Last Word: What David did at Davos

Jane Gray's Last Word column for February focusses on the prime minister’s speech at the World Economic Forum.

“They say we can’t make anything anymore.

“Whether it’s the shift from manufacturing to services, or the transfer from manual jobs to machines, the end point is the same dystopian vision; the East wins while the West loses; and the workers lose while the machines win.

“I don’t believe it has to be this way.”

Jane Gray, Editor, The Manufacturer magazine

These words, spoken by the prime minister at the world Economic Forum in

Davos sent a shiver down my spine.

Gutsy, defiant and emphatic, they echo the message that disseminates day by day and which we hear regularly from passionate, savvy manufacturing business leaders.

In his address to global political and economic influencers at Davos, Cameron promised to prove the ability of the UK to respond to major trends in technology and business strategy by making it the “re-shore nation” – a demonstrator for the concept that any product, made in a flexible, high tech factory capable of rapid reaction to customer demand, might potentially be made in a ‘dull, old’ economy.

Cameron announced the establishment of ReshoreUK to help prove the point.

The organisation, run in partnership by UKTI and the Manufacturing Advisory Service, will help investors in new manufacturing capacity develop business cases for a UK location, highlighting favourable sites and potential suppliers.

Responding to evidence

Such a body has been a long time coming. Whispers that manufacturers who had offshored production to China were seeing the cost arguments diminishing and were struggling to support quality and agility have been growing for several years.

It took until last year however, for any really credible analysis of the scale and motivations for UK reshoring to be undertaken – I’m thinking mainly of the YouGov survey published in July last year (bit.ly/YouGovReshoring) and the MAS report published in November (bit.ly/MASReshoring).

Without this kind of research, collating instances of reshoring and their drivers, the concept is an optimistic piece of hearsay based on anecdote and government cannot be expected to pull behind such sentiment.

The fact that government has acted swiftly and positively to support reshoring now that firm evidence has emerged is very encouraging.

It shows that government is aware of developments in manufacturing strategy and that it is keen to use research in taking practical action to support manufacturing growth.

It is often said that the UK needs a long term industrial strategy to enhance its competitiveness in a sustainable way. This is true, but, with a long term ambition in mind, it also needs swift action that responds to market information in the short term.

To give the work of ReshoreUK credibility however, government must take similarly decisive moves to reduce the cost of energy in the UK.

This is the nation’s biggest detractor as a manufacturing location.

At Davos, Cameron firmly sided with shale gas exploration as a means to reducing European and UK energy prices. It’s good to hear he has a plan, but it needs equally well defined backups – fracking is still a highly controversial means of extracting gas and, whatever the opinion of business, without public support this energy strategy could fall on its face.

A message to the world

Yes – flaws can easily be picked. But I for one was deeply impressed by Cameron’s speech at Davos – I’d recommend reading the full version which can be found here: bit.ly/CameronDavos.

Most importantly, it expressed, on a high profile, global stage, that UK government has an understanding of the political, economic and social importance of a healthy manufacturing base and that it understands what that base should look like in a developed nation – something which cannot be said of every manufacturing business owner.