot more into engineering and technology, but graphs like this will be picked up by politicians as excuses to do (and so to spend) nothing.
The UK government needs to invest in the future, not blind itself with statistics to imply we are still industrial revolution style world leaders. We need to invest and build for the future, because while we currently don't, other countries most definitely are heavily investing and we are loosing ground to them every day. That cannot continue without serious consequences to the UK and its workforce. :(
I gave up economics long ago - at about the time that Thatcher was squandering oil money on a campaign against UK industry. As someone pointed out, the Norwegians weren't so stupid.
Back to the point: the origin of "robot" in English is usually ascribed to the Czech word "robota".
...is missing in most (all?) Anglosaxon countries. Driven by some simpleton economists, it is the consensus of London and Washington governments that they should only interfere with business in Healthcare and Pensions.
Here in Germany the state takes the stance that each young person should get a solid education. If you leave school after nine or ten years you normally apply for a three year apprenticeship with a company, big or small. Those who have 13 years of schooling normally go to university, similar as in the US or Britain. The major difference is with the majority, which go for the three year apprenticeship: Half the time they spend it in special schools ("Berufs-Schule") where they get the theoretical background of their profession. The other 1.5 years they can apply that knowledge in their employer's company. Big companies have their dedicated departments for apprentices.
After those three years the skilled workers normally work in their profession for a couple of years and then have the option to become "Meister" or "Techniker" in their field, deepening their expertise.
All of that is not just free, apprentices normally get a wage between 500 to more than 1000 Euros/month. Employers are committed to this kind of strategic investment.
The results are impressive, as every interested person can see in companies like Daimler, VW, BMW, Bosch but also a vast number of smaller companies like Trumpf or SAP. Financially, Germany is clearly the strongest european country, despite the fact that Frankfurt is not a "truely global financial center" as The Economist put it. We are very happy with this situation.
Other arrangement such as financial relief (for wages - "KurzArbeiterGeld") in times of temporary economic trouble of a company also helps to retain employees at their company.
Unions are also collectivist in their rhetoric here, but they are not as insane in their actions like the UAW. They milk the cow instead of sucking the blood out of it.
It is striking to me that most of those industries the US is still strong enjoy some kind of industrial policy: Aerospace gets at least 100 billion $ per year through the pentagon; drug companies can sell their expensive substances (effectively) to the US government at enormous price.
Other kinds of mechanical engineering in the US are virtually dead or on emergency life support (think of those GM billions). Fiat recently took control of Chrysler, after Daimler considered it a potentially lethal drag and decided to offload it.
IT is one of the few industries that are a success in the US, without significant government help.
I do think education is the key to sustainable economic success as people *are* truely what makes the difference. Any idiot can buy a CNC tool machine, but it will not be very useful with a monkey operator. US industry thinks workers are monkeys they only need to train for a few hours and that is sufficent. I know that from working in a HP manufacturing operation soldering PCB boards 15 years ago. My training lasted not even an hour ! God knows how many tens of thousands of marks HP lost in the boards my badly adjusted machines soldered together.... Only weeks later I found out they had an ISO9000 document describing everything of that board production process.
AFAIK Japanese companies also emphasize the training of their workers and have made quality a cornerstone of their company philosophies. The Toyota affair is a mere abberation of this way of thinking.
...actually made Germany financially very strong. On the Eurasian continent only China is stronger and on other continents countries are in debt to their chin or small players. America, Britain, Japan, all highly indebted and in the process of digging themselves deeper into the shit. Japan for different reasons than the anglosaxons, though.
On a ranking of financial strength, Germany is arguably now the number two behind China.
Prost !
I've worked in manufacturing and tried to become a manufacturer and can confirm that, generally, 'manufacturing' of material raw and finished goods in the UK has declined in scope, volume and value. Some labour has been re-employed in the Service sector.
Decline in UK prosperity will continue as niche industries are killed off by Idiot Financiers, Bureaucrats and Politicians. Niche need not necessarily be small. Pharma isn't small, neither is banking but they are niche.
Given that (and with the cost of logistics rising that is not necessarily so) the same good can be supplied from anywhere in the world what is the critical added value that makes the UK favourite? Cost of capital, education and differential competitive pay rate are the three determinants to develop and/or attract and retain high added value specialisms, which IMHO is what UK PLC should be nurturing.
Numerical literacy (Science and Mathematics) is essential in a technical workforce - look at China and India. Highly valued numerical ignorance in "the meja" and politics in the UK does not help! In the modern era we don't do 'bulk' so we'd better learn how to do 'valuable niche' a lot better if we want decent work, remuneration and pensions.
