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 …
Effect of out-sourcing
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.
News? not to us
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
Is that chart inflation-adjusted?
If not, it is telling a very different story!
Need a thumb-sideways icon.
I resemble that remark . . .
. . and I make whippet flanges.
Luckily they can't yet outsource the fitting of said flanges to the lucky whippets, ensuring men in vans will be around for a long time. They also form part of the manufacturing economy.
Brighouse, West Yorkshire (oop North).
Re: I resemble that remark . . .
That's my 'home town', that is. I don't think it's made much money since the 70s, although it's turning into a commuter base for people who work in Leeds.
That's also where I live (although not for long, moving this month).
Who'd'a thunk it? It's a small world...
And personally I use it as a commuter base to Oldham. Half an hour away, but still on the Right Side Of The Pennines(tm).
You've done it now
From now on, I'll be reading your posts with a yorkshire accent in my head.
It's going to be pretty entertaining, and you won't seem as scary anymore.
And there I was thinking....
....that Brighouse and Rastrick were responsible for the creation of a lot of brass, even if it is the oom pah pah variety.....
OK, I'll get my coat, it's the one with the E-flat bass in the rather large pocket in it!
and i'm from mirfield
but now live down south too. and it's not snowing.
I used to work in brighouse too, and i'm from the other side of the pennines! That place must have some kind of weird emploment gravitation well sucking everyone in.....
Oh goody! a graph
.. 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.
I must agree
Unless this is adjusted for inflation, it is meaningless.
A Great Time to have Something Special and Different
"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#
A very naive view
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.
dont bash thatcher
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??)
successive government failure
"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).
Have you been reading the Daily Fail again, Grandpa?
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.
There are other ways, and this is just one. ....... Is it already in practice with someone?
"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.
Not very neighbourly...
Aren't we all supposed to be citizens of the world? It'd be nice to not make arms for a change wouldn't it?
(Unless we become spacefaring and have to nuke all the nasty green men before they get the probes out. Then it's fine.)
Great article but...
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...
that I would prefer them to produce gromits and earn money, than sit on their arseholes getting paid a premium to watch trisha?
which would you prefer in all seriousness?
we ALREADY pay a premium, might as well get something from it.
More people with a pie of the pie...
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.
Which would I prefer?
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.
Yay! Rule Britannia!
We actually invented the dark satanic mill/slave labour sweatshop! Tally ho!
"We've moved up the value chain"
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?
and it's been going on for longer than you think
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.
Nothing to do with Maggie?
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.
No, nothing to do with Maggie
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?
Preaching to the converted
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.
smells funny to me
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.
Foreign Owned Manufacturing
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?
Bill - because he's loving it!
What does the chart for other countries look like? And what else is in our economy?
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.
should have tested this argument before...
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
not only that...
"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.
Worth vs Number of Employees
As usual, whoever paid for the report can put whatever spin on it they like. The problem is not value of the output, but the number of people it takes to produce it.
A little dishonest.perhaps?
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.
Down't pit, wi' whippet
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.
That'll teach me to skimp on my research, you're UKIP aren't you!? And their press officer too no less. Congratulations - I hope you win the next election!
Warning sign - because we should all be worried
You said coding is manufacturing
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.
And what about other countries
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.
@"Boris The Cockroach"
"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?
Also of note
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.
I shall now sit back and watch the missiles fly......