UK MANUFACTURING SECTOR

UK Manufacturing Sector

UK Manufacturing Sector

Historical decline of manufacturing in Britain

That manufacturing has fallen as a share of national income, but not in total, has been true for more than a century now. Given that Britain had the first industrial revolution, and ended up with manufacturing representing an exceptionally high proportion of the economy, a fall was to be expected, and probably even welcomed. Even as late as 2000 Britain still had a more manufacturing-oriented economy than France or the United States. So manufacturing's relative decline from 1900 to 2000 is easy to explain. But it has kept falling. In 2008 - the latest year for which data are available - manufacturing made up 18% of GDP in France and the United States, but only 15% of GDP in Britain. That is not a trivial difference(Elliot 2006). And it is still falling in the UK, while remaining - roughly - stable in France and the US. The reality is that the Government failed to understand the root causes of regional divergence. The causes of economic success are location and human capital. Here Britain has a problem that France does not have. We are at the edge of Europe (geographically, as well as emotionally, politically and so on). Most of France is near somewhere economically important. The north east is near Belgium and the Netherlands, and particularly Europe's major port in Rotterdam. The eastern areas are also near Germany and, further south, near Switzerland and Italy. The South, which is a desirable tourist area in itself, is near Italy and Spain. The western area is less well connected, but is historically less populous(Milwaukee 2009 pp.256-267).

In economic geography terms, the South East clearly trumps the rest of the country. If you are a national business, then being in the South East makes you closer to the bulk of your consumers - the south east has the largest number of people, and particularly the largest number of people with high incomes. If you are an international business then the south east is nearer to Europe, and, since our principal airports are in the south east, nearer to the US, the far east, and so on. We do have regional airports, but the number of flights designed for business passengers are relatively small. It is possible, for example, to fly non-stop from Birmingham, Manchester and Glasgow to New York, but there are respectively only 1, 4 and 1 flights per day. The Birmingham flight is a narrow bodied 757 with just 16 business class seats(Howard 2008 pp.267). In contrast there are 30 non-stop flights each day from London to New York offering business people a huge choice of airlines and departure times. Why would an American firm, or an Asian firm, decide to locate anywhere except within Heathrow's orbit?

One answer might be that other areas offer particularly high levels of skills. Sometimes this is true. For reasons that are historically obscure, St Asaph, in North Wales is the centre of Britain's thriving ...