That is the whole point of the article. Sure your, what, £30,000 (and that assumes a 25k car) worth of gear was made on very small profit margins in Korea, but next time you fly take a look at the 4 big £10,000,000 engines hanging off the plane, then get on the millions of quids of train to take you to your destination you might see that the whole point of the article is that we don't make small margin stuff anymore. we make big shit with big profits.
Finally, correct me if I'm wrong about cars, but there is a big Nissan plant in Scumderland, a big Toyota plant in Derby, Jaguar in Birmingham/Coventry/Wolverhampton, a big Ford engine plant in Dagenham, most world Transits are made here as well as so much other shit that if anyone is in need of a cluestick I think it is you - feel free to import a Chinese one if it makes you feel better.
Yes, that graph does take account of inflation. You can see it doesn't flinch from showing the catastrophic effects of the 80s recession. Also, if it weren't inflation-adjusted, it would show massive (10-20% per year) increases throughout the 70s.
The article is completely right. Manufacturing output grew by about 20% overall during Thatcher's tenure, and it's grown significantly since then. That doesn't mean there wasn't a huge recession - just that the recovery, as commonly happens, carried on to a higher point than the start.
Now Britain is becoming a more service-based economy. That's a good thing: it means a much higher proportion of people get to live in ways that were previously only available to the wealthy middle classes. There are people to cook food and make our drinks for us (in restaurants and cafes - your working-class ancestors, pre-WWII, probably never set foot in such a place from one year's end to the next, unless as a waiter); people to entertain us on demand (just by switching on a TV); machines and people (dry cleaners) to do our laundry; people to repair our plumbing or our windows, or any of the thousand-and-one chores that ate up our great-grandparents' lives. How is this not good?
And all it requires is that manufacturing, and agriculture, produce more output for much less human work. Thus freeing people up not only to write code, but also to open coffee shops, cake shops, cheese shops, to make TV commercials and write blogs and publish a mind-buggering range of magazines and guides to all this "worthless" activity. There are still genuinely poor people in Britain, but the median household lifestyle now is vastly, hugely, humungously better than it was half a century ago.
The service based economy is not a good thing. It's quite simple really. The nation can only truly get richer by selling more stuff to foreigners, and the fundamental measure is balance of trade. At the moment our biggest export is £, which means we have less ourselves. Manufacturing is the best way of turning effort + raw materials into added value, which is where real wealth comes from. Our current standard of living is build on a mountain of debt which only manufacturing can repay, and unless we learn the value of hard work we are doomed to be more like greece than germany.
"Manufacturing output grew by about 20% overall during Thatcher's tenure, and it's grown significantly since then"
Of which 15% was getting back to pre late 70s recession levels. And it has not grown significantly since then (I don't consider ~8% in 15 years significant).
Analysing this data by picking certain time frames is always risky. You can also claim that manufacturing has only grown by "~13%" since 1972 - that's almost 40 years. Hardly breath taking!
Yes, the figures are inflation adjusted. I should have made that clear but was simply assuming that "index" would have given the clue. It's all in, as above, 2005 pounds.
North Sea oil is not included: nor is mining. This is purely manufacturing, extractive industries are not included (there's another part of the same stats set that can be used for that).
Yes, I know manufacturing employment has fallen. I mention that.
UKIP: yes, I'm a member and supporter: I *used* to be the press officer. Worked doing that only for the year up to the euro elections.
As to political reasons: no, nothing to do with coming elections. More annoyance with the way that the political conversation seems to have got stuck in a rut of stating that manufacturing has been disembowelled. When it hasn't, as the numbers show. Manufacturing employment has, yes, but that is, as said, something very different.
To put it another way around. The NHS employs 1.3 million people and is about 10% of the entire economy. Both the number and the percentage have grown substantially since 1947, the year of its inception. Those people have to come from somewhere, that percentage of the economy has to come from somewhere. To be absurd about it, think that in 1947 the economy was 80% manufacturing and 20% agriculture (it wasn't, this is just to explain the logic).
Now it's 10% NHS (which is a service) and thus we must have both manufacturing and agriculture stuffed into the 90% of the economy that is left. So one or the other (or both) must have declined as a percentage of the economy to make room for the existence of the NHS.
Yes, I know, we didn't have 0% of the economy as health care in 1946, but it was a lot less than 10%.
Now, repeat the same exercise with the expansion of tertiary education. Of secondary education (even the moving of the school leaving age from 14 to 16 will have an effect).
Now, you can claim, if you want to, that the NHS, the expansion of education, aren't worth it, but they are services and that's some part of what has reduced manufacturing as a percentage of the economy.
This country became 'Great' on the back of slavery and warfare. We once had a great navy and armed forces with which we could subdue much of the world. We haven't got them now so let's get real and become the country we really are ... a relatively small offshore island with little power in the world.
