Give backing, not rhetoric
An ongoing revival in manufacturing will need favourable conditions for competition and investment. Government, please note, says Tony Sarginson.
MANUFACTURING is back in the spotlight. The recession, with its dramatic failings of the financial services sector, has created a new appetite for businesses with tangible products and comprehensive business models.
Marked change is evident in attitudes – in the North East, in Westminster and in Brussels. There is an appreciation for a weakness in our unbalanced economy and manufacturing could be on the cusp of rising to our economic rescue.
Yet, despite the Government and Opposition parties’ rhetoric around rebalancing, no policy framework is in place to allow this to happen. Neither is it a foregone conclusion that manufacturing necessarily has to play a significant or greater or more central role in a better balanced economy.
So, why manufacturing?
It should come as no surprise that manufacturing remains a significant part of North East economic prosperity. It provides around 120,000 jobs, contributes nearly 20% of our GDP. It has driven productivity growth and accounts for two-thirds of our R&D spend. Other sectors will play their role. But manufacturing must be part of a genuinely diverse economy because it is well placed to address both the imbalances in our economy and the long-term economic trends we face.
The Government’s recently produced Manufacturing Strategy stated that the UK would only achieve long-term sustainable growth through a mixed and balanced economy in which the UK’s already strong and competitive manufacturing base plays an even greater role.
But manufacturing will need support. EEF, the manufacturers’ organisation, will produce a full report soon setting out what’s needed from government, industry and others to create conditions for manufacturers to grow and prosper.
Three key areas the report is likely to call for include:
A vibrant economy. A strong and stable domestic market and growth.
Favourable conditions for competition and investment, in terms of access to markets and investment decisions.
An actively supportive government. The UK needs a government that recognises the importance of a strong manufacturing base and proactively supports the sector.
Our current economic imbalances suggest we need to diversify our national economic portfolio.
While no one can accurately predict the future, there are a series of inevitable long-term trends bound to affect the future direction of the UK economy, including: environmental concerns, demographic change, strategic security questions and globalisation.
So a future UK economy that is internationally competitive will need to be increasingly diverse, open to global markets, focusing on high-value and engaged with growing and sustainable markets.
Tony Sarginson is External Affairs Specialist for the Engineering Employers' Federation
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