Are you suddenly taking an interest in manufacturing? Malcolm Evans distinguishes between the makers and the fakers .
There’s a lot of talk about manufacturing at the moment.
At the rarified end, as politicians and economists scramble to claims-make at the first signs of recovery, every spike of output and every blip of balance of payments is analysed to the nth degree.
Even more than usual, metropolitan politicians clamour to be led around, white coated and hairnetted, northern advanced manufacturers….. Oh the photo opportunities and not a single pit pony in sight!
At a local level, as funded but feckless Local Enterprise Partnerships (partnerships of who, to do what?) look for relevance, and as the resurgent tide of quango “business advisers” look to justify their existence, today’s cleaner factories are suddenly the new black.
So here are some notes for them all – media, politicians, academics/state agencies, local worthies and enterprise chancers – given the historical ambivalence and continuing sketchy understanding of manufacturing.
The British Left has never really liked manufacturing. In a Marxist sense, factories were the visible imprisonment of the masses. But just as the modern Labour Party neither understands nor represents the working class, most members of all of the UK’s professionalised political classes instinctively valorise the “knowledge economy” above making hard goods.
At best most politicos still go little further than acknowledging manufacturing.
But it is also easy to go too far the other way, all starry-eyed about manufacturing being the be-all and end-all of economic health. Ultimately, economies tick at the point of consumption.
The primary making of things and selling them overseas at a profit is a pump primer of the full capitalist cycle. But the balance is now all wrong – industrial activity is down from 35% of 1948 output to just 10% today.
So, for each of the groups grabbing onto manufacturing for its own ends, there follows some straight talking advice from the factory floor.
Media: do not be seduced into believing that the self-promoting “Digital Economy” is the UK’s main growth engine. Digital is a pathway of communication and information exchange, not a leading primary producer in its own right. Neither are Dragons’ Den’s gimmicks and novelty whizz-bangery the real economy.
Producing goods (and services) is the real economy. Rediscover and treat manufacturing with the interest and respect it deserves; it is neither quaint to be patronised, nor miraculous in its very existence.
Politicians: stop the superficial grandstanding and fundamental lack of passion. Listen to what manufacturing actually needs. This includes clear new channels to long-term financing; we estimate (and we research this area relentlessly as part of our ongoing Building Britain’s Balance Sheet campaign) that UK SME manufacturing is broadly 35% light on investment. The solution to this does not lie with the much-vaunted “Business Bank”, which is just another quango-shuffling exercise.
Another major potential improvement (we’ll just stick at two areas in this letter, though there are other things which could be usefully tackled) is exports. Manufacturing is woefully under-exported against its potential.
There is a new mix required for superior exporting. It comprises funding, insurance, knowledge, cultural & logistical support, and incentives….I’ll spell it out in detail to those who genuinely wish to help implement it.
Get these things right for a start and accept that they are more important than posing in a hairnet at a factory in Huddersfield or Ulverston.
Academics/Agencies: there needs to be a new honesty about the reality that “commercialisation” agenda are weak, borderline disingenuous. Core university funding relies on attracting and retaining research funding.
Compounded by a national weakness of industrial enterprise culture and a poverty of industrial enterprise funding, academics are in any case not natural dynamos of commercialisation. So much potential churns round and round, always just a step or two back from committed commercial exploitation.
The commercialisation issues stretch further into state agencies charged with fostering industrial innovation, with much activity log-jammed in the never-never world of academia, or acting as a heavily discounted R&D resource for our largest companies.
There is far too great a disconnect of state agency support from the key engines of industrial innovation – smaller SMEs – and, further back, altogether too flimsy and shallow a ramp for bridging academic innovation out into the commercial world.
Local worthies and enterprise chancers: there’s a call to manufacturing action from every town hall roof and all the new quangos (snaffling Regional Growth Fund cash conceived as direct investment). There is a distinct danger, on the one hand, of a mass rebirth of shed-building (the cargo cultism of “build factories and they will come”) and, on the other, of hiding such expert advice as is available under a landslide of “coaching”.
So, thanks to all of those suddenly taking such an interest in manufacturing…..but if you’re faking it, instead of making it happen, you’re probably best just staying away.
Malcolm Evans runs Funding Enterprise and the Manufacturing Accelerator, an investment fund in growing manufacturing businesses. He published a series of articles on manufacturing and real economy investment here.