Last week, statistics from the Chartered Institute of Purchasing and Supply suggested that the UK manufacturing sector was enjoying a revival and was poised to lead the growth in the country’s economy over the next few years.As Sir James Dyson noted in a report on revitalising the sector three months ago, it could, if supported properly by government, play a major part in the future growth of the UK economy.
To begin with Dyson suggested that it is critical for the UK economy to rebalance itself away from financial services and property, two sectors which did not generate as much added value as many had suggested.
Who can forget that it was a combination of the two sectors in the guise of sub-prime mortgages that led to the massive financial crisis that brought the global economy to the edge of bankruptcy?
With policymakers now looking for an export-led growth over the next few years, it is clear that manufacturing – which already accounts for half of the UK’s exports – can be doing far more, especially in hi-tech sectors.
Secondly, with manufacturing focused outside the south east of England, any growth in the sector will have a disproportionate effect on the less prosperous parts of the UK, including Wales.
While Boris Johnson may not agree with the downgrading of the financial services sector in the eyes of government policymakers, there is surely an opportunity here to move away from the over-reliance on financial services, which led to a concentration of economic activity in London, and towards a more balanced regional economy.
Finally, and most importantly, creating and supporting the right type of innovative manufacturing business can make us less susceptible to recession in the future.
As Dyson notes in his report: “Whatever it is that creates generic differences between innovators and non-innovators, the consequence is that the former are likely to be quicker, more flexible, more adaptable, and more capable in dealing with market pressures than the latter are.”
Of course, James Dyson isn’t the only one to highlight the importance of manufacturing.
Only last week, the First Minister was speaking about the importance of the sector to the Welsh economy and how the draft manufacturing strategy for Wales will drive the sector forwards.
One can only hope that he is more serious about developing the sector than his Labour colleagues in the last UK government, who presided over a decline in manufacturing from 28 per cent of the Welsh economy in 1997 to 18 per cent of the nation’s economic output.
Despite this reduction in the overall role of manufacturing, it retains a larger role in the Welsh economy than in many other regions. From global giants such as Airbus and Corus to thousands of small companies producing specialist goods across the country, there remains real potential within the manufacturing sector in Wales.
For example, the winner of the 2009 Fast Growth 50 project was the manufacturing company Unit Engineers and Constructors which, since starting in 2004, has grown to a turnover of more than £17m in 2008 and a workforce of 167 people.
Having recently visited its plant in Swansea, it was a delight to see heavy engineering and manufacturing back with a vengeance in Wales.
Given the company’s aim of growing to a £30m turnover within a five-year timetable, it shows that even traditional parts of the Welsh manufacturing industry have a real future if they produce a quality product delivered on time and within budget.
With the 2010 Fast Growth 50 project being launched next week, will another manufacturer succeed Unit Engineers and Constructors as the fastest growing company in Wales?
And could this revival herald a new golden age for manufacturing again?
If companies have the right management, the right products and the right skills in place, and the exchange rate remains competitive to drive export activity, then why not?
More importantly, Wales, with the right support from governments in Westminster and Cardiff Bay, could be leading such developments given that we have some great manufacturing companies, both large and small, that could help drive forward both the Welsh and the UK economy over the next decade.
To begin with Dyson suggested that it is critical for the UK economy to rebalance itself away from financial services and property, two sectors which did not generate as much added value as many had suggested.
Who can forget that it was a combination of the two sectors in the guise of sub-prime mortgages that led to the massive financial crisis that brought the global economy to the edge of bankruptcy?
With policymakers now looking for an export-led growth over the next few years, it is clear that manufacturing – which already accounts for half of the UK’s exports – can be doing far more, especially in hi-tech sectors.
Secondly, with manufacturing focused outside the south east of England, any growth in the sector will have a disproportionate effect on the less prosperous parts of the UK, including Wales.
While Boris Johnson may not agree with the downgrading of the financial services sector in the eyes of government policymakers, there is surely an opportunity here to move away from the over-reliance on financial services, which led to a concentration of economic activity in London, and towards a more balanced regional economy.
Finally, and most importantly, creating and supporting the right type of innovative manufacturing business can make us less susceptible to recession in the future.
As Dyson notes in his report: “Whatever it is that creates generic differences between innovators and non-innovators, the consequence is that the former are likely to be quicker, more flexible, more adaptable, and more capable in dealing with market pressures than the latter are.”
Of course, James Dyson isn’t the only one to highlight the importance of manufacturing.
Only last week, the First Minister was speaking about the importance of the sector to the Welsh economy and how the draft manufacturing strategy for Wales will drive the sector forwards.
One can only hope that he is more serious about developing the sector than his Labour colleagues in the last UK government, who presided over a decline in manufacturing from 28 per cent of the Welsh economy in 1997 to 18 per cent of the nation’s economic output.
Despite this reduction in the overall role of manufacturing, it retains a larger role in the Welsh economy than in many other regions. From global giants such as Airbus and Corus to thousands of small companies producing specialist goods across the country, there remains real potential within the manufacturing sector in Wales.
For example, the winner of the 2009 Fast Growth 50 project was the manufacturing company Unit Engineers and Constructors which, since starting in 2004, has grown to a turnover of more than £17m in 2008 and a workforce of 167 people.
Having recently visited its plant in Swansea, it was a delight to see heavy engineering and manufacturing back with a vengeance in Wales.
Given the company’s aim of growing to a £30m turnover within a five-year timetable, it shows that even traditional parts of the Welsh manufacturing industry have a real future if they produce a quality product delivered on time and within budget.
With the 2010 Fast Growth 50 project being launched next week, will another manufacturer succeed Unit Engineers and Constructors as the fastest growing company in Wales?
And could this revival herald a new golden age for manufacturing again?
If companies have the right management, the right products and the right skills in place, and the exchange rate remains competitive to drive export activity, then why not?
More importantly, Wales, with the right support from governments in Westminster and Cardiff Bay, could be leading such developments given that we have some great manufacturing companies, both large and small, that could help drive forward both the Welsh and the UK economy over the next decade.