It's the turn of Asia and China to dominate and if we're clever (which we usually have been) we'll stay their 'mates'. Otherwise ... Ta ta!
5th verse of 'Rule, Britannia'
To thee belongs the rural reign;
Thy cities shall with commerce shine:
All thine shall be the subject main,
And every shore it circles thine.
"Rule, Britannia! rule the waves:
"Britons never will be slaves."
Look at us now ... the country of CCTV Cameras and ID Cards!
The big trap the author has fallen into here is the difficult issue of how we measure manufacturing output, most significantly what proportion of "value" we attribute to the actual manufacturing process and what proportion to the research and development aspect involved in the goods.
For instance in pharmaceuticals, a firm like GSK can manufacture a new cancer drug in the UK that can cost only a few pounds to make per pill but can charge hundreds per pill globally on the open market.
On the surface this would seem like an enormously value added manufacturing activity but in reality is it right to attribute all that value added simply to manufacturing when 95%+ of the cost is in R&D?
After all when the patent expires on the drug and the intelectual property is lost that manufacturing activity would suddenly become low value added overnight as generic copies are made of the drug overseas by other firms.
An awful lot of UK manufacturing is like this and charts like the Index of Production are simply unable to separate the contribution to value of actual manufacturing and R&D in manufacturing output.
My suspicion is that real manufacturing output in the UK has fallen significantly since at least 1970. You can't simply compare the value of declining pig iron production with the rise of manufacturing expensive new drugs.
You fail to state the type of scale used on the left of your graph. Is it linear or nonlinear ? In the absence of other indications, it is convention that it is linear. On that basis ---
You show an increase between 1950 and 2006 of roughly 60%, so, if I take just the cost of petrol at the pumps. In 1962 I was buying 4 gallons (UK Gallons) of Esso Extra for 19/6 (old money) which is 97.5 new pence. If I apply a 60% increase to that, I should now pay about £1.56 ---- that is for FOUR GALLONS !! I actually paid this morning £1.10 per LITRE, which is approximately £4.95 a gallon. So, my 4 gallons now cost £19.80 !
I seem to have the impression of that being (in round numbers) an increase of 2,000% and NOT the 60% suggested in your graph. This leaves me with the conclusion (again in round numbers) that your graph actually illustrates a DECLINE in manufacturing in the order of 1,940% !!! Other things being equal. For example, in the early 1960's, Harold Wilson put a penny on the 'working man's pint', making it 10d (4 pence), so it should now be about 6p a pint according to your graph. Why then does it cost anywhere from about £1.50 to £3.00 ?
For the past thirty years I have run a manufacturing company in the UK and we have exported more than three quarters of everything we made over those years. I talk to people in many companies and many countries. I absolutely guarantee that manufacturing in the UK is MASSIVELY DOWN !!!
Which school did you say you attended ? Was it approved ?
Supposing they held a war, and that all the essential supplies (including the military ones) which we now import were out of stock within days if not hours? The UK has little to no possibility of making its own; even if people tried, we have neither the capacity nor the knowledge nor the raw materails nor the required infrastructure. "Dig for Victory" is the closest we could get, and we should be doing that anyway for other reasons.
The conclusion is fairly obvious, if fairly unpalatable to most of the chattering classes:
World War III is over and done with, and China has defeated the West (specifically, the US/UK West) hands down, with hardly a tank having rolled (except perhaps in Tiananmen Square).
Do the BBC still do language lessons on TV? Are any variants of Chinese covered? If not, where should I look?
As per the title, there are lies, damn lies and statistics. Take your pick as to which you consider this article to be.
Personally I go on a more simple basis. For 30 years I worked for a major supplier of test equipment to the electronics industry and specialised in Board Test Systems. We used to have a large number of customers in the UK. However from the mid to late 90s onwards, we saw the slow death of volume electronics manufacture in the UK. First it went to Eastern Europe, then to the Far East and most of it ended up in China. Its unlikely to ever return to the UK because the people who knew how to do it (and believe me it is NOT the simple job that some people would have you believe) have moved on to other jobs or long term unemployment.
As for the rest of UK manufacturing industry, well in the distant past, we used to have a steel industry, a coal industry, a ship building industry, a car industry etc etc. We used to have farmers who grew food instead of field upon field of oil seed rape. I'm not saying that any of the above were perfect or (in some cases) weren't artificially propped up but we did have them.
There may be a statistical basis for the article and graph but I suspect it is based on skewed data and selective interpretation which is the favourite way of "proving" that all of us who feel something is blindingly obvious are in fact wrong.
You may be interested in a documentary made some years ago for British TV.
It took 2 factories which make kitchen units. Understandable by Joe Public with no subtle features to give either one the edge.
1 in Germany, 1 in the UK.
