Manufacturing is important to the economy because…
…well let’s start with some numbers.
Manufacturing makes up a not insignificant 10% of the economy’s output, and employs 2.6 million people across the UK, with many more in other industries supply chains. The sector is also responsible for a huge 44% of all UK exports.
For these reasons manufacturing is arguably the beating heart of the UK economy. While it is true these numbers have declined since the sector’s heyday in the 1970s (see Francesco’s blog for more deets), and that the financial services sector has taken off over the last 30 years, the UK remains a key global manufacturing player – ranking in the top 10 in the world in terms of output *high fives all round*.
An evolving sector
The sector has also gone under some significant changes, with the composition of what we make evolving with the times. The UK for instance may no longer be a big producer of textiles given the rise of cheap labour from the Far East, but it is still a big player in many high-end, high value sectors. Rolls-Royce and BAE Systems, for example, are key actors in the thriving aerospace industry. While two of the world's largest pharmaceuticals groups (GlaxoSmithKline and AstraZeneca) are both British.
The UK also has a renowned automotive industry - and not just in niches like Formula One, where it is a world leader. True, the demise of MG Rover in 2005 brought an end to mass car production by British companies. But thanks to companies such as Nissan (whose Sunderland plant is up there the most productive in the EU), the UK automotive sector has enjoyed an impressive renaissance over the last 10 years.
The point being that the UK remains a big player in high value manufacturing and is indicative of its importance to the UK economy, and its standing on the global stage.
Why manufacture in the UK?
Along with its impressive evolution, the manufacturing sector also has strong fundamentals. We have some world leading universities, high class infrastructure, important trade links (for the time being…) and good support systems.
This is helping to contribute to a dynamic, modern day industry. The beliefs held by many that manufacturing is synonymous with dirty, low skilled, low paid jobs couldn’t be further from the truth. Manufacturing is one of the most productive sectors in the UK economy, outstripping productivity growth of the much flaunted services sector, as well as the economy as a whole. Furthermore the sector attracts a colossal 70% of business R&D, and 13% of all business investment.
In fact if you were to walk into a manufacturing factory today you’d be greeted with a plethora of 4IR technologies, automated systems, and the Internet of Things. As a result, manufacturing jobs are high skilled, high paid professions, with average earnings in the manufacturing sector far outperforming that of the rest of the economy. As a result people still want to come and manufacture in the UK, and it is an excellent career path as Verity blogged.
The bottom line
Manufacturing’s standing in the UK economy remains significant and should not be overlooked. In fact while it may only make up 10% of the economy, the question we should ask ourselves is how much poorer we would be without it? Significantly is the answer.