Could the UK (and Europe) be a manufacturing force again?

11am  - Addendum - it looks like this post was perfectly timed but was purely accidental - we didn't realise the CIPS MARKIT index data was out this morning,  showing pretty bad news for UK manufacturing....

If you don't read the Onion, and if you do have a slightly warped sense of humour, then you are in for a treat and you will thanks me for this introduction. It is the reliably funniest web-site in the world. I won't try and describe it in detail, but it works through a mock-newspaper reporting format - it started out as a University magazine - and now also has a video element which is just as funny.

Anyway, here's an excellent 'article' from last week -

"Economists gently suggest American manufacturing maybe starts again with something simple like a ball"

But is there a serious point here? Do the US - and the UK - have it in them to be serious manufacturing nations again? And is it worth even trying, or do we pin our hopes on professional services, tourism, education and other advanced services? (Of course one problem with that is India and China are rapidly getting better at professional services, education etc. themselves...)

It's becoming clear that the era of "cheap c**p" from China is over, as Spend Matters US put it. With the range of supply chain risk issues we've seen recently, from Tsunamis to volcanoes, to child labour scandals, the time should be right for 'near-shoring' or even 'home-shoring' some goods that we've previously imported.

But, have we got the appetite to develop more manufacturing? Do we have the engineering, production and management skills? We can do it in the UK - look at Rolls-Royce, local Nissan and Toyota production, and the booming Jaguar Land Rover business. But these look like isolated pockets of excellence, large firms growing an existing base. You don't hear much about new manufacturing ventures springing up in the UK.

We could identify a number of reasons for this. Perhaps it is the British class system and culture that means successful industrialists sell out quite early and retire to play the lord of the manor rather than looking to keep medium-sized business in the family for generation after generation (like the German Mittelstand). Perhaps we need education that focuses more on technical and technological skills.  A change in our culture to recognise that a job in the City or the professions isn't intrinsically superior to being a production manager.

We could make it easier to employ people through a reduction in regulations and barriers.  We need a welfare system that encourages and rewards work, even if it means a relatively tough factory job (and at least that issue is seeing some much needed action from Ian Duncan-Smith). But there are signs that we're not seeing import substitution, despite all the factors that should be pushing us in that direction (BRIC inflation, currency, risk etc).

Of course we need to be strong in services as well, but I'd be very interested to know if procurement executives have an appetite to source more home-grown products from their supply chains.  Is the desire there but the supply isn't?  If that is the case, then is there anything the procurement profession can or should do to encourage a move back to a stronger manufacturing culture in the UK and indeed more widely in Europe?

There are more questions than answers....

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