In Germany the workers reset their (CNC) machines for new products on instructions from the plant manager.
In the UK workers wait to have their (CNC) machines reset by the "Tool setter." I've no idea what that would be in German. (the-one-who-goes-round-and-sets-the-machines perhaps).
it also made the point that the *top* 20% of students get as good an education in the UK as *anywhere* in Europe. It was the *other* 80% that were poorly schooled, badly motivated and left early.
The combination of British historical practices in education (if you teach the working classes stuff, they'll *know* things), management (self made men, ex public school boys or self-made ex public school boys with about a day's formal management training between them) and labour relations (*you* can't reset the guide fence. You're not a member of the Allied Fence Guide Setters and Set Screw Twiddlers. Set screw twiddling is a *skill* which you would have to be paid *more* for if you had it. Pay differentials *must* not be eroded etc etc) has made a toxic brew, Paraquat* for UK manufacturing industry.
Note that anyone with experience of SME level UK management will know of many managers whose greatest contribution to their firms would be to take out key man insurance and get hit by a train. Untrained, over promising (to customers), under delivering (to customers and workers), short sighted and inflexible. They *never* end up in an industrial accident, but they run companies that are.
Or so I've heard.
OK We've confirmed that the scale *is* inflation adjusted (which should explain also Wikipedia's comment that UK GDP has grown 95x since 1950, forgetting the massive inflation throughout a large part of that time)
So the UK is doing better than its doom and gloom media class would have people think.
But could it do better? An 80% "rump" might serve the ruling class just fine, but could they contribute a *lot* more, apart from creating a near *inexhaustible* supply of disposable "celebrities"?
Just a thought.
*A highly toxic weed killer, probably banned now.
"I worked here and...." "I have a mate who..." yeah right - your insights are so much more knowledgeable than the blokes who put the original figures together. Post 701196 - we may not make the bullets but BAe (British and the 2nd largest defense contractor in the world) make all the clever things to fire them.
As a percentage of GDP (in 2007), UK manufacturing was 23.4%. France (the country that 'supports' it's manufacturers) was only 20.6%. Our GDP itself was also higher. I know you will all whine that 2007 (the most recent reliable figures I could find) are before our anglo-saxon created crash. But three years ago you still wouldn't have believed it (but don't they have Citroen!?) The percentage of our economy that is manufacturing may have been shrinking over the past 40 years (mainly due to the rise of the financial sector), but as the graph shows, the value of what we do manufacture has still increased well ahead of inflation.
My Dad worked in a factory all his working life. It was shit. Given the choice he wishes he had worked on a computer colouring in like I do, or serving lattes in Starbucks to people who make money in the city. Who the f*ck do you people think you are, sat infront of your comfy computer getting misty eyed about factory life like some 21st century William Morris.
Of course we don't dig coal anymore. We don't need to. It's a shit job. With little profit. Let the Chinese kill themselves down a mine getting it out.
Yes, educate children to a higher standard, encourage opportunities for communities that have not adapted to the closure of local industry. These criticisms of policy are valid but please, don't try to make me think we want those polluting, life shortening, dull, exhausting industries back.
Only the f*cking middle classes believe the bullshit about a hard days work being any kind of pleasure for a working man. Banging in hot rivets or coding software for banks… which do you prefer? Pricks the lot of you. Give it all up and get on a plane to China and work in a ship builders there mate if you love manufacturing so much.
The recent reports of the UK company that have harnessed quantum physics for a touch screen display show the future of UK industry, much like ARM. Design the tech, license it to far east manufacturers and make more profit per device than they do. Keep innovating and stay one step ahead of the competition. Not look back to some golden heyday when men died at 55 and never saw their kids grow up like my grandad.
Kinda troll alert, John Smith 19, I understand (-: All I wanted to say to damn renegades is something about the lecture ppf - crude oil transportation, see the yellow-outlined txt in the batch with similar name and get back to Step 2. Someone's on his vacations.
It's impossible to work in a cloud sometimes, thx2god we have theregister.co.uk .
And, my +1 to your post, John Smith 19. Of what's happening in English economy (I mean the one of the whole conglomerate of micro-continents behind the Pond) I'd say that it looks like this is not the fault of the people, but mostly of the centre of the City.
As we're coming closer to the matter, let's push playback (we're now changing your "*A highly toxic weed killer, probably banned now" into "puff" tag, see what goes on then):
"They [puff] never [/puff] end up in an industrial accident, but they run companies that are" . No doubt an asterisk is a good means to emphasise your expression of feeling anything so _real_ big that only few can savvy the metasense. Ohmyfingertips, somanyletters. But this time, the footnotes were more than cool, I spent more time to read and comment it than I'm doing presently earning my bricks. So don't mention it, John, the pleasure's mine.
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